Spring 2017 Market Forecast

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Staying on top of rising prices

Screen Shot 2017-03-02 at 14.04.27Troubles rarely travel alone, they say, and when it comes to rising food and drink prices, a number of factors are combining to cause significant challenges for the foodservice industry in the months ahead.

The fall in the value of sterling against both the dollar and the euro since the Brexit vote last summer remains a key challenge. The Bank of England is forecasting that inflation will reach 2.7% during 2017, and some commentators are suggesting the rate will peak higher than that.

At the same time, other factors are compounding the problem when it comes to specific product categories. In the first two months of 2017, the national media reported that supermarkets were rationing produce such as iceberg lettuce and broccoli due to the extreme weather in southern Europe. Other headlines reported the effect on cod and haddock supplies of industrial action by the Icelandic trawler fleet – now fortunately resolved; and a sharp increase in wine prices as a result of higher import costs.

Alongside rising food costs, issues such as the business rates revaluation and higher staff costs driven by the Living Wage, are all making the prospects seem daunting. However, the reality for operators is that whatever the challenges, they still have a business to run.

As we move into spring, more British produce will become available, and for caterers able to work in partnership with suppliers to offer produce when availability, price and quality are at their best, there will be opportunities.

Alongside our partnerships with leading food and drink suppliers, Lynx offers customer access to a range of specialist business support.

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meat

Meat

In general, caterers will need to budget for continued price increases, with British meat in greater demand as the costof imports also rises. However, there are opportunities where the popularity of different cuts varies. For example, demand for beef fillets and ribeye is currently strong, whilst sirloinis better value.

Global demand for pork is very high, and prices are significantly higher year-on-year affecting products such as bacon and sausages.

In a volatile market for meat, caterers should talk to their suppliers regularly to get the
best prices and quality.

Spotlight British meat on menus and look at low and slow beef cuts to reflect the best market value.

Vegetables and salads

Vegetables and Salads

The impact of wet weather and freezing temperatures across Spain, and much of southern Europe, has been widely reported, and supplies of lettuce and broccoli will remain under pressure until UK crops are harvested. Tomatoes, peppers and especially courgettes will also be challenging until the Dutch and UK seasons start, all from May.

In contrast, there is good quality and availability for UK-grown brassicas including Savoy cabbage, white cabbage, red cabbage, cauliflower, spring greens and curly kale, as well as British carrots, parsnips, swede, turnips and beetroot.

Offer ‘seasonal vegetables’ on the menu and buy according to price and quality.

Fruit

Fruit

We continue to see significant pressure on avocado market prices as demand outstrips availability.

Closer to home, the rhubarb season has started and prices will improve as the season develops.

The majority of citrus crops, including oranges and lemons, will continue to be sourced from Spain over the next few months, with the weather having had much less impact on fruit crops. However, there are some interesting alternative citrus varieties around; look out for yuzu and finger limes.

Premiumise cocktails and desserts using citrus varieties such as blood orange, Italian bergamots, Japanese yuzu and Australian finger limes.

Wine

Beverages

Leading UK tea suppliers have announced price rises, reporting that they are paying between 10 and 15% more on the international tea market. Coffee importers are also paying more due to the weaker pound, pushing up prices to caterers.

A premium hot drinks menu can add a much-needed margin to tea and coffee.

The UK is one of the world’s biggest wine importers and many suppliers have already raised their prices or are planning increases when supply agreements come up for renewal. The lower pound means operators will need to factor in an increase of around 10% in wine prices, although regular wine list updates will help.

Look for wine from the countries with the best crop – Australia had a good grape harvest in 2016, so will have plenty of good quality wine to sell.

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Fish dish

Fish

With salmon, the challenges of both higher prices and smaller fish are expected to continue until later this year, with the market very volatile from week-to-week. This has a knock-on impact on frozen and smoked salmon, where prices follow the fresh market.

