Cost pressures in CPG do not politely wait for a convenient time. Tariffs on imported packaging components, rising agricultural input prices, and freight cost spikes tend to arrive all at once, right when you have finally found some retail momentum. The question of how CPG brands handle price increases is not theoretical. Founders are working through it right now.
The brands that manage price increases well share a few things in common. They move deliberately instead of reactively. They communicate with buyers before they update pricing sheets. And they understand that the way you handle a price increase says as much about your brand's operational maturity as the products on the shelf.
When Is the Right Time to Raise Prices
Raise prices when your margin compression becomes structural, not cyclical. A single quarter of elevated input costs does not justify a price increase if your cost structure is likely to normalize. But when tariffs lock in at a new baseline, when a key ingredient has reset to a permanently higher price level, or when your landed COGS has moved up more than 8 to 10 percent with no relief in sight, that is a structural shift.
The timing question also has a retailer relationship dimension. The worst time to announce a price increase is during a promotional period, right after a new item setup, or immediately before a category review. Buyers who just championed your product to their category manager do not want to be blindsided with a price increase three weeks later.
Give retailers 60 to 90 days notice before a price increase takes effect. Send the notice to your buyer directly, not through a distributor. Buyers who hear about your price increase from their UNFI rep before they hear it from you will not forget it.
The right window is typically between category reviews, with enough lead time for the retailer to decide how they want to handle the new shelf price. Some will absorb a portion. Most will pass it through to the consumer. Either way, they need time to make that call on their own terms.
Building the Business Case for Your Buyers
A price increase notification is not a one-line email with a new price sheet attached. Buyers receive price increase requests from dozens of brands every quarter. The ones that get approved are the ones with a clear, documented rationale.
Your business case needs three components. First, the specific cost driver. Vague references to "rising costs" get ignored. "Our primary packaging supplier raised FOB costs 18 percent due to new aluminum tariffs, effective March 2025" is specific enough to respect a buyer's intelligence and substantiate your ask. Second, the magnitude of the impact on your COGS and margin. Show the buyer what your gross margin looked like before and after the cost increase. You are not asking for sympathy. You are showing them that the increase is necessary to maintain a sustainable business. Third, how much of the increase you have already absorbed internally. If you have renegotiated with suppliers, reformulated packaging, or optimized logistics to eat some of the cost increase before asking the retailer to pass any of it through, say so.
Buyers are not unsympathetic to cost pressures. They deal with them across their entire category. What frustrates them is surprise and vagueness. A well-documented price increase request that shows you have done everything possible to minimize the impact is far more likely to be approved than a number with no context.
Some buyers will push back, which is normal. Have a clear floor on your new pricing. Know the minimum price that gets you back to viable margins. And know which accounts are generating enough volume to warrant more negotiation flexibility and which are not.
Opener matches your brand with best-fit stores based on category fit and price point, so you build a retail portfolio that stays profitable as your costs change.
See How It WorksHow Tariffs Are Hitting CPG Gross Margins
The 2025 tariff environment has hit CPG brands unevenly. Brands relying on imported packaging components (tinplate cans, aluminum packaging, glass from overseas suppliers) have seen cost increases of 15 to 30 percent on those components. Brands sourcing ingredients from certain growing regions have seen input price spikes layered on top of existing inflation.
The gross margin math is straightforward and painful. If your COGS is $2.00 per unit and a packaging component that represents 20 percent of your cost goes up 25 percent, your COGS increases by $0.10. That sounds small. At $5.99 retail with a 35 percent retail margin and a 25 percent distributor markup, your effective wholesale price is around $3.12. A $0.10 COGS increase on a $3.12 revenue is a 3-point gross margin hit. Stack two or three of those input cost increases together and you have a real problem.
The brands managing this best are doing three things. First, they are diversifying their supplier base where possible. A brand that was single-sourced on a key packaging component is accelerating their search for domestic or tariff-exempt alternatives, even if it takes 6 to 12 months to qualify a new supplier. Second, they are reviewing their SKU portfolio for margin outliers. In periods of cost pressure, the right move is often to simplify, discontinue the lowest-margin SKUs, and concentrate production volume on the lines that work. Third, they are using the price increase conversation with buyers as an opportunity to rationalize their promotional calendar. If you are going to raise prices, it is also a good time to reduce the frequency of deep promotions that erode the value you are trying to protect.
