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CGA Prestige Foodservice Price Index (FPI)Sub Category Report - July 2017
Your source for accurate data, analysis and insights into today’s food prices.
2
To receive the full volumetric data, detailed category and subcategory performance and a more in-depth analysis, please [email protected] or [email protected] to purchase.
TheoverallFoodservicePriceIndexinflationfigureof8.8%isdownslightlyfromMay’shighpointof9.0%.ButitisstillmuchhigherthanConsumerPriceIndexinflation,revealinghowmuchmoreexposedfoodserviceistoinflationarypressures. Twonumbersareparticularlynoteworthythismonth.InflationintheFish categoryhasreachedahighof20.8%,whileSugarsistheonlydeflationarycategory,sittingat-5.1%inJune. ThedipforsugarandotherconfectionarycanbeattributedtofactorsincludinganincreaseinbothsugarcaneproductionandyieldsinBrazilandhealthierbeetsugarproductionacrosstheEU.Cocoaprices,havingalreadybeenlow,arepredictedtoremainsowhenthenextharvestbeginsinOctober.Butthiscategory’srelianceonimportsislikelytohurtpricesinthefuture,withrecentreportsontheprogressofBrexitnegotiationscoincidingwithafurtherweakeningoftheBritishpoundagainsttheEuro. Fishhasseensignificantpricerisesacrossthepastyear,andJune’sinflationfiguresitsat20.8%.Pricepressureisparticularlyacuteinsalmon,whichcontinuestosufferfromsealiceinbothNorwegianandScottishfarms.TheworseningexchangeratebetweenthepoundandNorwegiankronehasexacerbatedthesituation,andcommentatorssuggeststerlingwillonlyweakenratherthanstrengthenasBrexitnegotiationscontinue. Oil pricesalsocontinuetoinfluenceallfoodserviceproductstoagreaterorlesserdegree,dependingontheamountoftransportrequired.Whilepriceshavedroppedsincethebeginningof2016,onayear-on-yearbasisthedifferenceisnotgreat.
FoodservicePriceInflation(FPI)isat8.8%year-on-yearforJune2017
Foodservicepricesarehigheryear-on-yearinmostcategories,withthenotableexceptionofSugars,PreservesandConfectionary,wherepricesareactually5.1%lowerthanlastyear.TherateofinflationfortheFishcategoryisalsonoticeablyhigherthismonth,reachinga20.8%increaseoverJune2016.
AbouttheCGAPrestigeFoodservicePriceIndex(FPI)
Food & Non-Alcoholic Beverages - FPI vs CPI
Executive Summary
CGA-Prestige FPI Report - July 2017
+8.8%
333
FPICategoryReportJuly2017
Category
107.3
101.7
103.1
105.5
94.5
98.3
96.6
106.9
99.8
106.3
101.8
96.3
106.5
102.8
99.4
105.1
107.7
95.1
101.5
99.4
Jan 17Jun 16
98.2
104.3
106.3
106.0
99.3
103.4
105.7
110.2
101.4
100.0
101.7
97.0
99.0
101.3
99.2
103.9
106.4
102.3
101.0
99.1
Jul 16 Oct 16
103.4
102.1
107.5
107.6
98.5
101.5
101.2
98.9
101.0
103.4
100.9
96.9
106.9
101.8
97.7
105.0
107.0
103.0
102.0
97.8
Aug 16 Nov 16
104.0
102.1
102.3
107.4
99.8
101.3
101.6
106.2
104.3
103.6
Sep 16 Dec 16
104.9
104.3
101.5
109.4
95.1
97.7
97.7
107.0
101.8
103.0
Abrieflullbeforepricesincreaseagain
Sugarandcocoapricescurrentlylow,butcouldheadupsoon
OliveoilinpotentialcrisisastreediseasehitsSpain
Exchangerates,climbingoilpricesandfruitshortagesraisingprices
Milkfarmgatepricesstillnotenoughto
keepfarmersinsector
Supermarketmovestowards“BritishOnly”meathittingsupply
SevereshortfallsinEUharvestsconstraining
supply
Salmonandtunapricescontinuetopushhigher
Coffee,cocoaandteaallheadingupwards
MoreBritishgrowingseasons
starting,butexchangeratesstillaconcern
Foodservice Price Index June 2017 +8.8%
102.3 105.2 110.0 110.4 114.1
102.3 107.5 109.2 112.2 108.6
103.6 104.0 107.2 114.1 121.0
97.0 101.0 102.0 109.2 109.7
100.1 103.1 103.3 106.6 106.4
100.2 103.5 105.6 109.7 116.6
107.2 116.5 106.9 110.6 114.8
104.3 106.6 105.0 102.8 96.4
104.7 108.1 105.9 111.7 110.4
Feb 17 Mar 17 Apr 17 May17 Jun 17
106.6 108.4 106.4 110.6 111.3
CGA-Prestige FPI Report - July 2017
Pricesarestillclimbingformanycategories,withonlysugarsshowingnegativeinflationthismonth.Allindicationsarethatpriceswillcontinuetoincreaseintheshort-term,however.
