The Mexican bakery Grupo Bimbo revealed that it is in talks with the Government of Andrés Manuel López Obrador for a new price increase in its line of white bread, said Daniel Sertvijte, general director of Grupo Bimbo, in a conference with analysts.
“We are in preliminary talks, understanding what they want to do in this agreement in the coming days or weeks. They are concerned about 24 commodities. One of the products that are looking for how they can be impacted to a lesser extent is white bread (… ) We are participating together with other companies, which are also talking with the Government”, said Sertvijte.
In Mexico, the average consumption of bread per person is 33.5 kilograms, of which between 70% and 75% is white bread, according to the latest data from the National Chamber of the Bakery and Similar Industry of Mexico ( Canainpa).
In the media it emerged that President López Obrador will announce in the coming days the signing of an economic pact with private companies to avoid an escalation in the price increases of basic items, in an attempt to control inflation, which in March placed at 7.45%.
Since the beginning of this year, Grupo Bimbo has raised its prices twice to lessen the impact of the price boil. Until now, the price increase has worked for the company to report positive results during the first quarter of the year, a period in which it registered an 18% increase in sales.
Raw materials in the spotlight
In a conference with analysts, the company’s CEO acknowledged that inflation levels are higher than expected, and will maintain pressure on the company’s margins.
For now, and to lessen the impact, the company has raised raw material hedges from 70% last year to 85% in the first quarter of the year. This maneuver has been one of the main strategies to avoid an impact on the cost of production.
“Our main inputs are seeds, packaging, among others. Towards the end of the first quarter we have 85% of our needs for 2022, and we continue to make alliances according to our policies, which range from four to 18 months. This strategy has allowed us to have visibility of both operations in order to be able to plan,” said Diego Gaxiola, the company’s director of finance.
Regarding the sale of Ricolino to Grupo Mondelez, the directors declared that they will use the resources to pay the debt.
