U.S. import prices rose 7.0% year-over-year in August, marking the largest annual gain since 2022. Manufacturing imports increased by 5.9% annually. Upstream factors like diesel, warehousing, cold storage, and corn prices suggest a food inflation rate of 2.7% to 2.9% by year-end.
Private equity firms are acquiring brands major food companies can no longer operate efficiently at scale. Notable acquisitions include Chef Boyardee, Pop Secret, and Noosa. Meanwhile, Schreiber Foods is investing $267 million in a new process-cheese facility in Missouri.
Import Inflation Pressures Food Manufacturers
U.S. import prices surged 7.0% year-over-year in August, the sharpest rise since August 2022. Manufacturing imports grew by 5.9% annually, while nonfuel imports saw their highest increase since May 2022. Petroleum and coal products jumped 42.2% year-over-year.
Cost pressures are widespread across materials, capital goods, and supplies. Companies importing these items now face annual price hikes of 5% to 7%. The downstream CPI data masks the challenges manufacturers confront upstream.
While food-at-home CPI slowed to 2.2% year-over-year in August, rising PPI for fuel, power, storage, and transport signals mounting costs. Tariffs on Canadian imports and lower corn yields, affecting over 75% of supermarket items, will drive retail prices higher in the next 6 to 12 months.
The USDA predicts 2.5% food inflation by 2026, but PPI trends point to a higher range of 2.7% to 2.9%. This gap shows the disparity between consumer prices and manufacturer costs.
Private Equity Revitalizes Divested Food Brands
Major food companies like Conagra, Campbell’s, and Hormel have sold brand assets in the past two years, with private equity firms taking over. Conagra sold Chef Boyardee to Brynwood Partners for $600 million. Campbell’s divested Pop Secret, Noosa yogurt, and Emerald Nuts, while Hormel sold a 51% stake in Justin’s nut butter.
Private equity firms are known for quick decision-making, often finalizing deals within six weeks compared to the six months typical for large CPG companies. For instance, Brynwood Partners increased Funfetti sales by over 50% after acquisition.
Despite divestitures, investment continues in core commodity categories. Schreiber Foods is investing $267 million in a new process-cheese facility in Carthage, Missouri, expected to create approximately 100 jobs by 2028. The company already employs over 1,300 people in Carthage, reflecting confidence in demand.
Conversely, Maple Leaf Foods is closing plants in Seattle and Turners Falls, Massachusetts, consolidating production in Indianapolis over the next 12 to 18 months. They cited underutilized manufacturing capacity as the reason.
Ultra-Processed Foods Face Regulatory and Market Shifts
Five major CPG companies—Campbell’s, PepsiCo, Conagra, Kraft Heinz, and JM Smucker—now disclose ultra-processed food risks in SEC filings. Campbell’s warns of potential new definitions, labeling requirements, marketing restrictions, or reformulation mandates due to regulatory scrutiny.
PepsiCo notes that negative consumer perceptions of ultra-processed foods could impact performance. Conagra, Kraft Heinz, and JM Smucker also disclose ongoing litigation claiming their products cause health damage. Texas will mandate warning labels on artificial colors starting January 1, 2027.
In contrast, the Non-UPF Verified certification program, launched in January 2026, now includes 304 products from 23 brands, such as Amy’s Kitchen and Simple Mills. Another 41 brands are pursuing certification. California’s AB 2244 proposes a state-administered non-ultraprocessed certification, potentially shifting it from a third-party seal to a regulated standard.