Category Summary
All findings for June 2017 relative to June 2016
4
FPICategoryReportJuly2017
OurgraphbelowshowsFPIperformanceoverthepastyear,alongwitharollingone-yearforecast.Inflationsitsat8.8%thismonth,withourforecastnowreflectingaharderpositiononthesterlingexchangerategoingforward.
Historical Performance & Forecast
Jan 17
101.8101.3 106.0
Jun 16 Jun 17
101.8
Apr 17
101.4
Feb 17 Mar 17
109.2
Jul 16
102.8
May 17
102.2101.1 110.0
Aug 16 Sep 16 Oct 16 Nov 16
101.5
Dec 16
102.4 106.7
CGA-Prestige FPI Report - July 2017
Asobservedbefore,oilpriceshavebecomeunpredictable.WhilepriceshavegenerallybeentrendingupwardssincethemiddleofJune,that’snoindicatorofwhatitwilldointhefuture-indeed,acrossthesamelengthoftimebetweenMayandJune,pricestumbledby$10perbarrel. TheongoingBrexitnegotiations,especiallythoseelementsthatcentrearoundtherightsofEUcitizensintheUKgoingforward,continuetohaveaneffectonhowtheUKisperceivedasaplacetocomeandwork.Whilewehavealreadypointedouttheeffectontemporaryfarmworkersbefore,foodserviceingeneralhasastrongforeignlabourcomponent. Giventheseemingreluctanceofdomesticworkerstoapplyforsimilarroles(onerestaurantchaincommentedrecentlythatonlyoneinfiftyapplicantsforpositionswasBritish),labourcostsmaysoonneedtoriseinordertoensuremealsarebeingserved,whichwillinevitablypassthroughintofoodprices. Asnotedlastmonth,however,FruitandVegetablesarestillthecategoriestowatchwithregardstopriceincreasesduetoreducedlabouravailability.Whencombinedwiththeincreasedpressureoftheweakerpound(bothonforeignworkerwages,aswellasimportedproducts),thesecategoriescouldwellbeourbestwindowintowhatthefutureholdsforfoodprices.
101.1 101.4 101.8 101.5102.4
106.0
110.0
108.8
113.2
98.0
102.0
106.0
110.0
114.0
Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18
FPI Low Forecast High Forecast
5
Breadandcerealpricesareupby4.8%comparedtothistimelastyear.WhileunexpectedlywarmanddryweathercontinuestoaffectgrowthintheUK,globalfactorsalsoplaytheirpart,withUSwinterwheatdisappointing,whilefactorsatplayinRussian,UkraineandKazakhstanalsopushwheatpricesup.Butterpricesarealsoservingtopushthiscategoryup.
Bread & Cereals
Whiletheinflationfigureforthismonthmaybethelowestseenthisyear,itseemstobeverymuchthecalmbeforethestorm,astherearestillforcesatworkonglobalwheatproductionthatthreatentocutintosupplyandpushpricesup. Asreportedlastmonth,somedisappointingyieldsforhardredwinterwheatandgeneralpoorprojectionsforwheatproductioninEasternEurope,togetherwithfarmerslookingtoreducewheatplantingsinfavourofmoreprofitablecrops,haveservedtodentproduction.Theoverarchingissueforglobalwheat,however,continuestobetheweather.OngoingdroughtdamagetocropsintheUSandCanadahaveweighedmoreheavilyonproductionthere,withwheatfuturespricesgoinguptoreflectthis. TheUKhasalsoseenproductionhamperedbytheweather,whichhasseenusbecominganetimporterofwheatforthe2016/2017period,apositiontheUKhasonlyfounditselfinthreetimeinthelasttwodecades.Anincreaseinimportsalsomeansincreasedexposuretopoorexchangeratesthatsuchapositionbrings. Whileitmaytakeafewmonthsfortheseeffectstofilterthrough,theyeventuallymust,andwhentheydowecanexpectpricestoriseaccordingly.
