Prices of Coffee, Wine, Toilet Paper and More Set to Rise in Post COVID-19 Era

Several common household goods, from diapers and toilet paper to breakfast cereals, are expected to see a rise in prices as more parts of the country resume business operations amid the ongoing COVID-19 pandemic.

According to an April 13 report from the U.S. Bureau of Labor Statistics, the "Consumer Price Index for All Urban Consumers (CPI-U) increased 0.6 percent in March on a seasonally adjusted basis after rising 0.4 percent in February."

The CPI measures the average change over time in prices paid by urban consumers for various consumer goods and services, the bureau explains.

"The March 1-month increase was the largest rise since a 0.6-percent increase in August 2012. Over the last 12 months, the all items index increased 2.6 percent before seasonal adjustment," according to the April report.

Here we look at some everyday consumer goods that are expected to become more expensive in coming months.

Diapers, toilet paper, feminine care products

Procter & Gamble, the Ohio-based company behind several consumer goods, said it has started raising prices for its "baby care, feminine care and adult incontinence product categories" in the U.S. to help offset "rising commodity costs."

Some of P&G's household product brands include Always sanitary pads, Pampers diapers and Charmin toilet paper.

The company said "the exact amount of the price increase will vary by brand and sub-brand in the range of mid-to-high single digit percentages and will go into effect in mid-September," in a statement in late April.

Kimberly-Clark, the American corporation producing different personal care goods, also announced it will be raising prices "across a majority of its North America consumer products business," the company said in a statement at the end of March.

Some of its brands include Huggies diapers and baby wipes, Pull-Ups potty training pants and toilet papers from Scott and Cottonelle.

Kimberly-Clark said: "The increases will be implemented almost entirely through changes in list prices and are necessary to help offset significant commodity cost inflation.

"The percentage increases are in the mid-to-high single digits. Nearly all of the increases will be effective in late June and impact the company's baby and child care, adult care and Scott bathroom tissue businesses," the company added.

Cereal, other common food pantry items

On an earnings call back in March, General Mills, the American company behind over 100 food brands including several breakfast cereals such as Cheerios, Chex and Wheaties, said it is also planning to increase prices due to inflation costs.

With more people working from home as well as cooking and baking at home, the company projects these "changes in consumer behaviors driven by the COVID-19 pandemic will result in ongoing elevated consumer demand for food at home, relative to pre-pandemic levels," according to a statement in late March.

General Mills stated it "plans to capitalize on these opportunities, addressing evolving consumer needs through its leading brands, innovation, and advantaged capabilities to generate profitable growth."

Some of General Mills' other popular food brands include Nature Valley granola bars, Yoplait yogurt, Betty Crocker baking products and Pillsbury dough as well as Häagen-Dazs ice cream.

General Mills CEO Jeffrey L. Harmening said on the March earnings call: "As we look at the third quarter of this year, demand was high all over the world, including the US, fueled by clearly the pandemic as well as stimulus spending and, in addition to that, some weather-related events.

"As we look at Q4, we really believe that our sales, both in terms of pounds and pricing, is going to be higher than it was pre pandemic...and we're confident the consumer behaviors aren't changing as quickly as some would think," he explained.

"We're seeing inflation, and it's broad-based across commodities, across logistics, across things like aluminum and steel, and so whenever you see this kind of broad-based inflation and it's global, that's an environment where you're going to realize net pricing," Harmening added.

Coca-Cola, other soft drinks

Coca-Cola, the American beverage company, said its prices are also expected to rise. Some of the company's popular brands include carbonated drinks such as Coca-Cola, Sprite and Fanta, as well as juice products such as Minute Maid, Simply and Innocent.

In late April, Coca-Cola CEO James Quincey said on CNBC's Squawk on the Street: "We are well-hedged in '21, but there's pressure built up for '22, and so there will have to be some price increases.

"We intend to manage those intelligently, thinking through the way we use package sizes and really optimize the price points for consumers," he added.

Quincey did not specify which of the company's products would be seeing a price hike.

Wine

The pandemic led to a rise in online wine sales following restaurant and bar closures. This increased demand is expected to remain in a post-pandemic world, according to the "State of the U.S. Wine Industry 2021" report by the wine division of Silicon Valley Bank, which would see wine prices rise.

The report noted: "Once there is clear success with defeating the virus, consumers will act on pent-up demand to celebrate in groups, which will likely boost alcohol consumption in 2021.

"Families who were able to work from home saw some expense savings that position them for an expected push in spending in a post-COVID era.

While many consumers stocked up on wines from grocery chains, many also switched to online purchases either due to limited selections available at shops or because doorstep delivery was deemed safer. "Many consumers will continue online wine buying in a post-COVID world," the report said.

"Overall pricing should hold in both off- and on-premise sales, as well as in the direct-to-consumer channels, as demand for alcohol and special occasions goes through a spurt of temporary growth.

"Premiumization, a move to higher-priced wine, is nearing an apex but will continue in 2021 as deferred celebrations and reduced supply stall the expected change," the report added.

Coffee

Coffee consumption remains high across the U.S. and worldwide, which could also lead to increased pricing.

Coffee prices increased in March and global coffee consumption is projected to rise this year, according to the International Coffee Organization (ICO).

Americans were reported to be drinking "more coffee than ever," according to a March 2020 report by the National Coffee Association. The pandemic led to "record coffee consumption at home, with 85 percent of coffee drinkers having at least one cup at home," according to the NCA's Spring 2021 National Coffee Data Trends (NCDT) survey.

According to the ICO's Coffee Market Report in March, "the ICO composite indicator rose slightly, by 0.8 percent, in March averaging 120.36 US cents/lb compared to 119.35 US cents/lb in February, confirming an upward trend over the last five months."

The ICO composite indicator price is "an overall benchmark for the price of green coffee of all major origins and type," with "green coffee" referring to "coffee in the naked bean form before roasting," the ICO explains.

The rise in March was reported to be the highest monthly average since 2017/2018, the report noted.

The demand for coffee remained strong in the U.S., with more than 40 percent reported to have purchased types of coffee they'd never tried before during the pandemic and nearly a third having tried to replicate a favorite coffee shop beverage at home, according to the NCA.

"Now, with light at the end of the pandemic tunnel, many Americans are also now returning to their favorite coffee businesses or plan to do so within the next month," NCA President and CEO William Murray said on April 1.

Cheerios at Brooklyn supermarket in March 2006
Boxes of Yogurt Burst Cheerios cereal from General Mills seen at a Key Food Supermarket in New York City back in March 2006. Ramin Talaie/Corbis via Getty Images