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us hunger
Big Food Raking in Huge Profits From Price Hikes as US Hunger Persists: Analysis
"It's shameful that Americans are left food insecure and have to skip meals while corporations and their wealthy shareholders enjoy the spoils of supersized profits under unjustified price hikes."
May 10, 2023
As the U.S. government on Wednesday released its latest inflation report, the watchdog Accountable.US put out a new analysis detailing how Americans face food insecurity while major food corporations are padding their profits with price hikes.
"Big Food's staggering increase in earnings shows they did not need to raise prices so high on consumers but did so anyway to maximize record profits," said Liz Zelnick, director of Economic Security and Corporate Power at Accountable.US, in a statement.
"It's shameful that Americans are left food insecure and have to skip meals while corporations and their wealthy shareholders enjoy the spoils of supersized profits under unjustified price hikes," she added. "It's clear that the food industry will not hold itself accountable. It's time Congress do more to rein in corporate greed, one of the main factors currently driving up costs for families."
"It's time Congress do more to rein in corporate greed, one of the main factors currently driving up costs for families."
The Accountable.US report takes aim at General Mills, Kraft Heinz, and Mondelez—three of the top "at home" food companies in the United States based on market capitalization—focusing on January through March, the first quarter of this calendar year.
General Mills is one of a few companies that dominate the U.S. breakfast cereal market, with brands including Cocoa Puffs, Cookie Crisp, and Lucky Charms. Kraft Heinz is known for not only ketchup and macaroni and cheese but also Jell-O, Kool-Aid, and Philadelphia Cream Cheese. Mondelez's top brands include Chips Ahoy! and belVita.
The companies' combined net earnings for the quarter rose by 51% year-over-year (YoY) to a combined $3.47 billion, and the trio collectively spent over $1.3 billion on shareholder dividends, Accountable.US found. Of the three, only General Mills saw its earnings drop from the first three months of 2022 to the same period in 2023—though the company still spent more on dividends this year compared with last year.
The first three months of this calendar year were the third quarter of General Mills' 2023 fiscal year. Accountable.US cited Reuters' March 23 report that the company "raised its fiscal 2023 forecasts for a fourth time after beating estimates for quarterly results, helped by price increases and steady demand for its packaged-food products."
The watchdog also highlighted that General Mills "saw its net earnings increase by nearly $2 billion YoY for the first nine months of FY 2023, as the company spent over $2.16 billion on its shareholders through a combination of dividends and stock buybacks."
For Kraft Heinz, the watchdog referenced Reutersreporting earlier this month that it "raised its full-year profit forecast on Wednesday on the back of higher prices and sustained demand for its packaged food items." The analysis adds that the company "saw its Q1 2023 net income increase by 7.1% YoY to $837 million and spent $491 million on shareholder dividends."
Accountable.US noted that during the first quarter of this year, "Mondelez—which touted price hikes for its double-digit increases in revenue and earnings—returned $928 million to shareholders through a combination of dividends and stock buybacks, after reporting $2.1 billion in profits, a 143% increase from last year."
\u201cAs the #Fed mulls even more rate hikes, #Powell needs to finally recognize rate hikes will do NOTHING to address the MAIN driver of inflation: corporate greed. Rate hikes will only put more banks on the brink of collapse and risk massive unemployment. https://t.co/y2JIqScCUM\u201d— Ryan Summers (@Ryan Summers) 1683728189
The group used its new analysis to call out the Federal Reserve, saying that "the findings are the most recent evidence that while inflation is slowing, the Fed's single-minded policy of repeated interest rate hikes [is] doing little to contain the primary driver of rising costs—corporate greed."
The report also emphasizes recent admissions from economists that corporate greed is driving inflation—which progressive organizations and experts have been stressing for months in response to the Fed's interest rate hikes.
As the analysis points out, The Wall Street Journalreported earlier this month:
Consumers have... been unusually willing to accept higher prices lately. Paul Donovan, chief economist at UBS Global Wealth Management, said businesses are betting that consumers will go along because they know about supply bottlenecks and higher energy prices.
"They are confident that they can convince consumers that it isn't their fault, and it won't damage their brand," Mr. Donovan said.
According to the consumer price index report released Wednesday by the U.S. Bureau of Labor Statistics, "the food at home index fell 0.2%" from March to April. While cereals and bakery products saw a slight increase, there were decreases for milk; nonalcoholic beverages; fruits and vegetables; and meats, poultry, fish, and eggs.
However, the bureau's report also provides context from the past year: "The food at home index rose 7.1% over the last 12 months. The index for cereals and bakery products rose 12.4% over the 12 months ending in April. The remaining major grocery store food groups posted increases ranging from 2.0% (fruits and vegetables) to 10.4% (other food at home)."
The Accountable.US analysis notes that in January and February, "food-equity advocates warned that 'food insecurity for millions of American consumers is worsening' despite overall inflation easing, with higher numbers of food stamp recipients reporting 'skipping meals, eating less, and going to food banks to manage costs.'"
The U.S. Census Bureau has estimated throughout 2023 that based on household surveys, roughly 25 million people sometimes or often did not have enough to eat in the previous seven days. The U.S. Department of Agriculture reports that nearly 34 million people live in food-insecure households—though research published last month suggests that figure is likely an undercount.
Additionally, food insecurity figures don't provide a full picture of how many families struggle to stay fed, as Claire Babineaux-Fontenot, CEO of food bank network Feeding America, explained to CNN in March: "The nuance is that some people are not 'food insecure' because they get access to the charitable food system. That doesn't mean they're able to achieve self-sufficiency."
