A drought that has ravaged U.S. crops and sent key commodity prices surging has yet to take a toll on Annie’spricing or its bottom line, its chief executive officer told CNBC in an interview Wednesday.
Talking to CNBC’s “Squawk Box,” CEO John Foraker said that his company has focused on buying products from areas in North America that have not been stricken byparched conditions. At least for the moment, that has helped Annie’s
avoid having to hike prices on consumers, or lessen product sizes, he said.
“We haven’t seen any material impact yet,” Foraker said, adding that higher commodity prices might start to bite in the coming fiscal year. However, he rejected the idea that Annie’s would have to skimp on its products in order to lessen the blow of higher crop prices.
“If we think we need to take some pricing to mitigate or offset [the drought’s impact] we certainly will,” Foraker said. “But one thing we’ll never do is dumb-down our products or cheapen the quality. We’re going to stay focused on really high quality products which we’ve always done.”
The mercury has soared across the U.S., with extreme heat conditions leading to the lowest corn crop yield in nearly two decades. With corn prices on the rise, analysts are mulling the impact on global food supply, and whether companies may pass those costs along to consumers in the form of higher prices.