The grocery supply chain faces significant challenges in 2024, affecting large segments of the industry.
- Citrus greening disease has devastated orange crops in key producing regions, leading to significant price hikes in orange juice.
- The spread of bird flu across Europe and North America has resulted in soaring egg prices and industry disruptions.
- Adverse weather conditions in the UK threaten grain harvests, increasing costs for staple products like bread.
- Global sugar prices have risen sharply due to extreme weather, impacting confectionery prices.
The grocery sector is navigating a tumultuous landscape in 2024, grappling with a variety of disruptions. Citrus greening disease has extensively harmed orange production in Florida and Brazil, major global suppliers. This has resulted in orange prices more than doubling, reaching heights of £4,800 per tonne. The disease, compounded by extreme weather, has triggered a crisis in global orange juice production, affecting prices and availability for consumers worldwide. Innocent’s chief executive, Nick Canney, highlighted the necessity of adapting to these changes, indicating that promotions, pack sizes, or pricing must evolve in response to current pressures. Naked Juice has also reported significant profit declines due to these challenges.
Bird flu outbreaks have continued to exert pressure on the egg sector globally. The virus’s spread has led to the culling of nearly 33 million commercial laying hens in the US alone, causing egg prices to rise by 16% since 2019. This epidemic not only affects consumer prices but also puts the livelihoods of farmers at risk, with some forced to leave the industry entirely.
The UK is experiencing challenging weather conditions that threaten its grain harvests, with estimates suggesting a possible reduction by a fifth. Analysis indicates that key crops, including wheat and barley, might drop by four million tonnes compared to the previous year. This decline could lead to price hikes in everyday products such as bread and beer. Alongside this, disruptions have already led to changes in packaging sizes for potatoes, impacting consumer costs.
Extreme weather continues to affect agricultural outputs worldwide, notably influencing sugar production. Adverse conditions in India and Thailand have contributed to significant increases in sugar prices. Experts warn that without addressing the climate crisis, these issues may persist, further impacting global food prices. The confectionery industry, including major producers of chocolate and sweets, is adjusting prices due to these escalating production costs.
The grocery sector must navigate these complex challenges to sustain supply chains and stabilize consumer prices amidst ongoing global disruptions.
