From Coffee to Lunchables: How Working Remotely Is Impacting Inflation

Mandatory Credit: Photo by Sonny Meddle/Shutterstock (693201ag)Dairylea Lunchables SnackVarious Stock - Sep 2007.
Sonny Meddle/Shutterstock / Sonny Meddle/Shutterstock

As if the world needed one more thing contributing to inflation, there’s this: The rise in remote working during the COVID-19 pandemic might have pushed prices higher on everything from coffee and tea to pet food and Lunchables.

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These are among the household items that have seen higher demand — and, in some cases, higher prices — as more Americans work from home. Similar price hikes have been reported on other household staples such as eggs, meat, soft drinks and energy drinks, Bloomberg reported.

In the case of coffee, the increased demand mainly comes from grocery store brands favored by remote workers who don’t want to pop out to Starbucks (and no longer have to choke down bulk-rate office coffee). The higher demand also coincides with supply issues that were already pushing prices higher.

Brazil, the world’s largest coffee producer, was hit this year by the double whammy of an extended drought followed by a devastating frost that has seriously damaged the country’s coffee trees. Arabica futures for December were up 3% in August after rising 18% in July, CNN reported.

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This hasn’t been a big problem for companies like Starbucks, which buys coffee ahead of time and uses hedging strategies to lock in prices. But J.M. Smucker, owner of the Folgers and Dunkin’ coffee brands, has felt the pinch.

“As we came into the fiscal year, we were anticipating mid-single-digit cost inflation as a percent of our total cost of goods sold,” J.M. Smucker’s Chief Financial Officer Tucker Marshall told analysts last month. “Now we’re seeing high single-digit cost inflation.”

You can find Smucker’s coffee brands in grocery stores where remote workers shop, which means there is even more demand for their products.

Meanwhile, there has also been a rush on pet food, driven in part by a rise in the number of “pandemic pets” that have been adopted or acquired to help keep remote workers company. Purina maker Nestle SA has had to ramp up capacity to meet demand.

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At least pet owners can still find products on most grocery shelves. The same can’t be said for pre-packed Lunchables, made by Kraft-Heinz. Those have been in short supply amid a steep rise in demand for the brand, Today reported last week.

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Supply-chain issues might have something to do with the Lunchables shortage. But as Today noted, some believe the meal kits are flying off the shelves because parents, after a year-and-a-half working from home, have simply grown tired of preparing and packing homemade lunches and arguing with their kids about the importance of proper nutrition.

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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.
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