Whilst ONS CPI food inflation eased slightly for July, there is a lot of commentary to suggest that was the calm before the storm. A variety of factors indicate increasing food costs are on the horizon: in May, the UN Food and Agriculture Organisation’s (FAO) global food price index increased at its most rapid monthly rate for over 10 years, plus we have seen significant rises at a commodity and farmgate pricing level.
This year has seen a great deal of uncertainty and turbulence. Foodservice has experienced precipitous cost rises in many areas:
- HGV Driver shortages - over 100,000 vacancies nationally
- Increased driver wages to counteract these shortages - up 15%
- Agency staff and courier costs - up 37%
- Commodity cost increases
- National Living Wage increases
- Increasing fuel and utilities costs:
- Electricity has increased 56% year to date
- Gas has increased 51% year to date
Since March, inflation has been ascending, sharply and consistently. It’s reached the highest levels seen in around three years, since the peaks 2017 and 2018. The Bank of England are forecasting inflation rates to remain close to 2% for 2022, 2023 and 2024.
As experts in food procurement and supply chain management, specialising in independent education, allmanhall are currently working with suppliers on price increase mitigation wherever feasible and to ensure the inevitable changes will be as low as possible for their clients. Even so, the unavoidable likelihood of food cost inflation over the coming period is very high. Costs are increasing and the impact on catering and food is already - and is likely to continue to be - significant.
September, with the ‘back to school’ period, is always a pressurised time for the whole food supply chain, across all sectors. This year it will, unfortunately, be even more of a challenge. The HGV national skills shortage is a multi-industry challenge, heavily impacting just-in-time supply chains like food, and therefore all types of catering and foodservice operations. There are implications to the inbound logistics to catering suppliers and also to their
outbound delivery capabilities. As leading food procurement specialists, allmanhall are advising that there will be disruption and recommend the following action to catering teams:
- Orders are placed with as much lead-time as possible
- If you have space to increase your stock holding, to do so
- Where possible, order full cases rather than splits
- Remain as flexible as possible to cope with change at short notice.
With such disruption and uncertainty, and with price increases looming, you may find the support of a procurement specialist an essential service. A food procurement expert, like allmanhall, will negotiate with suppliers on your behalf, to keep price increases to a minimum and ensure cost savings are still possible. Award-winning and independently owned, allmanhall will also mitigate risks and support your catering team and your care homes in managing supply and delivery challenges. Visit allmanhall.co.uk
to learn more.