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July 4, 2018

Food and drink inflation adds to ‘ongoing turbulence’ in the foodservice industry

The food and drink industry’s rising inflation rates are impacting the foodservice sector’s supply chain. This is according to the the CGA Prestige Foodservice Price Index latest report, jointly produced by CGA and Prestige Purchasing.

By Jasmine Lee-Zogbessou

The food and drink industry’s rising inflation rates are impacting the foodservice sector’s supply chain. This is according to the the CGA Prestige Foodservice Price Index latest report, jointly produced by CGA and Prestige Purchasing .

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The findings have recorded an 11.1% increase in soft drink prices compared to the previous year, while fish prices have reached ‘record highs’ with an inflation rate of 23.8%. These increases follow the carbon dioxide shortage and the government’s sugar tax.

Rising fish prices have been triggered by salmon prices primarily and uncertainty over the future of fishing quotas.

CGA food client director Fiona Speakman said: “Our new Foodservice Price Index report is a reminder that inflation in the industry remains unpredictable. While some areas of food and drink have seen some welcome price stability in recent months, other categories are vulnerable to supply shocks. For all businesses, it is crucial to properly understand inflation trends and adapt purchasing and pricing strategies accordingly.”

The Foodservice Price Index also includes concerns of a hike in meat prices due to rising tariffs in main territories and large supply issues in Brazil, which is the world’s largest poultry exporter.

The index stated that the high prices are ‘evidence of the ongoing turbulence in the foodservice sector’. The data has been formed from over 50% of the foodservice market.

Prestige Purchasing chief executive Shaun Allen said: “The upward movement in inflation to its highest level so far this year will not be welcome news for operators. The industry has experienced a continuous stream of supply issues this year which is contributing to the rise in inflation within the foodservice sector and the recent shortage of CO2 is only likely to add further pressure over the coming months.

“With more turbulent times expected as we head towards Brexit, it will be more important than ever that businesses take a proactive approach to managing the risks of inflation.”

Free Report
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The critical role of sustainability for Foodservice success in the 2020s

Consumers have radically re-thought their priorities in recent years and changed their habits for the good of the planet, starting to hold companies accountable for their ESG activities. These changes are set to be significant hallmarks of the Consumer Landscape in the 2020s. In order to appease consumers’ new concerns, meeting these new sustainability imperatives will be crucial for the recovery of the Foodservice industry. Consumers are expected to use ESG criteria much more actively in their selection of Foodservice brands to engage with. Download GlobalData’s free report to:
  • Understand the range of ESG challenges currently facing the Foodservice sector
  • Gain insight into consumers’ expectations via consumer survey deep dives
  • Learn from foodservice operators and brands who are already successfully embracing ESG strategies
Stay ahead of consumer concerns and rise to meet them. Download the report now.
by GlobalData
Enter your details here to receive your free Report.

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