High food and drink inflation predicted to extend into 2023

By Joe Lutrario contact

- Last updated on GMT

High food and drink inflation predicted to extend into 2023

Related tags: Price, Cga

Analysis by CGA and Prestige Purchasing suggests volatility in supply and costs is likely to fuel high food and drink prices until at least 2023.

The report predicts that further rises in inflation are possible in 2022, and that the rate is unlikely to fall below 7% until next year at the earliest. 

Foodservice prices in April were 10% higher than in April 2021, thanks to high energy costs and unstable global supply, the latest edition of the Foodservice Price Index from CGA and Prestige Purchasing shows.

It is the third month of double-digit inflation in a row, with inflationary pressures have been exacerbated in recent months by Russia’s invasion of Ukraine.

The crisis has reduced the production levels of food staples including grains and oils, and driven up energy and fuel costs by increasing oil prices and restricting gas supplies.

Nine of the 10 food and drink categories measured by the Foodservice Price Index recorded inflation in April 2022—seven of them reaching double-digits, and three exceeding 20%. The report highlights areas of particular volatility, including grains, poultry, dairy, oils and fish. 

“The food and drink system continues to be in a high level of instability, with complex impacts upon both cost and availability of product. This is a good time to review menu/ingredient ranges, and supply models to ensure optimum margin in the months ahead,” says Prestige Purchasing CEO Shaun Allen. 

“Energy costs have a direct impact on prices right across the foodservice sector, and the war in Ukraine has piled on even more inflationary pressure,” adds CGA client director James Ashurst. 

“Soaring prices are also starting to affect consumers’ spending, and on top of global supply issues and the after-shocks of COVID and Brexit, the outlook for the rest of 2022 is extremely challenging.”

Related topics: Trends & Reports

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