What Egg-xactly Is Going on with Food Prices?

Nestlé did not get to be the largest publicly-held food company in the world by accident.

I would imagine we've all bought food and beverage products made by the Switzerland-based food and drink corporation through the years.

Such as Cheerios, DiGiorno pizza, Lean Cuisine meals, and Dreyer's and Haagen-Dazs ice cream. As well as Coffee-Mate creamers, Perrier sparkling water, and Toll House cookie dough. Plus Gerber baby food, KitKat bars, Purina Alpo dog food, and Purina Cat Chow. 

Folks who have been running this company since two brothers in Illinois established the Anglo-Swiss Condensed Milk Company in Switzerland in 1866 knew – and still know – what they're doing.

So, when Nestlé officials say the price of food staples will rise even more in 2023 than where they're at now, we need to listen. And take action. 

Major Food Companies Predict Price Increases

Nestlé products rose 8.2% in price in 2022, which is similar to the rise in other companies' products. But the conglomerate's officials say that increase was not enough to offset their higher costs for food and beverage production and distribution.

So, guess who pays the price for that – literally? That's right, us. Consumers who want to keep putting food on the table (not to mention in our pets' bowls) provided by Nestlé and other companies will have to stretch our household budgets even further in 2023.

Mark Schneider is the Nestlé chief executive officer. In a recent call with reporters he said, "We are still in a situation where we're repairing our gross margin and, like all the consumers around the world, we've been hit by inflation and now we're trying to repair the damage that has been done."

Schneider was not specific regarding which of the company's 2,000 brands would be affected by price increases. But with many other food and beverage companies warning of increases, including Procter & Gamble, it's obvious we're all going to be affected by this.

It Starts with Raw Materials

Why will prices continue to rise even more than they already have? For one thing, raw materials are still more expensive than before.

Including energy, dairy products, and grains. Other costs, such as labor and logistics including transportation, also remain high.

Even if inflation has already peaked and will be heading down soon, it will take longer for prices to reflect that.

Alan Jope is CEO of Unilever, a huge British consumer goods company. Among their many products are Dove dishwashing liquid, Hellmann's mayonnaise, and Ben & Jerry's ice cream. Jope said products including mayonnaise and ice cream will continue to rise this year. 

Bird Flu Spikes Egg Prices

Whenever food producers and food media talk about price increases, they often mention eggs and foods with egg ingredients. There's a very good reason for that.

Due to the outbreak of bird flu in the U.S. and elsewhere, egg prices are higher than they've ever been.

In December, the average consumer price for a dozen Grade A eggs was $4.25. Only one year previously, the cost was $1.79. The prices for other types of eggs also rose significantly. 

Egg prices rose faster than nearly every other food or service last year. While overall grocery prices rose 12% in 2022, egg prices soared 60%. That's according to the Consumer Price Index.

Eggs Serve as Ingredients & Additives

Many foods use eggs as an important ingredient. Including mayonnaise and baked goods such as cookies and cake.

According to CNBC, "Elevated egg prices are trickling into food items across the grocery store – namely those in which eggs are a main ingredient." 

Even when eggs are not a main ingredient, they are often an additive. Such as in egg noodles, some breads, custards, and puddings.

Plus breaded or battered meat and vegetables, some soup broths, salad dressings, tartar sauce, and marshmallows. 

A Definite Contributor to Inflation 

Those who study and report on food economics say it's difficult to quantify exactly how much egg prices contribute to overall food inflation because eggs are only a small part of some food items.

But because they are used as a percentage of so many different foods, it's obvious they are at least contributing to the problem.

David Anderson is a professor and food economist in the Department of Agricultural Economics at Texas A&M University.

"(Egg prices are) part of why prices are higher across all kinds of foods," he said, adding they are also increasing the price of dining out. The cost of restaurant meals rose 8% last year.

An Egg by Any Other Name…

Even when consumers try to avoid purchasing eggs and products with eggs as ingredients, they still pay more at grocery stores due to higher egg prices.

For example, food processors use liquid whole eggs, liquid yolks, liquid whites, and dried varieties. And that cost gets passed along to consumers.

According to the American Egg Board, "Egg ingredients supply more than 20 functional benefits to food formulators and can play a critical role to achieve proper form, function, appearance, taste, texture, and shelf life."

In addition, you might not see eggs listed as an ingredient when you look at food labels, but they may be present nonetheless. An egg white is sometimes listed as "albumen," while an egg yolk may be listed as "livetin."

In other words, it's difficult to get around paying more for food these days, and eggs represent a big part of the problem. The key is to secure tasty, nutritious food with a long shelf life now so that you're not negatively affected in the future when prices rise even more.