Grocery price inflation concerns: How small manufacturers are trying to keep food costs down

J.R. Stone Image
Thursday, May 30, 2024
Grocery price gauging: The battle to bring down food costs at stores
ABC7 talked with a family-owned organic company trying to keep food prices low.

SAN FRANCISCO (KGO) -- For the first time in a year, grocery store prices across the country declined in April. They dropped .2%, according to federal data. However, prices are still well above where they were pre-pandemic and, for many consumers, food costs are their top concern.

ABC7 News reporter J.R. Stone spoke with the CEO of a family-owned northern California organic food company who says they are doing what they can to keep prices low.

MORE: Walgreen's slashing prices on more than 1,500 items in recognition of inflation

It's the little price tags that may haunt you when you go to the store. "Wait, how much is it?" you think to yourself.

"My goal is to say, 'How can we sell it for less?" says Gary Cohen, president and co-owner of Natural Value, an organic food and eco-friendly company based out of West Sacramento with products going all over the country.

They've been family run for 29 years. At Valencia Whole Foods in San Francisco, their products can be seen on the shelves.

Overall food prices are officially up more than 20% from where they were in 2020, according to federal data. Cohen says he is concerned over the actions of other food companies.

MORE: Target, McDonald's and Wendy's announce discounts. Has a price war broken out?

"Companies coming out and saying that their sales went up 1% but their gross profit or net profits went up 5%. And so I think there is a certain amount of companies taking advantage of cost increases to pad their profit margins," said Cohen.

Cohen isn't the only one talking about the 10 or so main companies that dominate the market.

"Well J.R., all you have to do is walk in the grocery store and realize that something is wrong," says Joe Maxwell of Farm Action.

He testified about possible price gouging during a Senate hearing last week.

"The evidence that we have clearly rests that blame right at the doorsteps of the largest food corporations in the world," said Maxwell.

MORE: Aldi CEO says stores will focus on lowering grocery prices this summer

He'd like to see the Federal Trade Commission take action.

"They need to do more, they got the backing of the White House, and they need to be all in on taking on these companies and bringing on justice for American consumers," said Maxwell

UC Berkeley economists ABC7 has talked with say that inflation is real, pointing to minimum wage and labor cost among other factors. As to what happens next with prices... mixed opinions.

"They will stabilize, hopefully, and they will go up. I don't see them going down," said David Zilberman, who is an economist at UC Berkeley.

"Unless there is some other disruption in the next few months, then we should see prices returning to something a bit more normal, maybe not back to where they were but we're not going to see the panic type prices we had a couple of years ago," said Brian Wright, who is an agriculture economist at UC Berkeley.

MORE: Target to lower everyday prices on 5K frequently shopped items amid latest inflation report

Cohen admits that business has been strong because their organic products are often some of the lowest-priced products.

'It's sad that we have to attribute our growth to the fact that consumers are hurting. I would rather say to you we have a customer that grew their business by 100% instead of 600% because that 600% growth is that people are hurting and it bothers me that that is the case," said Cohen.

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