📉 Inflation’s Bite on the Bakery Sector 🍞 Despite impressive sales growth in 2023, CSM Ingredients UK has found itself in the red, highlighting the growing strain inflation is placing on the bakery industry. As prices of raw materials and production soar, even established companies like CSM are struggling to maintain profitability. This story sheds light on a broader issue – the fine line between growth and sustainability in a volatile market. CSM’s operating loss, despite a near 10% increase in sales, reflects the sector’s biggest challenge: absorbing rising costs while keeping prices competitive. In an industry where margins are already slim, this balancing act is becoming harder to maintain. It’s a stark reminder of the financial fragility that many businesses face when inflation strikes hard. 💡 What does this mean for bakery businesses across the UK? Here’s my take: Innovation and operational efficiency are no longer optional – they’re vital for survival. Businesses need to explore automation, streamline production, and optimize supply chains to safeguard against economic pressures. Those who don't adapt may struggle to stay afloat in this increasingly tough market. And it’s not just about cost-cutting; investing in sustainable ingredients and processes can attract consumers looking for ethical options, potentially offsetting inflation’s impact. 📊 Food for thought: As the industry evolves, how will bakery businesses balance the need for innovation, sustainability, and affordability? #FoodIndustry #Sustainability #InflationImpact #BusinessInnovation📉 Inflation’s Bite on the Bakery Sector 🍞
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Heads up for all you food manufacturers out there! 🚨 A recent article in New Food Magazine discusses the concerning trend of food manufacturers' margins falling behind. The culprit? A combination of rising food inflation and stagnant profit margins. The article highlights an interesting finding - UK food manufacturers are stockpiling inventory at a time when other sectors are actively reducing theirs. This cautious approach stems from worries about price certainty and supply chain disruptions. But there's a catch: holding onto excess stock is hurting their profitability. 📉 The key takeaway? Food manufacturers need to strike a careful balance between managing risks and maintaining healthy financials. #foodmanufacturing #margins #inventorymanagement #supplychain #foodandbeveragemanufacturing #foodcost https://lnkd.in/g67RhN55
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US food service sector remains a powerhouse amid global market slowdown 🌎 A new report shows that the margins for the US food service remain under pressure despite seeing higher sales. As the world’s largest food service market, the US has enjoyed steady growth in volume and value for a number of years. This growth has enabled major commercial players to expand abroad, making North American brands prominent globally. The US food service industry has faced numerous challenges in recent years, including COVID-19 pandemic lock downs, inflation and financial fall outs. Will this trend continue to grow? 🤔 Read more below...
US foodservice sector remains a powerhouse amid global market slowdown
foodingredientsfirst.com
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Foodservice Price Index hits 28-month low as food prices continue to fall... Year-on-year inflation fell to 4.6%, the lowest figure recorded by the Index in 28 months. May also saw month-on-month deflation of -0.4% - only the fourth such decrease in the last 32 months. The figures indicate a sustained return towards pre-pandemic levels of inflation and more closely mirror trends seen for some time in the Consumer Prices Index (CPI). Shaun Allen, Prestige Purchasing CEO, said: “This fall of input-inflation is very welcome, as the full basket of CPI has also fallen sharply to 2% year-on-year, and diners will soon come to expect stable pricing again in our restaurants. Buyers should be particularly wary of proposed supplier increases in this period of sharply falling inflation.” Reuben Pullan, Senior Insight Consultant at CGA by NIQ, said: “After several years of relentlessly high inflation, these figures show some very welcome respite. While some rates remain higher than businesses would like, the general stability makes it much easier to plan for the future. In turn it should also reassure consumers, who have seen food and drink menu prices rise sharply but will hopefully become more confident with their spending as we move towards the second half of the year.” The full report may be downloaded here https://lnkd.in/eqsA2956 #sustainability #farmtofork #catering #schoolcatering #schoolmeals #food #teachersandschoolemployees #schoolbusinessmanagers #opportunity #strategy #education #procurement #facilitiesmanagement #fm #managementconsulting #plantbased #britishfood Invictus Partnership Ltd.
