A Guide to the Food Marketplace this Summer
We hope our previous review of the marketplace and guidance on how to navigate it, mitigating the rising costs and availability issues, was helpful. These updates are provided in conjunction with our supply partners Bidfood.
However, since our last update events around the world have unfortunately not improved greatly. In fact, as we all know, they have become even more challenging.
So let us provide a current and honest picture of where we are in the world today, but let’s also work together to mitigate the negative effects they will have on our care homes and residents! Unfortunately none of us can be completely insulated, but we can act to ensure quality of nutrition and service is still high!
The Events Affecting Food Price and Availability
There are many small issues that affect our market daily and weekly. An example of this is recently India, the world’s second largest producer of wheat, banned exports because the current heatwave has affected crop growth. This of course has an effect of costs and demand worldwide.
However, let’s look at some of the larger and more notable events below:
Energy, Packaging & Labour
Energy and fuel are key components for food producers to both work and move produce worldwide. This added to recent packaging and labour inflation has a direct impact on cost to the consumer.
EU wholesale gas and electricity prices reached record levels during the last quarter of 2021, driven by tight global gas supplies and rising geopolitical tensions. The resulting war in Ukraine has resulted in a large decrease in gas flows from Russia.
With regards to packaging; materials such as plastic and wooden pallets are largely manufactured in Russia, Ukraine and Belarus for example. So the current war is clearly affecting this supply and the utilisation of these exporters.
A worldwide cost of living crisis with extremely high levels of inflation has increased the cost of labour, in some cases significantly. Changing the source of imports due to conflicts and strike action also means changing costs of labour, which again affects consumer prices in the end.
Conflict in Ukraine
As has been touched on above, both Ukraine and Russia are key suppliers to Europe for many components of the food supply chain and all that goes into it. The extra pressures put on alternative producers, or countries of origin, around the world caused by the current conflict is the most significant in recent times.
Animal Feed & Fertiliser Demand
Animal feed and fertiliser are very important price drivers in the food industry. Again with Russia, Ukraine and Belarus being key suppliers, it is believed this will have a profound affect for a long time to come.
Fertiliser prices were already on the rise globally, but the recent conflict has exacerbated this rise. Russia accounts for around 15% of global fertilisers due to its low cost and high production of major types of fertiliser.
Fertiliser prices, which represent over 40% of grain production costs, have increased by 30% since the start of 2022. Therefore the cost of animal feed has now been significantly impacted.
If you are interested in reading more about the market and issues affecting each individual food type at the moment, our supply partners Bidfood have compiled the following presentation: https://bidfood.pagetiger.com/navigator2022summer/navigator-2022-summer
How You can Mitigate Some of the Difficulties These Cause
Here are some of the actions we are taking and have been taking as an organisation on behalf of our clients:
- As our clients know, our processes and procurement software allow us to log orders early; way before the product requirement becomes immediate.
- If the above doesn’t solve shortage issues then we have already assessed required products and menus that may include ‘short-life’ products and planned suitable alternatives in advance.
- We are working with our supplier, Bidfood being a Primary Supplier, to ensure we have sufficient stock to meet your requirements and to facilitate in-bound deliveries. In some cases we are even collecting stock from suppliers when they are unable to deliver.
- We will continue to engage with you, or customer, to achieve procurement forecasts that are as accurate as possible during this volatile period.
- Our Primary Supplier Bidfood is liaising with government departments to ensure the food service industry is prioritised in their decision making.
If you are not a customer of ours, we can provide the following advice:
We would direct you to our recent article that details actions you can take that includes:
- Menu & waste management
- Supply chain management
- Long term savings from better nutrition
Read the details here: https://revive-catering.co.uk/how-care-homes-can-survive-rising-food-prices/
We really are right behind you folks. So please don’t hesitate to contact us with any questions.
