You will have noticed that food prices in wholesale catering are on the rise. But why is the cost of everyday food and drink items increasing? In this blog, we’ll address the main factors contributing to price increases across the industry and what Dunns is doing to help.
From the cost of production to shipping and labour, plus basic commodities such as fuel, every section of the food supply chain is feeling the strain which is leading to sharp price increases and uncertainty.
Is Brexit still slowing down the food supply chain?
Brexit continues to have implications on the food supply chain, from reduced numbers of EU workers, who previously made up the majority of the workforce within the industry to logistical struggles with the movement of goods.
A recent report by the accountancy firm Grant Thornton concluded there were almost 500,000 within the food industry. Grant Thornton’s research showed that this has been exacerbated by the pandemic, with 1.3 million workers having left the UK who are yet to return.
How rising fuel and shipping costs are impacting the food supply chain
If you’ve had to fill a vehicle in the past few months, you’ll know that the cost of fuel is rising sharply. Unfortunately, in an industry such as wholesale food delivery, the health of our sector relies upon the stability of key overheads such as shipping and fuel.
With the costs of global shipping on the rise and fuel rising to record highs, unfortunately, the costs must be reflected in the cost to buyers and consumers. At Dunns, we will always aim to do what we can to limit supplier cost increases being passed on to you. We know price increases are never good news, but we hope that by giving our customers the information as soon as possible it allows you to plan ahead.
How the war in Ukraine is driving global prices
The devastating crisis we are all witnessing in Ukraine is also now exacerbating challenges in the food supply chain and impacting global food prices.
With much of Europe’s frozen and raw meat coming from Eastern Europe, the industry has seen sharp price rises of more than 10%, with more rises expected. Not only are there production delays due to the current war in Ukraine, but there are also price increases associated with transporting produce to the UK such as increased fuel prices and labour shortages.
The issues are not restricted to poultry. The Ukraine crisis led to a dramatic leap in the price of wheat which has serious repercussions for the pig farming sector, which is already struggling with unprecedented spikes in costs.
Like the rest of the world, we’re hoping for a swift and peaceful resolution for the people of Ukraine. Read on to find out how Dunns is mitigating the current price increases within the wholesale industry.
Labour shortages and the cost of wholesale food
With the job uncertainty posed by the Covid-19 pandemic in the hospitality and wholesale sectors, many workers have chosen to take up different career paths and haven’t returned to the industry as previously expected.
The UK wholesale sector as a whole is struggling to access historic levels of workers following restrictions on movement following Brexit and Covid-19. This labour pool has been reduced dramatically with many workers opting not to return post-Covid-19.
An example of this in the UK is the low number of specialist visas taken up by workers in the sector. Only around 100 skilled butchers took up the temporary visa option in the pork sector, out of the 800 visas available. As well as affecting production capabilities and service, it means the salaries for workers who do take up these roles is increasing pretty significantly, adding to overall production costs.
How the Plastic Tax will affect the wholesale industry
Another consideration is the upcoming industry wide taxation on plastic which is also driving up production costs. If the pandemic has taught us anything, it’s that the food supply chain is just that: a chain. When elements along the way increase in price, pressure starts to build along the whole chain, leading to price increases.
The plastic tax will be levied on plastic packaging that contains less than 30% recycled plastic. Imports of products in plastic packaging, such as drinks in plastic bottles, will also be impacted. The new laws come into force from April 2022.
What Dunns are doing to stabilise the rising cost of wholesale food and drink
Here at Dunns, we’re doing everything in our power to ensure that our customers don’t get left behind.
We are hiring more staff
We are recruiting to ensure we can meet demand and effectively distribute the products on our side of the supply chain. This allows our customers to buy with stability in mind, with the reassurance that Dunns will always deliver.
Watching markets to source best deals
Here are Dunns, we’re increasing stock holdings and buying ahead to hold off increases for as long as possible, allowing our customers the time to make plans. Our buying team are working closely with suppliers and applying pressure to limit increases. Dunns always keeps a close eye on global supply chains that help us to forecast potential issues and give our customers time to plan ahead. We aim to source the best deals and are constantly making deals with new suppliers to ensure a smooth and steady supply of necessary goods.
How you can save money on wholesale food amid price rises
Talk to us
Your sales reps are constantly keeping on top of what the current pricing trends or supply issues are, so the best way to stay in the know is to keep in touch. We are here for you and we can help when you need it most.
Bulk buy / Buy ahead where possible
The inflationary pressures at the moment mean some prices are changing weekly and may continue to rise. The best way to keep ahead of rising costs is to stock up wherever you can, especially of items with a long shelf life or that you use a lot of.
Consider the alternatives available
As members of the Country Range Group, we bring access to the Country Range label which now has over 800 products in the range. These are specifically developed for use in the professional kitchen and are quality tested with specifications to match leading brands.
Keep an eye on our Promotions
Now is the time to get reading your brochures plus the Clearance & Specials sections on our Coldweb ordering portal for deals and savings to be made.
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