According to research by ING economists, a record number of European food manufacturers plan to raise the selling prices of groceries in the coming months in response to rising input costs.
While the impact of food inflation varies by region, product and consumer, rising costs and prices are likely to last longer, EMEA [Europe, the Middle East and Africa] head of food and agriculture at ING, said Kiran Sanchit.
Business surveys indicate selling price expectations from EU food makers are rising, ING said, including big producers such as Nestle, Unilever and Danone who all expect their bills to rise. inputs increase by 10 to 15% in 2022.
Along with rising packaging, energy and transport costs, food prices in particular remained around their all-time high in April, according to research by ING.
Sanchit noted that consumers might need to switch between products or prefer private labels over brands. He added:
“We could actually look at a fairer food price now compared to what we were used to, taking into account the scarcity of natural resources and the impact on the environment.”
ING economists explained that when the cost of food rises or falls, the quantities sold of grains, oils and fats react less to price changes than those of fruits, vegetables, meat and dairy products. .
Food inflation by region
Non-Western countries are hardest hit by food inflation, with prices up 60-70% in Turkey and Argentina in March this year, according to research by ING.
Food inflation and food availability, ING economists said, pose a particular threat to conflict zones and countries in the Middle East and sub-Saharan Africa.
Food price increases ranged from 2.5% in France and Ireland to over 10% in some Eastern European countries and the Baltics during the first quarter of 2022, ING said.
Food inflation in the US and Canada is relatively high compared to the EU average, with a US grocery price index of 10.8% in April. However, grocery spending represents a smaller share of total household spending, ING said.