FPISub-CategoryReportJuly2017
CurrentinflationFPI | 1.3% 12mthForecast | 1.0%
CGA-Prestige FPI Report - July 2017
97.897.1
98.597.9 97.6
98.5
99.8 98.0
99.9
100.3101.1
100.5 100.8
105.1
103.9
105.0
103.4
101.5 101.3
98.397.7
100.1
103.1103.3
106.6 106.4
96.0
100.0
104.0
108.0
Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 CPI FPI
6
AmbientHotBeveragesareup12.0%comparedtolastyear,andpricesareupcomparedtolastmonthtoo.Commoditypricesacrossallthreemajorareasinthiscategoriesareup,andthisisexacerbatedbyexchangerates.
Ambient Hot Beverages
Coffeemarketprices,havingfallenacrossthestartoftheyear,havebeguntoevenoutandarenowpickingup.Thisisconsistentwithmorerecentpredictionsthatcoffeefuturespricesaresettogoupacrossthenextfewyears,effectivelyapredictionofwherepriceswillhead.Thiswilllikelybedowntocontinueddemandclashingwithdesirestorebuildstockpilesthathavebecomedepleted. AfterhittingalowpointinMay,pricesforcocoahavebeguntocreepbackupwards.TradersinGhanaandIvoryCoastcocoahaveindicatedthatanincomingperiodofraininthesetwocountrieswillaffectthemidcropseason,buthavebeenunabletoagreeonwhatthismeans,splitbetweenwhetheritwillhaveapositiveornegativeeffect.Regardless,somearealreadypredictingthatthepricewillhaveincreasedbytheendof2017. Teapricesalsocontinuetogoup,withsuppliesofoneofthemostexpensiveteas,Darjeeling,disruptedbyunrestinrelevantgrowingregions,haltingpickingofthehighlyprizedsecond-flushoftea.Kenyanteahasalsoincreasedinpriceduetosupplyshortagescausedbyerraticcropping,makingithardtopredicthowmuchproductionwillbeachieved. Foralltheseindividualcommodities,however,bythetimetheproductsarriveintheUK,priceshavebeenaffectedbythelowvalueofthepound,meaningthatevenifcommoditypricesfall,theyarestillmoreexpensivetoimport.
CurrentinflationFPI | 12.0% 12mthForecast | 9.2%
CGA-Prestige FPI Report - July 2017
FPISub-CategoryReportJuly2017
100.5 100.2
101.4
100.3
98.5
100.198.8
100.3
104.5103.5
105.1103.8
105.4
101.8 101.7100.9
98.2
103.4104.0
107.3
104.9
102.3
105.2
110.8 110.4
114.1
96.0
101.0
106.0
111.0
116.0
Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17
CPI FPI
7
Fishpriceshaveincreasedsignificantly,now20.8%higherthanatthispointlastyear.ThecontinuedhardshipssufferedbytheScottishsalmonindustrycontribute,asdoongoingconcernovertunaandcodquotas.
Fish
Sightingsofhumpback(pink)salmonhavebeenreportedinScotlandandIreland.Whileanotherspeciesofsalmoncouldbearguedtobeapositiveinfluenceonriverswithexistingsalmonpopulations,thecompetitioncouldhaveanegativeimpactonnativeAtlanticsalmon,unwelcomenewswhenthesalmonindustryisalreadysufferingfromasealouseepidemicthattheyhavestruggledtocontain. Norwegiansalmonhasbeenmorestablebycomparison,havingcomedownslightlyinpriceacrossJune,butpriceshavebeguntocomebackupinJuly,andareanticipatedtocontinuedoingso. Tunapricesarealsosignificantlyinflatedcomparedtolastyear–asexplainedinpreviousreports,thereareseveralreasonsforthis,includingintroductionofsustainabilitymeasuresintoIndianOceanfishing.Thequotasystemwillnecessarilyconstraincatchesandthereforesupply. Whilecodpriceshavealsoelevatedonconcernsoversustainablefishing,therehasatleastbeensomegoodnewsonthisfront-NorthSeaCodhasbeenlabelledassustainablebytheMarineStewardshipCouncil,thefirsttimein20yearsithasheldthislabel.Notonlydoesthisaddapotentialsourceofcod,butthiswouldessentiallybedomestic,reducingtheadditionallayerofexchangeratesthatmightotherwisepushupprices.Itremainstobeseentowhatlevelthiscodcanbefished,butcouldbebeneficialtobuyersnotonlylookingtogetabetterpriceforcod,butbeapartofsustainablefishing,too.
