TUCO explains why your Christmas dinner may cost more this year

Sarah Green

Sarah Green

Other 11th December 2019

TUCO explains why your Christmas dinner may cost more this year

The latest TUCO market intelligence report from the UK food and drink industry looks at inflation, Brexit, supply chain and the weather to explain why your Christmas dinner might cost more this year

Mike Haslin, CEO, The University Caterers Organisation (TUCO), said: “Our latest Q4 food and drinks intelligence report which is a roundup of industry research, highlights a difficult year for the turkey industry, but with demand still high we expect to see the industry recover well in the coming months and years. With excellent weather making potato and carrot production exceed all expectations it really is the year of the root vegetable.”

Suppliers have also been affected by distribution costs that have risen off the back of crude oil inflation, and diesel has risen more than 15% over the last two years.

Turkey – Fresh turkey is in high demand but could cost more this year
Last year was a difficult year for the Turkey industry, with Bernard Matthews losing more than £15million and many of the European producers also posting heavy loses. Many of the larger producers transferred their turkey sheds into chicken production because the growing cycle of turkey production takes six months, the implications of these production changes have started to impact the market. The hot summer in the UK and Europe this year has also had an effect and caused a reduction in supply of turkeys.
UK and Europe are producing 20% less turkey than this time last year. Demand for poultry and particularly turkey has increased. Restrictions on turkey imports from South America has had an impact on demand for fresh turkey. The reduced supply of livestock has pushed up live bird prices by more than 18% in the last couple of months. (Source: Birtwistles Market Report October 2019).

Glazed pork and pigs in blankets – maybe just a couple per person this year
African Swine Fever has dominated the deadlines over the past year. Prices were running at 3.5% above 2018 levels at the end of August 2019. China represents 46% of the global pork consumption. The 21% increase in exports of pork was mainly due to a surge in demand from China due to the severe pork shortages. (Source: Birtwistles Market Report October 2019).

Potatoes – Pile them high! The weather has been ideal for growing the perfect potato
2019/20 should be a good year for potatoes. Growing conditions have been much better, allowing for planting on time. A cold Spring saw slow growth, but a good combination of sunshine and rain have provided ideal growing conditions since.
Growers have experienced increased seed costs which are up 10% on last season. Input costs such as fertiliser, fuel and land rent has also increased which has resulted in higher raw material costs. In addition, packaging prices, especially paper have gone up by 10% in the last 12 months effecting both paper sacks and cardboard boxes of potatoes. (Source: Fresh Direct Market Review Autumn & Winter 2019).

Carrots – perfect growing conditions has created a bumper crop
The UK is usually 97% self-sufficient in carrot production in a good year and the signs are positive for the winter season. Planting was four weeks earlier than usual as conditions were good with early season crop showing good sizing and yield per acre. (Source: Fresh Direct Market Review Autumn & Winter 2019).

Serve up your roast with a non-alcoholic tipple to be on-trend this Christmas
Our report presented Bidfood Unity Wines research which has found that a third of 18 to 24-year-olds don’t drink at all and 50% of adults are now moderating their alcohol intake, so a low-alcohol option or non-alcoholic option should be made available to your guests this Christmas.
This has led to a huge drive towards new product development, with suppliers increasing the amount of low and no-ABV products in their portfolios. According to TUCO’s Food & Beverage Trends Report 2019, consumers want to see ingredients included in their food and drinks that have inherent health benefits, for example Kombucha in a cocktail. But they are also more likely to want textured drinks, veggie drinks and drinks with bubbles.
Coffee and after-dinner mints

The world’s coffee market is another sector taking a hit with farmers earning far less than they need to break even, therefore forcing them away from their crops. The average citizen, reports Wax Digital, drinks 676 cups of coffee and spends a total of £303 on coffee each year. With this figure set to rise by a further 2% annually, and more farmers turning to alternative jobs that pay better, this could lead to a lack of supply.

Inflation adds to concerns as the UK rate drops to its lowest level for three years. According to the Office for National Statistics measure of inflation, the Consumer Price Index (CPI) was 1.5% in October, down from 1.7% the previous month. The pound has improved month on month as a no-deal Brexit likelihood has reduced slightly however it still remains weak versus historical positions. Future Sterling performance remains strongly linked to the political situation in the UK.

TUCO, which strives to deliver real value for its members, will continue to keep its members and industry up to speed with the latest market data and trends through its regular insight reports and on its website: www.tuco.ac.uk.

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