Not even MoonPies and Goo Goo Clusters can escape the soaring costs of food and fuel — twin factors that have forced these confections and some other Tennessee-made brands that consumers cherish to boost prices or tinker with operations to survive.
The wholesale price of an individual pack of 35-cent Goo Goo Clusters, the gooey chocolate-and-peanut confection, went up 5 cents in February. The last time wholesale prices had been raised — by 3 cents a pack — was two years ago.
Prices could be going up, too, at Knoxville-based Bush Brothers and Co., which makes Bush's Baked Beans.
And Old Hickory-based Brignola Foods is considering selling its pasta sauce in lighter, vacuum-sealed bags instead of heavier glass jars to save on shipping. The company figures the move could whack 19 percent off its freight charges.
"The price of raw product is up. Every component of our product is up," said Steve Harrison, vice president of government and regulatory affairs at Bush Brothers and Co.
But it is the makers of the MoonPie, perhaps Tennessee's signature snack, who are among the worst hit after many decades in business. Officials at Chattanooga Bakery Inc. say the cost of ingredients there is up so dramatically that they've had to scramble.
"We're eating some of it in the form of diminished profitability," said Tory Johnston, vice president of marketing. But the bakery increased the wholesale price of a double-decker MoonPie by 3 cents in March.
The modest price increase was a tough decision for the company because the MoonPie has always been marketed as an affordable treat, selling for just a nickel in the late 1950s when the pies were often served alongside a cold RC Cola.
Nowadays, MoonPies retail for 69 cents to 79 cents in most stores. MoonPie's manufacturers say they're reluctant to raise prices too much for fear of chasing away longtime fans. With fuel prices going up, sales of the snacks have sagged at many gas stations because motorists have less to spend inside the store after filling up at the pump. But sales have done well at discount stores, Johnston said.
Chattanooga Bakery produces 1 million MoonPies a day; its largest supermarket and chain store customers pick up the products in their own trucks, but the bakery also works with a distributor to deliver other merchandise.
"We can't pass all these costs on to the consumer or no one would buy a MoonPie," Johnston said. "There is a threshold above (which) we would be in real danger of harming ourselves."
It costs more to bakeHigher ingredient costs have been tough for the Chattanooga-based company and other food manufacturers to swallow. Prices for a MoonPie's roughly 15 ingredients have all gone up by double or triple digits, Johnston said.
Meanwhile, the makers of Goo Goo Clusters say chocolate prices have risen about 40 percent since a year ago.
Jimmy Spradley, chief executive officer of Nashville-based Standard Candy Co., which makes the chewy candies, said soaring costs have been exacerbated by a poor cocoa harvest in Africa and higher energy costs.
Another big problem hitting many manufacturers is the cost of grain. Corn, used in making Jack Daniel's whiskey, is more expensive and it makes up about 80 percent of the drink. The distillery typically raises prices about 3 percent a year, in part to cover fluctuating commodity prices, said Master Distiller Jeff Arnett.
Steep fuel prices are a problem for Old Hickory's Brignola Foods Inc., too.
As gas prices started climbing, the company began researching the possibility of shipping its pasta sauce in vacuum-sealed bags instead of heavier jars. If it made the switch, the company said, it could ship its products to customers in smaller boxes without bubble wrap, making the packages lighter.
Other food manufacturers fear that raw materials costs will only creep higher.
"As we came into 2008, our attitudes were there's got to be some relief (ahead), but the commodity prices got worse," said Scottie Mayfield, president of the nearly 100-year-old Mayfield Dairy in Athens, Tenn. "This is the world we're going to have to live in … and do the best with what we have."
The cost of milk at Mayfield Dairy, the largest dairy in the Southeast, is projected to nearly double this July compared with 2006. The company paid an average of $11.76 for 100 pounds of milk two years ago, and this July that number is projected to be $20.71.
The cost of distributing the milk to stores has gone up dramatically as well. Mayfield expects the company will have to pay more than $1 million in diesel fuel costs this month.
Not all businesses are raising prices. At Nashville's Tennessee T-Cakes, owner Frances Barkley said she's determined to continue to use the same high-quality ingredients that she has always used to bake the small, sugary confections. That means she has to absorb higher costs for items such as flour.
The cost of flour has more than doubled since last year, Barkley said. Tennessee T-Cakes produces more than 1.5 million cakes a year. "My clients have been very loyal to me, so I am trying to give it back to them," Barkley said.
Manufacturers must count on consumers' loyalty to get them through difficult economic stretches.
Kathleen Yates of Goodlettsville said she plans to keep buying MoonPies for her children even if prices rise. Yates, 41, said she's been eating the treats since she was 7 years old, and she wants to keep a Tennessee tradition alive.
"It's not going to keep me from eating what I like," she said of rising food prices.
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