U.S. households are also contending with losing assistance related to the Covid-19 pandemic—including the end of the expanded child tax credit, universal free school meals, and increased Supplemental Nutrition Assistance Program (SNAP) benefits, formerly known as food stamps.
As Common Dreams reported in late February, while experts warned that the end to boosted SNAP benefits would cause a rise in U.S. poverty, Public Citizen president Robert Weissman declared that "a decent society would not let this happen."
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Applauding Biden Push to End US Hunger, Groups Demand 'Deeper' Structural Reforms
"To end hunger we need a serious effort to address poverty and its root causes," said one anti-hunger campaigner. "A framework that is focused on dismantling structural inequities and ensuring broad based prosperity for all is essential."
Sep 27, 2022
Anti-hunger groups in the U.S. on Tuesday applauded the White House's new strategy to ensure everyone in the U.S. has sufficient, healthy food by 2030--while warning that though there are more than enough resources in the wealthiest country in the world to eradicate hunger, ending the crisis by the end of the decade will require major systemic changes as well as increased assistance to low-income households.
"This strategy builds on existing programs to ensure the food and nutrition security of the millions of Americans who face challenges putting food on the table."
The Biden administration announced its National Strategy on Hunger, Nutrition, and Health as it prepares to hold the White House's first national conference on the issue in more than 50 years on Wednesday.
The strategy includes five pillars of eradicating hunger and food insecurity: Improving food access and affordability; integrating nutrition and health; empowering consumers to make healthy choices; supporting physical activity; and enhancing nutrition and food security research.
The plan would eliminate eligibility barriers for the Supplemental Nutrition Assistance Program (SNAP) which have historically kept formerly incarcerated people from using benefits, and would support expanded benefits for people in U.S. territories, college students, and young people who have aged out of foster care.
\u201cGood news from Biden admin\u2019s new national hunger strategy: \u201cSNAP\u2019s college student eligibility restrictions are out of date given the current population who seek higher education credentials, many of whom are older, have low income, and hold caregiving responsibilities.\u201d\u201d— Amy Ellen Duke-Benfield (@Amy Ellen Duke-Benfield) 1664294177
Food access would also be improved by ramping up funding for nutrition programs in the Older Americans Act, increasing outreach to eligible families and modernizing federal assistance programs so enrolled people can shop for food online, increasing public transportation to grocery stores, reorienting "the school meal programs from an ancillary service to an integral component of the school day," and expanding the Summer Electronic Benefits Program which in 2021 ensured more than 36 million children had school meals when school was not in session.
\u201cAs this national strategy is discussed during tomorrow\u2019s #WHConfHungerHealth and beyond, policymakers must remember that to #EndHunger, we need to listen to the people experiencing it.\u201d— Feeding America Action (@Feeding America Action) 1664291573
The strategy was unveiled weeks after the U.S. Department of Agriculture released a report showing that the expanded child tax credit, universal free lunches in many school districts, and other food assistance significantly cut down on food insecurity in the first year of the coronavirus pandemic.
In 2021, one in 10 American households struggled to access sufficient healthy food.
"This strategy builds on existing programs to ensure the food and nutrition security of the millions of Americans who face challenges putting food on the table," said Feeding America, the nation's largest hunger relief group. "By expanding access to these programs, centering equity, and focusing on ways to reduce disparities and poverty, we can help ensure everyone has access to the food and resources they say they need to thrive, regardless of their race, background, or ZIP code."
The grassroots social justice organization WhyHunger applauded the White House for setting "a high bar" for agencies throughout the federal government to enact reforms to end hunger in the U.S., but noted that food insecurity is the product of decades of destruction to the social safety net and the consolidation of corporate power.
"We know that 50 years of chronic hunger in America demonstrates that this crisis is caused by low wages, worker exploitation along the food chain, structural racism, and policies that bend to big food companies," said Noreen Springstead, executive director of WhyHunger. "Too many people go hungry because they are working and don't earn enough to afford food, let alone the nutritious food they need, especially with the strain of high inflation."
"To end hunger we need a serious effort to address poverty and its root causes," she added. "A framework that is focused on dismantling structural inequities and ensuring broad based prosperity for all is essential."
Warning that it is "hard to tell if the intention for transformational change matches the plan" unveiled by the Biden administration, Springstead said that "we at WhyHunger are joining those most impacted by the hunger crisis in pushing for even deeper, transformational change that goes beyond modifications and tweaks to our current systems."
The Environmental Working Group (EWG) offered praise for the portion of the strategy aimed at increasing access to vegetarian and plant-based foods at federal facilities including national parks, prisons, and museums.
"We applaud the Biden administration for making hunger and health an urgent priority," said Scott Faber, EWG's senior vice president for government affairs. "The Biden plan makes it a priority to improve access to healthy options, including plant-based and vegetarian options. Everyone has a role to play if we want to address diet-related disease, and the federal government should lead by example."
Rep. Jim McGovern (D-Mass.), who has pushed the White House to convene a national policy conference on hunger, called on his fellow members of Congress to work with Biden to enact the proposed improvements to food access and affordability.
\u201cBy making nutrition, food access, and healthy eating national priorities, the Biden-Harris @WhiteHouse is setting ambitious, achievable goals that will make a difference in the lives of millions of Americans. \n\nIt\u2019s now our job to turn these plans into action\u201d— Rep. Jim McGovern (@Rep. Jim McGovern) 1664287889
"The strategy announced today marks a historic moment in the fight to end hunger," said McGovern. "It's now our job to turn these plans into action."
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