How hospitality business is affected by future food prices

What does the recent extreme weather mean for your future food prices

The summer heatwave feels like a distant memory already, as Britain returns to temperatures that we’re more accustomed to (rainy bank holiday weekend anybody?) as we enjoy the end of our summer season.

Whilst we were basking in (or hiding from) the long hot days that saw 30 degrees become the new norm, sinking record amounts of cold beers and enjoying endless barbecues, the weather has been adversely affecting our producers around the globe. Inevitably we will now see the knock-on effect for High Street and for ourselves in the hospitality sector, where margins have already been pushed to their limits this year.

It is widely recognised that the global food system is under increasing strain, as reported by many experts in relation to the Global Food Security programme. In the US between 2007-11 there were more than 4 times more damage causing events than in 1980-85, equating to over $1 billion of damage. With global temperatures hitting record highs in 2018, combined with record low temperatures and flooding too, the cost to our global bread basket is expected to be higher again.

We’re encouraged to see multilateral efforts to make key market data available (eg food stock levels) to help governments anticipate and react accordingly to future events. But what does is mean for us, right here, right now.

Just this week, The Guardian reported that we should expect an overall price increase of at least 5% in relation to our shopping baskets. The Beast from the East and the aforementioned heatwave has seen some staples increase by as much as 80% (carrots) which will have caught out some of us in the hospitality sector if we are still relying on supplier statements before we pay for our goods delivered.

We can’t do much about the weather, but it is our responsibility to look after our businesses cash flows, whilst providing fantastic experiences for our diners. Don’t let the current and future price increases harm your own vision for growth. We’re enabling operations like yours to manage the threat of price increases with our live, hospitality e-procurement platform that puts our clients in control of requests for price change. This means no surprises when reconciling invoices for payment. The agreed price today is the same price that appears on the delivery note and the invoice too.

Contact us. We can help your business to grow in this uncertain climate.

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