Food and drink prices rise amid scorching heat

Food and drink prices in hospitality rose by 0.2% month-on-month in July amid growing concerns over the impact of prolonged heatwaves, recent data has shown.

The latest Foodservice Price Index from NIQ and Prestige Purchasing revealed the ongoing drought has created stress and uncertainty for key food categories, including broccoli, cauliflowers, potatoes, onions, carrots and parsnips.

While current pricing remains relatively stable, with the pace of monthly price increases slowing from 1.8% in June, the Index stated the industry will be subject to climate-related price disruption that should be closely monitored.

The sunny conditions were favourable for the fruit category, with British strawberries, raspberries, blackberries, blueberries, plums and early-season apples in healthy supply, leading to lower prices month-on-month.

Wheat prices rose sharply amid concerns over disruption to Black Sea exports, while vegetable oil markets also faced pressure from high biodiesel demand and ongoing geopolitical uncertainty impacting global supply chains.

By contrast, international meat markets weakened for the first time this year, with a dip in pricing for poultry, pork and beef, though lamb prices remained at record levels.

Shaun Allen, chief executive of Prestige Purchasing, said: “July’s marginal 0.2% increase feels like the calm before a potential storm. With UK drought conditions actively threatening domestic vegetable yields, and global grain markets reacting to renewed geopolitical stress in the Black Sea, operators cannot afford to be complacent. The transition from summer to autumn will be a critical period for supply availability, making proactive, data-led procurement absolutely essential.”

Reuben Pullan, senior insight consultant at NIQ, added: “Broadly flat prices in July disguise significant volatility in the foodservice supply chain, and buyers face a very uncertain autumn and winter. While high temperatures can work to the advantage of many hospitality businesses in sales terms, extreme climate issues are likely to have seismic impacts on their operations in the years to come. Mitigating inflation is an urgent priority for venues seeking to retain guests and protect margins.”

Last week, The Caterer spoke to industry experts on the impact of the summer drought on menus, as well as restaurateurs on how they are conserving water in their kitchen gardens.