Bimbo increases its prices starting this Monday

As a response to the increase in the cost of inputs for its products, Bimbo will increase the price of its products this Monday, December 19. The company reported in its report to the third quarter of the year that the increases in the final price to its customers would continue in the first quarter of 2023, after three adjustments that it has made throughout this year.

The company listed on the Stock Exchange, will increase this Monday the last increase in its products to the final consumer, in accordance with the National Alliance of Small Merchants (Anpec).

Among the products that increased their prices, between one and four pesosThere is large white bread at 45 pesos from 42 pesos, small white bread now costs 36 pesos, before 32 pesos.

The increase in these products stands out because they were the ones that were integrated into the Package against Inflation and High Costs (Pacic), promoted by the federal government to control the rise in prices of the basic basket of Mexico due to inflation. This agreement would last six months, so this period has already passed and Bimbo proceeded to include these basics among its price adjustments.

Other products that will rise will be the price of sugared donuts, one peso, toasted bread will go from 31 to 32 pesos in Mexican territory.

“Consumer product companies, whether food or non-food, have faced, and continue to face, like us, incredible amounts of inflation. Given the headwinds that we’re facing, particularly in the fourth and first quarter of 2023 we’re going to do what we have to do on pricing. It is difficult, but you have to do it, ”he said in his recent conference with analysts, the president of Bimbo Bakeries USA, Alfred Penny.

Marisol Huerta, an analyst at Grupo Financiero Ve por Más (Bx+) explained that the results of Grupo Bimbo have been positive because they are compensating their volumes with the increase in prices of their products.

The net sales of the bakery group amounted to 102,821 million pesos in the third quarter of this year, an increase of 20% compared to the same period of 2021, mainly due to the favorable price mix and the increase in volumes, said the bakery mexicana in its third financial report of the year.

The Bx+ specialist recalled that the increase in Bimbo products has been mainly in the categories of sweet bread, pastries, cookies and snacks.

What we would expect for next year is that the company obtains better coverage and less pressure because there is a slightly more stable environment for raw materials (corn and wheat), “considered Marisol Huerta.

He recalled that Bimbo traditionally raises the price of its products at least once a year, either at the beginning or at the end of the period.

The associate director of Stock Market Research at Actinver Casa de Bolsa, Valentín Mendoza, explained that Bimbo has applied measures to increase prices, taking care of the balance sheet so as not to affect its profitability and the demand for its products.

“It is normal to expect companies to increase prices in an environment with inflation and raw materials becoming more expensive, especially since this year has been atypical and companies have had to transfer prices without affecting demand and see how much it can affect to the consumer, that is why we have seen gradual increases in Bimbo products, but it has not been the only company that has taken this measure,” Mendoza highlighted.

“The big question remains until when are we going to see a turning point for the consumer to begin to reduce their consumption volumes because they consider that the prices of the products are already high, although it is difficult for people to stop consuming bread is It’s possible to see a substitute effect between other similar foods or brands etc.,” he added.

grows in bag

With inflationary pressures and price increases, Bimbo continues to grow on the Stock Market

Despite the inflationary pressures of the year, reflected in the increase in its costs in raw materials (such as wheat and energy), freight and labor, the performance on the stock market has been positive for the iconic company of the “Osito Bimbo” .

The Grupo Bimbo bakery is among the five winning firms of the Mexican stock exchange (BMV), in a volatile and falling year for world stock markets, with an accumulated return of 35.92% in 2022.

Other companies with higher profits are the retailer Chedraui (+99.10%); the financial ones Bajio Bank (+63.90%); Gentera (+63.30%); y Inbursa Financial Group (+40.30%).

Analysts explain that the company has presented positive numbers, not only in its price on the stock market, but in sales that have set record quarter by quarter this year, supported by various strategies to offset the increase in inflation, such as the increase prices of your products, the mix of categories and products, as well as initiatives to increase your productivity.