How to Explain Price Increases to Consumers
The consumer communication is where brands consistently underestimate the importance of tone. The goal is not to avoid the conversation. Consumers notice when their favorite product goes from $6.99 to $7.99. Pretending otherwise is worse than acknowledging it.
The most effective consumer communication on price increases is brief, honest, and focused on what has not changed. Something like: "Our ingredients and packaging costs have gone up significantly this year. We have done everything we can to minimize the impact, and we are raising our prices to stay in business and keep delivering the quality you expect." No overwrought explanation. No corporate-speak about "adjusting our pricing to reflect market conditions." Just the truth, plainly stated.
Consumers are remarkably forgiving of brands that are honest with them. What they do not forgive is finding out you tried to hide something.
Where brands lose consumers is in the execution details, not the price increase itself. A quietly reformulated product with the same price is often more damaging than an openly communicated price increase. If you are changing pack size, net weight, or recipe to absorb some cost pressure, communicate that too. Shrinkflation (quietly reducing pack size while holding the price) generates intense consumer backlash when discovered. Transparency about a straightforward price increase rarely does.
Your DTC and email channels are the right venue for this communication. Social media can work but requires careful moderation. The message should reach your most loyal customers directly, before they notice the new price on shelf.
Protecting Long-Term Brand Perception During a Price Increase
Price increases do not have to mean brand damage. In fact, handled well, they can reinforce your brand's positioning.
Premium brands have permission to raise prices that value brands do not. A luxury chocolate brand raising prices 12 percent because of cocoa commodity costs is consistent with the brand story. A private-label equivalent raising prices 12 percent risks losing on the only dimension that matters to their customers: cost. Know which positioning bucket you are in and use the price increase communication accordingly.
If your brand is positioned in the premium or ultra-premium segment, a price increase handled with transparency can actually reinforce your quality story. "We do not cut corners" is a natural companion message to "our costs have gone up and we are maintaining our standards."
The volume impact of a price increase varies significantly by price elasticity, competitive set, and channel. Most CPG brands see a 5 to 15 percent volume decline in the 60 to 90 days following a price increase before demand restabilizes. If your category is highly competitive with close substitutes, the impact can be steeper. Run the math before you finalize your pricing: a price increase that recovers margin percentage but destroys volume can leave you worse off on total gross profit dollars.
Managing the Promotional Calendar After a Price Increase
After a price increase, your promotional strategy needs a reset. The instinct is to run a deeper discount to compensate for the price increase and protect volume. That instinct is usually wrong.
Running a 30 percent off promotion six weeks after a price increase tells consumers the new price is not real. It trains them to wait for promotions, destroys the price anchor you just established, and annoys buyers who approved the increase based on your business case.
The better approach is to hold your new base price firmly for at least two quarters before running any promotional activity. When you do promote, run events tied to meaningful retail moments (new store distribution, a product launch, a seasonal hook) rather than open-ended discounting. Keep promotional depth moderate, typically 15 to 20 percent off rather than the 30 to 40 percent depths that feel necessary to move volume.
Opener finds the retailers and channels where your product economics work, so one bad tariff quarter does not derail your retail growth.
See How It WorksWhen Price Increases Reveal Structural Problems
Sometimes a cost increase makes you do the math you should have done earlier. If running the numbers on a 10 percent COGS increase reveals that your product is essentially unprofitable at current wholesale prices, the cost increase did not create your problem. It exposed it.
The right move in that situation is not to absorb the loss and hope costs come down. It is to confront the unit economics directly. That might mean a larger price increase than the cost increase alone justifies. It might mean a packaging reformulation to reduce costs. It might mean reconsidering which channels and accounts are actually profitable for your brand to service.
The brands that survive persistent cost pressure are the ones that treat each cycle as a forcing function for operational clarity. Every price increase conversation with a buyer is a chance to evaluate whether that account is generating enough contribution margin to justify the attention it gets. The accounts that survive that analysis are the ones worth fighting for. The ones that do not are better replaced by best-fit stores where your product commands the price it needs.
Opener matches CPG brands with retailers where the category fit, pricing, and margin expectations align. Start building a wholesale portfolio that works.
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