Although cod and haddock supplies should return to seasonal norms, operators will be well-advised to plan their menus around the availability of a wide range of species. British caught flatfish including brill, dabs, Dover sole and megrim, along with imports such as tuna, swordfish, red snapper and red mullet should all offer good value and quality this spring. Native lobsters and crabs will also be in good supply as spring progresses.

Use specials boards and ‘catch-of-the-day’ menu descriptions to make the most of changing availability.

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Ambient

With global commodities traded in dollars, the fall in sterling has had a significant increase on the cost of many catering essentials, such as sugar and flour.

The higher cost of fuel also has an impact, with increased distribution costs a significant element in the price of many goods.

Cooking oil prices are high, although rapeseed and soya should now have peaked. Market prices for olive oil continue to be affected by the fallout from the Spanish weather, resulting in higher prices for the foreseable future.

Comparing prices amongst suppliers can mean better prices on many commodity products.

Cheese

Dairy

Global demand for dairy produce is high, and with many UK farmers having exited the market in recent years, reliance on imports is higher.

Caterers have already seen price hikes for butter, cream and cheese from suppliers, and costs are expected to remain high.

Spotlight dairy products where they add real value for customers, and use alternatives in cooking where possible.

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Meet the Team – Rachel Dobson

Rachel DobsonJob: Managing director, Lynx Purchasing.

Role: To get the best deals from suppliers.

Expertise: A purchasing specialist with lots of operational experience who understands customers’ concerns and needs.

Biggest challenge for 2017: Inflation hitting every sector and how to tackle it.

Best moment: Being asked – and then quoted by – the Financial Times newspaper for Lynx’s insights into the salmon market and why prices will remain high for the foreseeable future. Nice to have our expertise recognised and respected.

Hobbies/Ambition: My ambition is to set a benchmark for purchasing companies in the UK. To become the most respected company in our field in hospitality and catering. Our open way of doing business sets us apart and our customers are delighted by our unique approach to purchasing.

My tip: Having been in a low or no inflationary cycle for several years, there are many young managers and chefs out there who have never had to face a budget that shrinks each month. And plenty of older hands who have forgotten what that’s like too. My recommendation is come and talk to me and the team – we’ve got a wealth of experience, tips, strategies and ideas to help you stretch budgets and keep quality and service levels competitive as well as new buying strategies to get better value.

Email: rachel@lynxpurchasing.co.uk

Learn more about the team behind Lynx Purchasing.

Spotlight on… Lynx growing supplier base

Lynx can help you buy better in over 30 product and service categories – saving your business money every day in more ways than you imagine. As well as meat, fish, fresh produce, ambient and frozen goods along with a wide range of wine, spirits and soft drinks, we have been busy building our network of trusted suppliers in a range of non-food sectors.

For better day-to-day cost control, we can help you source and buy utilities and professional services in HR, training, business rates, waste management, pest control, telecoms and merchant card services.

If you are a start-up business or considering a major refurbishment, talk to us when you start planning your move and before you start buying. We’ve helped hotels, bars, restaurants and care homes equip rooms, kitchens, bars, dining and serving areas from scratch. Call us on the number below and see how we can save your business money every day.

Save your business money every day. Call Lynx Purchasing on 01325 377845.

Lynx Purchasing saving money and increasing profits for hotels and restaurants

Why Choose Lynx Purchasing

Lynx Purchasing works with hotels and independent hotel groups helping owners, hotel managers, purchasing managers, food and beverage managers and chefs maintain competitive pricing when up against the economies of scale and massive buying power of the big groups.

Our product and service categories range from fresh food and beverages to guest amenities, linens and utilities. We can help you find all of the suppliers you need – at the right quality and the right price for your hotel. And the more you buy through us, the more savings your business can make.

What our hotel customers say…

“Lynx Purchasing has made substantial savings for many members around the country. And they are amongst the most demanding of hoteliers where quality is concerned. – Peter Hancock, chief executive, The Pride of Britain Hotels

‘Having Lynx Purchasing fighting our corner instead of having to do it myself means that I can spend less time on managing prices and more time on other aspects of running The Bridge. – Philip Roberts, owner, The Bridge Hotel and Spa