This half-year review of Euromonitor International’s Cooking Ingredients and Meals data provides analysis of the biannual update to Euromonitor’s Forecast Model (FM), alongside the quarterly update to the Macro Model, offering insight into the most important developments since October 2021’s annual update. Inflationary pressures and the impact of Russia’s invasion of Ukraine are bearing down hard across many key markets, and retail sales values have increased significantly as a result.
This report comes in PPT.
Edible oils is the category that has been most affected by the price hike within cooking ingredients and meals. The war in Ukraine has created supply chain shortages for sunflower oil in many markets such as India. This has forced the search for alternatives, including soy, palm and rapeseed oil but these are also seeing disruptions, exacerbating the situation.
With consumers’ discretionary incomes reduced, sales of ready meals are set to slow down; in particular, categories like dinner mixes, which includes subscription meal kits, are expected to grow at a much slower pace than in the review period. This situation is expected to benefit more affordable meal solutions such as frozen ready meals and pizza.
Rising raw material costs and logistic fees are key reasons for the increase of prices in table sauces. Manufacturers like Kraft Heinz were forced to pass the price increases on to the consumer. In the case of sweet spreads, prices of honey are the most affected given a third of Europe’s honey imports were coming from Ukraine before the start of the war.
Inflation and raw material shortages have particularly impacted the availability of certain menu items and prices, causing narrowing revenue margins and the unsustainability of aggressive discounting strategies. Home-cooked food will likely return as a preferred choice, dampening foodservice’s potential return to growth in the aftermath of the pandemic era.
Major businesses have made several revisions in the first half of 2022 in an attempt to stagger price hikes. Long-term strategies include reviewing recipes to swap at-risk ingredients for substitutes, and streamlining portfolios to focus on products using similar ingredients in an effort to cut costs.
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