EP, in partnership with Prestige Purchasing, look to share regular knowledge and insight on the supply chain and Foodservice inflation situation throughout this year, culminating in a knowledge share event in December 2022. It is fair to say, the industry seems to be set for a turbulent time.
Year-on-year inflation in the foodservice sector hit 13.6% in March 2022, the latest CGA Prestige Foodservice Price Index shows, another record high as supply issues mount.
The figure is the highest in the history of the Index and continues a surge in prices since the start of the year. It is 3.4 percentage points higher than in February, when year-on-year inflation reached double digits for the first time. By comparison, inflation in March 2021—when the UK was still under widespread COVID restrictions—was just 0.1%.
Seven of the ten categories measured by the CGA Prestige Foodservice Price Index were in double-digit inflation in March 2022—and five recorded increases of more than 20%. Prices in the Oils & Fats category are now over 50% higher than just one year ago, while the Breads & Cereals segment has increased dramatically too.
These and other categories including Fish have been heavily impacted by the war in Ukraine, a major supplier of commodities including oils and grains. With shortages likely to continue for some time, further volatility in prices can be expected.
Russia’s invasion of Ukraine has exacerbated other major inflationary pressures, including the soaring costs of energy, fuel, transportation and labour. High levels of inflation are also being seen in categories of the Index including Fruit, Dairy and Soft Drinks, while chicken prices are rising sharply too.
It is not an overly reassuring picture and it seems that high inflation is going to be with us for some time to come. The war also continues to create multidimensional issues resulting in reduced production levels of many staple food groups as well as increases in oil costs impacting on the cost of distribution and manufacture. Some believe that we may see a small reduction in inflation towards the end of the year but many believe that prices are unlikely to fall for the foreseeable future. Despite being a difficult time, the benefits of true partnerships, regular knowledge share, collaboration and the resilience we know that the industry is renowned for could never be more important.