Absence Of Discounts Confirms Tomato Soup Inflation

Campbell's Condensed Tomato Soup has long been our favorite way to visualize the effects of inflation over time in the U.S. economy. That's because the product is defined by its iconic packaging, a No. 1 size steel can that contains the same amount of condensed tomato soup as it did when the product was first introduced to the public in the late 1800s.

campbells chicken noodle soup can

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This relative stability in packaging however means Campbell Soup (CPB) cannot hide the price increases is passes along to its customers through shrinkflation, which many other food producers exploit by keeping the same prices on their goods, but diminishing the amount of goods within them. When inflation drives up the costs of what they have to pay to make and transport their goods to consumers, Campbell's must increase their prices to compensate.

That's what's happening now. Campbell Soup has confirmed it is increasing prices across its product lines:

Get ready to add a few dollars to your monthly canned soup budget, because thanks to rising supply chain costs, Campbell’s is planning to raise its prices. On Wednesday, Campbell’s announced its last-quarter earnings were weaker than the company had expected. Compared to the same time period last year, profits had fallen 5% to $160 million.

“Our results were impacted by a rising inflationary environment, short-term increases in supply chain costs, and some executional pressures,” said CEO Mark Clouse....

Clouse assured investors that the company is taking steps to recover from the slump, including a new pricing strategy, which will roll out over the current quarter (which ends in early August). Across the company portfolio Campbell’s net sales decreased 14% over the last quarter, so expect this pricing strategy to affect more than just canned soup—Swanson broth, Pop Secret popcorn, Cape Cod chips, Pace salsa, Snyder’s of Hanover pretzels, V8 juice, Prego tomato sauce, SpaghettiOs, and Pepperidge Farm are all owned by Campbell’s.

Whether or not you, personally, will be paying more for these products is yet to be seen. Though retailers will be paying more for Campbell’s products, it’s ultimately up to them whether or not to absorb the higher costs, or pass them onto consumers.

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