CurrentinflationFPI | 20.8% 12mthForecast | 14.9%
CGA-Prestige FPI Report - July 2017
FPISub-CategoryReportJuly2017
95.898.4 98.1
96.8
99.6
99.3 99.9 100.2
104.8 104.8103.5
105.8
107.9
95.1
102.3 103.0
110.2
98.9
106.2 106.9 107.0 107.2
116.5
106.9
110.6
114.8
92.0
100.0
108.0
116.0
Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 CPI FPI
8
Fruitpriceinflationisnowat13.6%forJune,asthisimport-dependantcategorystruggleswiththeweakenedvalueofthepoundandtheeffectsofpoorweather.
Fruit
Asdetailedinourpreviousreport,theaftereffectsofpoorweathercontinuetoimpactthemostpopularfruithereintheUK. SeveralproducersoffruitacrosstheEUhavebeenforcedtocuttheirharvestforecastsconsiderably.Belgium,forexample,estimatedthatapplegrowerstherewillseetheirharvestscutbyupto70%,andwhilepearsaredoingbetter,theyarealsoanticipatedtobecutbyupto20%.Withsuchaseverecutinavailablefruit,itisfearedthattheworst-hitproducersmayabandonfruitgrowingaltogether.Germangrowthhasalsobeenaffectedacrossavarietyofproduce,withthedamageandestimatedimpactonharvestsgrowingmoreseverethefurthersouthandwestonegoes,whileItalyisalsoexpectingupto25%reductionsinharvests. LookingbeyondEurope,theUKisseeingproblemsinotherfruitsources,especiallythosethatsupplyuswithourcitrus–SouthAfricaandArgentinahavealsoseenproductionissuesthathascutintoavailablesupplies,whichiscompoundedbythefactthatthesecountriesalsosupplymarketsintheFarEastandMiddleEast,bothofwhicharepreparedtopayhigherpricesthanthoseinEuropeortheUK. Ontopoftheseconcernsandupwardpressuresonprice,asacategorythatleansheavilyonimportstheeffectsoftheweakerpoundisinescapable.TakingEuropeanimportsandtheEuroasanexample,comparedtoJune’16whentheexchangereachedaround€1.31/£1,attimeofwritingtheexchangerateisamuchlower€1.11/£1.Unlessthingsbegintoimprove,bothintermsofharvestyieldsandthevalueofthepound,wecanexpectpricestocontinuegoingup.
CurrentinflationFPI | 13.6% 12mthForecast | 13.0%
CGA-Prestige FPI Report - July 2017
FPISub-CategoryReportJuly2017
99.397.8
98.8
101.1102.3
105.6 105.6
101.2102.5 103.7
103.5 102.9 102.5
106.5
99.0
106.9 106.3107.5
102.3 103.1 101.5103.6 104.0
107.2
114.1
121.0
94.0
102.0
110.0
118.0
126.0
Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 CPI FPI
9
Meatpricesareup11.0%comparedtolastyear.Withtheexceptionofchicken,mostmajormeattypesareup,duetoincreaseddemandandreducedsupply,partlyduetonewcommitmentsfromsomesupermarketstohave“British-only”freshmeat.
Meat
Demandacrossseveraltypesofmeatislikelytoincrease,dueinparttofirstCo-OpandnowMorrison’smovingtosellingBritish-onlyfreshmeat,amoveintendedtocutbackonimportcosts. Standardpigpriceshavebeensteadilyincreasingsincethebeginningoftheyear,understandablewhenconsideringthatUKpigslaughteringsaredown,combinedwiththeaverageslaughterweightalsocomingdownforthefourthconsecutivemonth,reducingsupply Beefpricesremainhigh,withfarmersinbothBritainandNorthernIrelandseeingsteadydemand.SomeabbatoirsinIrelandhaveindicatedthattheywanttopullbeefpricesdown,thoughfarmershavebeenadvisedtostandfirmagainstanyattempttodevaluetheirproductwhendemandishealthy. Lambpricesarealsouphere,asfallingexportsfromNewZealandaddadditionalpressuretosupplieshereandinEurope,asexportslooktotakeadvantageofthelull-thelowvalueofthepoundinparticularmakesourlambmoreattractivetoimportersintheEUandelsewhere.Thismeanslambissubjecttoadditionaldemandbothathomeandabroad,whichcannothelpbutputupprices.
