SPC is insulated from rising gas prices with contracts locked in for the Shepparton plant until the end of 2023, but chief executive Robert Giles said the energy crisis was impacting in other ways including packaging and cans.
“As a direct cost, that won’t impact us, but packaging, everything else it touches will,” Mr Giles said.
Mr Giles spoke out publicly two months ago warning about the looming risk of rising inflation.
“We passed some on to consumers last year and we probably will again,” he said.
Prior to those price rises a can of tomatoes has remained static for a decade, but Mr Giles said input costs continued to rise, including the cost of getting fruit to the factory.
SPC will pay more for fruit this year, with the minimum wage for pickers and higher input costs for growers.
Mr Giles said some of that additional cost would be passed on to consumers and some absorbed by the company, which has maintained high volumes of production.
“We are really conscious that we can’t keep pulling the price lever,” Mr Giles said.
The upside for SPC is that the input costs of major competitors, particularly Italian tomatoes, are rising too and the Australian manufacturer will have a competitive advantage as consumers struggling with cost of living look for value.
“A lot of the imports are going up faster than we are,” he said.
Supermarkets have been responsive to price increases to date and Mr Giles said contracted lines were being reviewed as they become due.
“As fruit prices for the new crop come through, if packaging prices don’t come off, we will have to look at pricing,” he said.
The tight labour market is also a problem, but SPC is confident it can attract seasonal workers locally, but is also investigating sourcing temporary workers.
“We are looking at the different schemes to look at importing workers,” Mr Giles said.
The recent launch of SPC baked beans with Vegemite is already tracking well in supermarkets and the company is currently trialling SPC to-go snacks in selected service stations as it continues to diversify its product offering.