Experts warn of food prices returning to 2% inflation in 2015, after a year of falling prices

A PROCUREMENT specialist for the food service industry is predicting that food inflation will increase to 2.03 per cent next year. This follows a year in which food and drink went into annualised deflation for the first time in 14 years.

Foodservice Footprint Straw-Bales-300x293 Experts warn of food prices returning to 2% inflation in 2015, after a year of falling prices Foodservice News and Information Out of Home sector news  prestige Purchasing Food inflation















Prestige Purchasing has warned the foodservice industry that food prices are set to rise again next year as food inflation is forecast to hit 2.03%. This follows a year in which food inflation fell to -1.5%, the first time in 14 years that food inflation has reversed its trend.


The fall in food inflation was due to consistent good weather; a significant drop in the price of crude oil and ranging economic factors, including the strengthening of the Pound against the Euro.


However, longer term factors including global population growth, water scarcity and an unstable international political environment will mean that this trend reversal is expected to be short term as Prestige Purchasing forecasts food inflation to return next year.


However, it’s not all bad news. Different categories will rise and fall at different rates.


  • Milk- as well as milk powder, butter and whey powder have dropped in price and are expected to stay low; this is due to a combination of increased production, coupled with a reduction in demand
  • Chocolate- Cocoa consumption is growing faster than production. Attempts to avoid higher costs could result in manufacturers using alternatives such as vegetable oil and flavourings to reduce the demand for cocoa. Prices have also been impacted by the threat of the Ebola virus hitting cocoa-producing countries, Ghana and the Ivory Coast
  • Beer- The House of Commons recently voted against the Pub Beer Tie, which currently allows large pub companies to tie their tenants into deals where they are forced to buy beer from their landlord. If passed, this would allow pub tenants to agree deals with their landlords that allow them to buy beer on the open market leading to price volatility
  • Chicken- a new bird flu strain has recently been found in the UK. If it spreads, this will pose a significant risk to the poultry sector. The effects of this on pricing can counteract one another to some degree. On one hand, supply is reduced, as there are physically less birds, leading to higher costs. However, extensive media coverage can increase the level of fear among consumers, meaning that demand could drop


In order to help consumers minimise the impact of food inflation, Prestige Purchasing has created the following tips for families to eat on a budget


  • Buy more frozen goods in the weekly shop – families should consider whether it would be more economical to pick up fresh produce two or three times a week or consider switching some ingredients from fresh to frozen
  • Keep things simple –A well-thought out and easy-to-cook dish, using fewer ingredients can taste just as good as more elaborate dishes
  • Use different cuts of meat – by using cheaper cuts of meat such as chicken thighs instead of breasts or preparing dishes with more mixed ingredients, such as meat stews with pulses, root vegetables and dumplings
  • Know the true shelf life of your food – many people are unaware that it is safe to eat food after the best before, or to freeze food up to the use by date. This could help reduce waste in the long term