CurrentinflationFPI | 11.0% 12mthForecast | 7.9%
CGA-Prestige FPI Report - July 2017
FPISub-CategoryReportJuly2017
96.395.0 95.4 95.3 94.8 95.0
95.9 96.2 96.6 96.797.5 97.2 97.6
99.4 99.197.8
100.0
103.4 103.6
106.3
103.0
104.7
108.1
105.9
111.7110.4
92.0
98.0
104.0
110.0
Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 CPI FPI
10
Pricesinthiscategoryare10.4%higherthanatthistimelastyear,acombinationofreducedsupply,increaseddemandbothhereandabroadforprocessedgoodssuchasbutter,creamandcheeseandsteadilyincreasingfarmgatepricesformilk.
Aspredictedinlastmonth’sreport,followingafarmgatepriceriseformilkof1.65pplfromArla,otherprocessorsarenowfollowingsuit,withMullerhavingannouncedanincreaseof1.5pplwitheffectfrom1stAugust.Whilethismeansthatpricesformilkanddairyproductswillinevitablyincrease,priceshavenotyetreachedapointtostoptheexodusoffarmersfromdairyfarming. Fromthis,onecanseewherethegrowingconcernaboutavailabilityofbutterandcreamaroundChristmastimehassprungfrom–thenumberofsourcesformilkhasalreadydwindledenoughthatsupplyhasstartedtobecomeconstrained,andthiscanonlycontinueuntilfarmersbegintoseeaprofitfromdairyfarming.Untilthen,weshouldexpectsuppliestoshrink,andpricestogrow. Theoneareainwhichpricesmaymovedifferentlyischeese,andeventhenprimarilyforexportsandimports–whilethepoundisweakened,domesticcheeseismorefavourablypricedforoverseasbuyers,butimportedcheesepricesarehigher.
CurrentinflationFPI | 10.4% 12mthForecast | 8.0%
CGA-Prestige FPI Report - July 2017
FPISub-CategoryReportJuly2017
95.596.9
96.7
95.8 95.7 96.096.5
96.0
96.6
98.297.4
98.2 98.299.4 99.2
97.7
99.398.5
99.8
94.595.1
97.0
101.0102.0
109.2109.7
92.0
98.0
104.0
110.0
Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17
CPI FPI
11
Pricesare8.3%highercomparedtolastyearforthiscategory,withimportcostsand,toalesserextent,increasedfruitpricescontributing.
Mineral Waters, Soft Drinks & Juices
Juicesinparticularwillseepricesgoupintheshorttomediumterm,duetoissueswithsuppliesinbothcitrusandotherfruits,includingthereducedharvestexpectationsforapplesacrossEUgrowers.Sugarsposelessofaproblem,thoughitmaytakesomemonthsforthebenefitsofincreasedharvestsofcaneandbeetsugarstobefeltinthesector. OilpricesfellacrossthemajorityofJune,reducingthefuelcostsforshippingaswellaspackagingcostsforthoseproductsthatcomeinplasticbottles.WhileoilpriceshavebeenerraticsinceMarchofthisyear,pricesarenowbeginningtomovebackupagain,soweshouldnotexpectanypricereductionsheretohaveanyprolongedeffect. Forthoseelementsthatareimported,theweakerpoundonceagaincomesintoplay–takingtheEuroasanexample,June’16’sexchangerateofaround€1.31/£1,whencomparedtothecurrentrateofaround€1.11/£1,showsthatimportcostswillhaveincreasedsignificantly. Wearealsolikelytoseemarketingeffortsbythemajorplayersinthesectorincrease,especiallyafternewsthatinAmericain2016,bottledwaterovertookcarbonatedsoftdrinks.Thisisnotapositionthatthebigsoftdrinkcompanieswilltakelyingdown,especiallywhenthereareotherconcernsforthemtodealwith,suchastheimpendingsugartaxinApril2018.
