Consumers might just start saying “no” to Honey Nut Cheerios.
That comes as General Mills, which also produces Yoplait yogurt, Gushers, and Häagen-Dazs ice cream, said it would raise the prices of some packaged goods Wednesday, due to rising shipping and commodities costs.
“In terms of pricing, we are going to use a number of levers in some markets and some businesses; it’s going to be list price increase,” said Donald Mulligan, the firm’s Chief Financial Officer, also pointing to greater inflation in the U.S. economy.
That news, alongside a lowered full-year forecast, cut the 151-year-old food giant’s market value by $2.5 billion, to about $25.8 billion. Shares feel about 9% in trading—its single worst slide in almost a decade.
That came as General Mills said during its fiscal third quarter earnings that it expected earnings of $3.08 to $3.11 per share for the year—a significant difference the previously forecasted $3.17.
Higher shipping prices are ringing throughout the industry. During the firm’s earnings call, CEO Jeff Harmening, noted that freight costs now represent about 20% of shipments, against a historical 5%.
“In fact North American freight spot prices were near 20-year highs in February,” he said.
Correction: An earlier version of this article attributed the quote referring to higher freight costs to Vice President Jeff Siemon. This article has been edited to reflect that CEO Jeff Harmening made the statement.