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Extreme weather plays ‘dominant part’ in food and beverage pricing

16th Mar 2020 - 08:42
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Climate related issues in the last six months have ‘plagued’ food categories and in some cases have triggered high inflation, with further disruptions ahead, CGA Prestige Foodservice Price Index reveals.

Fiona Speakman, CGA client director of Food and Retail, said: “The weather has always had an impact on food production, but the increasing frequency of extreme events worldwide is creating more tangible impacts. 

“Coupled with the spread of coronavirus it will make for a very challenging spring for the foodservice sector, at a point when many were optimistic about calmer conditions post-Brexit.” 

Seven of ten categories in the index recorded year-on-year inflation in January 2020, with half seeing a month-on-month inflation. 

The Fruit category has faced a summer of storms, hail and flooding, which resulted in an unexpected inflation rate of 17% in September 2019. 

The Vegetables category saw widespread problems on the lead up to Christmas, with brassica harvests, which led to supply concerns of Brussels sprouts and cabbage. 

The Fish category faced stormy weather that caused ‘treacherous’ sea conditions, which in turn reduced fleet catches. The year-on-year inflation reached 22.6% in January. 

Shaun Allen, Prestige Purchasing chief executive, added: “External influences such as weather and disease have been playing a key part in food and beverage pricing for some time. 

“With Covid-19 now looking likely to have an effect on supply chains, it is more important than ever for buyers to be mapping their supply chains and seeking additional origins to manage the supply risk on products that come from identified problem areas.” 

The Foodservice Price Index report has suggested that climate change will become a key part of supply chain management. This could challenge businesses to seek sustainable sources and manage costs. 

Prestige Purchasing and CGA, using foodservice data drawn from 7.8 million transactions per month, jointly produce the Foodservice Price Index.

Written by
Carmella Haswell