Food and drink market update - May/Jun

16 May, 2024

Overview

March saw the Foodservice Price Index (FPI) fall below 10% for the first time in two years.

  • UK inflation has fallen to 2.3%, just above the target of 2%, the lowest level in almost 3 years. This means prices are still rising, just at a slower rate
  • Poor weather conditions this year continue to put availability challenges to the fore in many different areas. Potatoes remain the biggest area of focus and with delayed planting in some regions, it’s raising concerns about a slow start to the next season.

Market movers:

Fruit and Veg

Homegrown UK produce will become more prominent in the marketplace with berries, greens and potatoes starting to take centre stage on the plate. Jersey Royal volumes will start to increase with Cornish new potatoes becoming available.

However, poor weather has reduced the quality of Maris Piper potatoes and may soon affect baking and salad potatoes. Wet conditions are delaying planting, potentially extending the current issues.

Wet weather and flooded fields are also impacting UK parsnips, both quality and availability. As the season comes to an end, stocks of carrots and parsnips are running low due to lower yields last year. Pricing has already firmed up with potential switch to imported products in the coming weeks.

As Spanish broccoli comes to an end, UK products will begin to take over. However, growers have reported later planting than usual due to the recent wet weather and this has pushed the UK crop to around mid/late June. Flooding in Kenya and hailstorms in Spain have affected supply of tenderstem broccoli and mangetout.

Tight supply of spring greens due to written-off fields and high demand have limited availability, though new fields are starting to produce.

UK salad season has arrived with a range of whole-head lettuce such as iceberg, cos, lollo and oakleaf. Mainstream lettuce from Spain is now improving; UK transition at end of May.

Garlic leaves are starting to flower which are ideal for a gratifying garnish to the salad plate.

Great quality tomatoes will be arriving from the Netherlands but also homegrown options such as the colourful heritage varieties are here.

Red, green and yellow peppers are arriving from the Netherlands.

It's a great time to make use of baby spinach leaves; the smaller leaves have a milder flavour, a terrific way to bulk up a dish and work incredibly well with feta or blue cheese.

Tip #1: Asparagus has been great this year, make use of this quintessential spring veg while it lasts as by early June it will be coming to an end.

Tip #2: Consider butternut squash as a substitute for parsnips. Tenderstem broccoli can be switched for broccoli and cauliflower. Rainbow chard is currently in season and a good alternative to lettuce.

The arrival of strawberries in the seasonal calendar is still a much-anticipated occasion and should be celebrated accordingly. Oakchurch in Herefordsire and Warrens Cheddar in Somerset, both are known throughout the industry for producing the finest soft fruit, have begun their harvest. We will soon see the arrival of raspberries from growers around the country.

In the coming weeks the transition over to Spanish melons will begin, we may even see some products at the beginning of June. Melons from Spain are considered to be the finest and it is a great period to highlight this seasonal gem.

At their best:

  • Asparagus
  • New Potatoes
  • Strawberries
  • Peas
  • Wild Garlic
  • Strawberries
  • Baby Spinach

Planning ahead:

  • Raspberries
  • Blackberries
  • Gooseberries
  • Broccoli
  • Cherries
Fish and Seafood

Now entering spawn, shellfish quality declines, in turn driving inflation. Adhering to the advice of avoiding
bivalves without an 'R' in the month is wise, not merely folklore. We are now in closed season for native oysters.

The shortage of biomass has led to a significant scarcity in farmed halibut, especially the larger ones, inevitably driving prices upward.

Cod and haddock prices are now on the rise. Anticipated haddock inflation hits as spawning begins reducing fish quality. Premium prices will be paid as suppliers fight for line caught stock over trawled.

Sustainability Tip: Due to the fishing ban, sea bass prices initially rose but have since eased beyond original expectation due to abundant catches and excellent quality fish. Sea bass is a great sustainable choice, benefitting from effective monitoring and science-based regulation. Seasonal fishing bans protect the population and ensure long term viability.

Dairy

Unusually wet conditions have hindered production, YTD milk production is down 2%. Wet weather will also pose future challenges on pricing for silage feed for the winter, leading to futures on animal feed increasing by 20% over the past two months.

Bakery and Bakers

Rising Costs: Inflation has notably impacted the fresh bakery space over the past month, driven primarily by an 9.8% YoY increase in the living wage.

Staff Shortages: Bakers, especially smaller establishments, continue to face significant challenges in attracting and retaining staff.

Competitive Pay Rates: To remain competitive, bakeries have had to increase their pay rates above that of the
living wage increase, adding further pressure to operational costs.

Cost Saving Tip: As a cost-effective alternative, we recommend considering a switch to frozen bakery products. This can help mitigate some of the financial strain caused by rising wages and staff shortages particularly apparent right now in the fresh product space.

UK Key Market Movers (CPI)

The Consumer Prices Index (CPI) is a key measure of inflation in the UK. Movements in CPI give a high level overview of the key categories experiencing inflation. Below is a monthly snapshot of the top food commodity price inflation movements impacting the UK. The data is from Office for National Statistics (ONS).

Percentage change over 12 months:

  • Milk, cheese and eggs: -1.7%
  • Oils and fats: 9.6%
  • Breads & cereals: 2.7%
  • Vegetables: 5%
  • Meat: 1.9%
  • Sugar, jam, syrups, chocolate and confectionery: 7.5%
  • Fish: -1.3%
  • Fruit: 2.9%

Sources: Foodbuy, ONS, Dole, Mintel.

Share this article:

Stay connected

Enter your email address to be kept up to date with latest news, company developments and market insights. You can unsubscribe at any time.
View our Privacy Policy.