CurrentinflationFPI | 8.3% 12mthForecast | 6.6%
CGA-Prestige FPI Report - July 2017
FPISub-CategoryReportJuly2017
98.997.2
95.5
98.3
94.6 94.2
95.597.3
96.895.4 95.7
96.6 96.9
107.7106.4 107.0
105.7
101.2 101.6
96.697.7
102.3
107.5109.2
112.2
116.6
90.0
96.0
102.0
108.0
114.0
Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17
CPI FPI
12
InflationforOils&Fatsisat12.8%thismonth,asoliveoilcontinuestobebothinshortsupplyandunderseriousthreatfromdisease,andallimportedoilssufferfromtheweakervalueofGBP.
Oils & Fats
OliveOilprices,alreadypushedupbyshortsupplyandtreediseaseinseveralkeygrowingareas,arenowfacingthethreatoffurthershortages–theincurabletree-killingbacteria(Xylellafastidiosa)thathascutintosupplieselsewherehasnowfounditswaytoSpain,fromwhichmorethanhalftheworld’soliveoiloriginates.Ifmeasuresarenottakentocontainandcontrolthedisease,orelseformulateacure,shortagescouldbecomemuchmoresevereinthemediumtolongterm. PalmOilpriceshave,onaverage,heldinplaceacrossthepastfewmonths,butthetensionaroundtheoilasoneoftheimportantdriversofdeforestationcontinues.HSBChasrecentlytriggeredaninvestigationintopalmoil-relateddeforestationinPapua,involvinganoutsideinvestigatorybody. Coconutoilcontinuestobecomemoreandmorepopular,butashasbeendiscussedinthepast,thisisaproductthenatureofwhichmeansthereisanessentialconflict,asonemustchooseifcoconutswillberaisedfortheiroilorwater,astheycanonlyproduceoneortheother. Allsuchoilsare,ofcourse,imported,andthereforepricesaretiedtothevalueofthepound–asdetailedelsewhere,ongoingBrexitnegotiationscouldseethatvaluefallfurther.
CurrentinflationFPI | 12.8% 12mthForecast | 6.8%
CGA-Prestige FPI Report - July 2017
FPISub-CategoryReportJuly2017
99.698.2
101.7
99.598.5
97.1
102.1
102.7103.4
106.2
99.3
102.5
104.8
96.397.0 96.9
104.3
102.1 102.1 101.7
104.3
100.2
103.5
105.6
109.7108.6
94.0
100.0
106.0
112.0
Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 CPI FPI
13
Unlikeanyothercategorythismonth,pricesforsugarsandchocolatehavedecreasedby5.1%comparedtolastyear,asfallingpricesforsugarandcompetitivecocoapricesmanagetonegatetheeffectofworsenedexchangerates.
Sugar, Jam, Syrups, Chocolate & Confectionary
Brazilcontinuestoenjoybetterandmoreproductivesugarcaneharvests.SugarbeetfarmersintheUKhavenowbeenofferedcontracttermsbyBritishSugar,whichcoupledwiththeremovalofcapsonbeetsugarproductionshouldseepricescomedownfurtherinthemediumterm. Cocoapricesarestilllow,andwhiletheviewfromthefuturesmarketisforagradualmoveupwards,anabundanceofsupplyisstillexpected,whichwillstealawayanyupwardsmomentum.Heavyrainhasaffectedtheexistingcrop,andyetisalsolayingthegroundworkforthenextcrop,betweenOctoberandMarch,tobehealthy,solongasitisbackedupbyadequatesun. Onceagain,exchangeratesfactorin,butinthisinstancethelowervalueofthepound(andthereforethehighercostofimporting)hasbeenoutweighedbythereductionsinpriceseeninthemainingredientsforthiscategory.
FPISub-CategoryReportJuly2017
CurrentinflationFPI | -5.1% 12mthForecast | -2.4%
CGA-Prestige FPI Report - July 2017
97.6 97.8
99.9
97.0
98.0
96.6 96.6
101.4
98.2 98.6
99.9
101.4
98.7
101.5101.0
102.0101.4 101.0
104.3
99.8
101.8
104.3
106.6
105.0
102.8
96.4
94.0
98.0
102.0
106.0
Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17
CPI FPI
14
Vegetablepricesare8.2%highercomparedtolastyear,thoughweshouldexpecttoseethiseaseasmoreUKgrowersstarttheirharvests.Exchangerates,whilenotassignificantforvegetablesasfruit,arestillservingtokeeppriceshigher,andthediminishinginterestintheUKasaworkdestinationforforeignlabourcouldexacerbatethismoreandmoreastimegoeson.
