Maple Leaf Foods to raise prices in early 2027 to offset inflation

Maple Leaf Foods Inc. plans to raise prices on its products in the first quarter of 2027, citing rising costs for fuel, feed, freight, packaging and poultry. Chief executive Curtis Frank announced the move during the company's third-quarter earnings call on Wednesday, calling the current situation a "challenging external environment." The company has not yet announced the details of the price hike to its customers, which include all major grocery retailers across Canada. Maple Leaf products are found in 92 per cent of households in the country.

Frank said the company is paying eight per cent more for live poultry compared with the same period last year, and chicken products account for 40 per cent of its overall sales. Fuel surcharges have increased 17 per cent in the last quarter, alongside higher costs for labour, packaging and ingredients. "When you lump all those together, there's just more overhanging general inflation than we would have expected at this point in the year," Frank said. "We're going to have to address that early in the year next year."

Statistics Canada reported that the war in the Middle East drove a 27.8 per cent spike in gasoline prices in September compared with the same period last year, contributing to an annual inflation rate of 3.1 per cent. The closure of the Strait of Hormuz also substantially hiked the cost of farming, as approximately one-third of global fertilizer trade moves through the narrow channel. Chicken prices have climbed as demand soars in response to high beef prices and consumer interest in protein, while farmers have struggled with shortages of fertilized eggs and chicks resulting from avian flu. Maple Leaf has already passed some costs on to consumers, introducing a fuel surcharge of $0.11 a kilogram on its prepared meats and poultry shipments earlier this year. Frank said it is becoming increasingly challenging to pass along costs to consumers, who are also struggling with widespread inflation and rising interest rates. The company is responding by investing more heavily in advertising and promotions and continuing a disciplined cost allocation strategy, which recently included closing two plant-based meat processing plants in the United States to consolidate operations.

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Despite the challenges, Frank said the company "delivered a strong third quarter." Sales increased by 2.4 per cent to $1.03 billion, marking the eighth consecutive quarter of year-over-year growth. The company's branded products, particularly its protein snack kits, benefited from consumer trends, as did the relaunch of the Yves Veggie Cuisine brand. Retail and food service sales of poultry grew by four per cent.

The inflationary environment is expected to affect the company's performance for the 2026 fiscal year. Maple Leaf said its full-year adjusted earnings before interest, taxes, depreciation and amortization will be around the bottom of its previous outlook range of approximately $520 million to $540 million. Its capital allocation range will be $130 million to $150 million, down from a previous range of $160 million to $180 million. "We are managing the near term environment with discipline, while continuing to make the right choices for the long-term health of the business," Frank said.

With files from The Globe and Mail