Cyber Week Sale! 50% Off All Access

Kraft Heinz CEO Reveals Dire Supply Chain Situation — and What It Means for Your Mac & Cheese and Ketchup New problems arise every day, and there's no end in sight.

By Amanda Breen Edited by Jessica Thomas

Bloomberg | Getty Images

Inflation and supply chain issues have been with us for a while now — and they don't appear to be going anywhere soon.

Kraft Heinz CEO Miguel Patricio told CNN Business that the problems facing the food industry now will likely continue into next year. To avoid passing all of the cost onto consumers wanting to buy Kraft Heinz ketchup and macaroni and cheese as usual, the company has had to stay several steps ahead.

Related: 4 Ways to Protect Your Business From Inflation

Food prices have risen 11.4% over the past year, the largest 12-month jump since 1979.

Complicating the issue are years-long supply chain challenges resulting from pandemic pressure on a "just in time" system created by Toyota in the 1950s, per The Guardian — essentially, many companies had few raw materials in reserve.

And consumers are feeling the pain at the grocery store: CNBC reported that it's caused many to change their shopping habits, opting for inexpensive items even if they're not as healthful.

For its second quarter, which ended June 25, Kraft Heinz increased its prices overall by 12.4 percentage points compared to the same period a year earlier.

"Every day we have a new problem. It's the new normal," Patricio told CNN Business. "At the beginning, we thought it was a crisis — now we know it's a new normal and we have to adapt to that."

Related: Being Different Is the New Normal: Why 'Disruption' Is Here to Stay.

To prevent the consumer from picking up all of the extra cost, Kraft Heinz has implemented "obsessive" tracking of potential supply chain hurdles and embraced different packaging and pricing strategies, including bulk value packs for its macaroni and cheese and more bottle sizes for its ketchup.

Amanda Breen

Entrepreneur Staff

Senior Features Writer

Amanda Breen is a senior features writer at Entrepreneur.com. She is a graduate of Barnard College and received an MFA in writing at Columbia University, where she was a news fellow for the School of the Arts.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Side Hustle

'I Just Hustled': She Earned More Than $300,000 Wrapping Gifts Last Year — and It All Started With a Side Hustle

When Michelle Hensley lost her husband to cancer, she needed to figure out how to earn an income for her family.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Business Solutions

Build Professional Websites Without Coding or Paying More Than Once

Create stunning WordPress sites easily with MaxiBlocks — a cost-effective alternative to expensive website builders like Wix and Squarespace.

Growing a Business

This Breakthrough Technology is Poised to Accelerate Your Company's Growth

Discover a breakthrough technology stacked on top of generative AI, now poised to revolutionize businesses across nearly every sector. Unlock unprecedented growth and profitability potential, achieving levels once thought unattainable.

Business News

Google CEO Sundar Pichai Says 'You'll Be Surprised' By How Google Search Changes Next Year

AI has already changed the look of search, but Google's CEO says there are more changes to come.