In 2021 and 2022, food prices at both grocery stores and restaurants rose as the costs of labor, transportation and raw materials all registered gains. Other factors, including increased expenditures for marketing and packaging food products, also forced consumer prices upwards. Meanwhile, weather-related events—like extreme drought in the Western U.S.—diminished crop yields, adding to supply costs. Indeed, according to the U.S. Bureau of Labor Statistics, from December 2021 to December 2022, the Consumer Price Index (“CPI”) for food reflected a 10.4% increase.
Moving into 2023, gains in the CPI for food began to slow slightly. For the 12 months ending March 2023, the food index increased by just 8.5%. Further, for the 12 months ending April 2023 (latest available), the CPI for food climbed 7.7% year-over-year.
Despite some relief in food price growth, in April 2023, the costs associated with food and beverages remained higher than before the COVID-19 pandemic began, for consumers as well as food and beverage manufacturers, food distributors and others in the food and beverage supply chain. Nevertheless, it seems that the brunt of the increases has been borne by consumers; not only have food and beverage manufacturers implemented numerous retail price increases over the past few years, but, in large part, U.S. consumers have refrained from trading down to less expensive alternatives, instead choosing to pay more for their favorite brands.
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