Vegetables (including Potatoes)
IndustrybodyAHDBPotatoeshaswarnedfarmersthatthereislikelytobeasurgeinsupplylaterthisyear,duetoanincreaseintheareaplanted.NorthernIrelandhasalreadyseengoodweatherpushforwardharvestingbytwoweeks,andonceagaingrowingareahasrisen. TheBritishcarrotseasonhasnowstarted-sofaryieldsandqualityappeargoodandpointtoagoodseasonahead.TheUKisfairlyself-sufficientwhenitcomestocarrots,andwhilethedryweatherhasbeenafactor,duetowhentheseasonstartscarrotshavebenefittedfrommorerecentwetterweather,withirrigationavailabletomakeupanyshortfallintherain. Pricesforbrassicasuchasbroccoliandcauliflower,meanwhile,brieflyincreasedinLondonmarketsfollowingthehotspellinearlysummer. Whilethevegetablesectorhasastrongerdomesticelementthanfruit(whichlessenstheeffectofexchangerates)asmentionedinlastmonth’sreporttheBrexitnegotiationsarealsoaffectinghowthecountryisperceivedbyforeignworkers.Whiletheweakerpoundmakeswagesherelessattractive,sotheincreasinglynegativesentimentaroundtheUK’sperceivedattitudestoforeignworkersmakesjobsintheproducesector,whichtraditionallyreliesontemporary,migrantlabour,ahardersell.
FPISub-CategoryReportJuly2017
CurrentinflationFPI | 8.2% 12mthForecast | 6.9%
CGA-Prestige FPI Report - July 2017
94.795.9
94.895.9
94.1 94.495.2
96.3
98.5 98.7 98.897.7
96.8
102.8101.3 101.8
106.0
107.6 107.4
105.5
109.4
106.6
108.4
106.4
110.6111.3
92.0
98.0
104.0
110.0
Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 CPI FPI
PleasecontactCGAStrategyforquestionsrelatingtoresearchandcontent:CGA StrategyT: 0161 476 8330E: [email protected]
CGAaretheworld’sleadingbusinessintelligenceandstrategicconsultancyproviderforthe‘outofhome’leisuremarket;thedefinitivesourceofintegratedconsumerinsightandmarketmeasurementinformingstrategiesforourclients’growth.Welive,love,breatheourindustry:
harnessingourpassionandknowledgetohelpthemarketmakesmarterandmoreinformeddecisions.CGAworkcloselywithconsumers,retailers,suppliers,tradebodiesandgovernment,sothatourexpertconsultantscanbringeverystrategicinsighttolife.
Prestige PurchasingarealeadingexpertinValueChain.Weprovideknowledge,insight,andpracticalsupporttohospitalityandfoodservicebusinesses.Weimproveprofitabilitybyimprovingthewayinwhichourclientssourceandmanagewhattheysell. Ourservicesaretailoredtoallowustoassistbusinessesofanyscaleinthesector.Offeringabespokeconsultancybasedmodelweofferservicescontextualisedinthestatementsbelowforourclients. Supply OptimisationForgrowingbusinessesthathavenotyetestablishedamaturesupplychainfunctionweprovideoutsourcedservicesthatdeliverprofitimprovementthroughtheapplicationofbestinclasstechniques,usingourteamofexperiencedandcapablebuyers.
Procurement TransformationForestablishedbusinessesthathaveyettoestablish“strategicprocurement”andwishtointroducenational,regionalorglobalsupplyarrangements,oftenestablishingtheirownteamtodevelopandmaintainthem. Procurement Support ServicesAportfolioofservicestosupportfullyestablishedprocurementandsupplychainteamsintheirmissiontoaddvaluetotheirorganisation.ServicesincludeInsight,Training,AnalyticsandBenchmarking. Our services are 100% Transparent FIXED fee based and deliver between 2 and 7 times return on investment all backed up with financial guarantees. We do not aggregate volume with other operators and build each project or service bespoke for each of our clients’ needs delivering the maximum benefit to our clients bottom line.
ThecopyrightinthisdocumentationisownedbyPrestigePurchasingLtdandCGAStrategy.Youarenotauthorisedtodistributethecontents,oranypartofthecontentsineitherelectronicorpaperformwithoutexpresswrittenpermissionfrombothparties.
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MichaelLukeCommercial Director [email protected]
GraemeLoudonCommercial Director [email protected]
ShaunAllenChief Executive [email protected]
FionaSpeakmanClient [email protected]