Foodservice Price Index May 2024
https://nielseniq.com
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The US foodservice industry is the largest globally, which has given many brands a platform for international expansion. But the sector has faced declining traffic and transactions in recent months on the back of high inflation. Despite these headwinds, we think the US will remain a key source of global brands with potential for further international expansion. Financial disclosures of large listed global players show revenue growth slowing. But they still have ample capacity to finance growth. Moreover, several fast-growing operators have proven successful in increasing same-store sales to generate cash flow. This proves the value of their concept and could see them transition into international players. Therefore, we expect to see more US names in the European restaurant landscape. RaboResearch Food & Agribusiness
Foodservice Quarterly
rabobank.smh.re
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Foodservice inflation continues to ease but underlying pressures remain Year-on-year food inflation in the foodservice sector continued its downward trend in September, falling to 2.4%, according to the latest Foodservice Price Index (FPI) from Prestige Purchasing and CGA by NIQ. This marks the 15th consecutive month of decline, offering some respite for businesses and consumers alike. However, the report also highlights persistent inflationary pressures, with nine out of 10 categories showing month-on-month price increases. Read more - https://lnkd.in/gx9ngciy #inflation #prices #food #insight #hospitality #hospitalityindustry #fpi
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🚀 Exciting news for the UK’s food & drink manufacturing sector! 📈 In July 2024, it had the fastest growth of any industry, despite rising shipping and staffing costs. 💡 Strong demand helped companies adapt and thrive, even as inflation pushed prices up. It's a positive sign that the sector is thriving despite the pressures, with businesses finding a way to grow and adjust to challenges 🌟 👉 Read more about the sector's growth here:
Food manufacturing output growing at fastest rate of any sector
foodmanufacture.co.uk
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Hospitality Food Prices Surge Amidst Supermarket Easing Navigating Food Prices: In the hospitality industry, food prices are surging once again, while supermarkets experience easing prices. According to the CGA Prestige Foodservice Price Index, inflation rose to 22.6% year-on-year in June, nearly matching the record high of 22.9% in December 2022. However, supermarkets saw a mere 0.4% price increase during the same month. The stark contrast arises from a complex interplay of factors. Supermarkets vs. Hospitality: The Divide: Retail food markets are more consolidated in supermarkets, where the top ten players own a whopping 75% of the market. Their scale allows for sophisticated contracting and controlled distribution. In contrast, hospitality primarily relies on multiple wholesalers, resulting in diverse ranging but less contractual price protection. Upstream cost improvements take longer to impact hospitality, and recent volatility (like the UK grain corridor arrangements’ failure) adds to the challenge. Global Trends: While global food commodity costs decreased in June (averaging 23.4% below the March 2022 peak), UK producers face less favourable conditions. High farming input costs (energy, feed, and fertilizers) persist, and a tight labour market compounds the situation. Climate vulnerabilities, rising interest rates, and post-Brexit trade costs continue to influence prices. CGA Insights: CGA highlights these dynamics, emphasizing that suppliers—squeezed by rising costs and slim margins—seek respite as inbound costs ease. Meanwhile, the government’s threat of price caps looms over supermarkets if inflation doesn’t subside. Smithfields Social Media #inflation #foodservice #food #smithfields_social_media #supermarkets image: no response
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Food and drink manufacturing leads output and demand growth in March UK food and drink producers outperformed all other UK sectors in both output and new order growth in March and were the primary drivers for the wider manufacturing sector’s first expansion in output in more than a year, according to the latest Lloyds Banking Group Sector Tracker. Of the 14 sectors monitored by the Tracker, food and drink manufacturers reported the fastest growth of output growth in March (59.1 vs. 51.8 in February). This was driven by a strong rise in new orders (59.3 vs. 47.3), which was also the fastest of any sector recorded in March. A reading on the Tracker above 50.0 indicates expansion, while a reading below 50.0 indicates contraction. Read the full article by clicking on the link in the comments.
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It's great to see that not only is inflation levelling out at its target level for consumers, but also that operators are starting to see the cost of raw ingredients head south, too. Our latest Foodservice Price Index (FPI) report, published by CGA by NIQ and Prestige Purchasing shows YoY FPI fell to 4.6% in May; it's lowest figure in 28 months! This is positive news for all involved, with benefits to operators and consumers, as Reuben Pullan sums up in the article - "After several years of relentlessly high inflation, these figures show some very welcome respite. While some rates remain higher than businesses would like, the general stability makes it much easier to plan for the future. In turn it should also reassure consumers, who have seen food and drink menu prices rise sharply but will hopefully become more confident with their spending as we move towards the second half of the year." Follow the link to download the snapshot report, as well as find more details on accessing on-demand access to the full suite of accurate category pricing data.
Many food prices falling as Foodservice Price Index hits a 28-month low - CGA
https://cgastrategy.com
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New report concludes B.C.'s small-to-medium food manufacturers are facing an average 9.3-per-cent net loss.
B.C. food manufacturers see losses as grocers profit, say reports
biv.com
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