Food inflation: 7 ingredients about to get more expensive in 2024

From your favourite fish and chips to your Sunday roast, brace yourself for sticker shock at the grocery store. Here's what's getting pricier in 2024 and why.

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For shoppers and diners in the UK, rising food costs are a constant concern. And though the worst of the inflation of the past two years is behind us, some key ingredients in our shopping trolleys look set for further unwelcome price rises.

This means more pain for consumer budgets, but it’s bad news for UK businesses, too. The cost of goods sold (COGS) – that is, the cost of ingredients, materials, and labour used to produce your products – is a major factor in profitability. But the past few years have been plagued by high overheads for businesses; particularly in the hospitality and food and drink sectors. 

This means profit margins are tighter than ever, and businesses are having to contend with a bite point at which price rises can no longer be passed on to customers still willing to pay.

From oozing cheese to a soothing cuppa, we take a look at the everyday ingredients set for price shocks in 2024. Chocolate lovers might want to look away now…

1. Bread 🍞

The record-breaking rain in the UK this year drastically reduced wheat production, leading to a reliance on imports for wheat in the coming year and possibly beyond. 

The Agriculture and Horticulture Development Board (AHDB) predicts wheat production to fall from 14 million tonnes to around 10 million tonnes or less. This will force UK wheat processors, flour millers, and bakers to import more wheat for bread production.

On top of these problems with UK wheat production, the ongoing conflict in Ukraine has sent shockwaves through the global food markets, with wheat prices experiencing significant surges. This is due to Ukraine’s critical role as a major exporter of wheat.

Fighting has directly impacted agricultural production in Ukraine, a country known as the breadbasket of Europe. Farmlands have laid fallow during the conflict, with crops unharvested, and essential resources like fertiliser are in short supply. Additionally, damaged infrastructure, including ports and transportation networks, hinders the export of even the grains that have been harvested.

The initial shock of the Russian attack sent wheat prices soaring, with a knock-on effect for wheat-based staples like bread and pasta. Cooking oils, another major Ukrainian export, have also seen price increases due to disruptions in sunflower oil production.

While global wheat prices have come down from their initial spike in early 2022 when the conflict began, they still remain higher than pre-war levels. Meanwhile, the UK’s recent patterns of flooding have only made things worse for the domestic wheat market.

2. Tea ☕

Hold onto your mug – this staple of British wellbeing is expected to rise in price this year. 

Tea is largely produced in Asia and East Africa, with China, India, Sri Lanka, and Kenya producing around three-quarters of tea globally. Currently, rising fuel costs and other disruptions in these key shipping routes are causing delays and driving up costs for tea bags and loose tea leaves. 

Climate change is also playing its part when it comes to longer-term impact on tea production in some regions, leading to smaller harvests and potentially even lower-quality crops. For instance, in India’s Darjeeling region, rising temperatures and unpredictable rainfall patterns have contributed to a decline in tea yields and a shift in the flavour profile of the Darjeeling tea, a prized variety known for its delicate taste. Similarly, IWA research suggests that a 1°C increase in temperature could cause a 5% decline in global tea production, forcing some tea estates to switch to more heat-resistant crops.

For British consumers, these rising costs could add a bitterness to their tea break. Truly low-cost ‘budget’ tea bags might become a thing of the past, and premium loose-leaf teas could become an even costlier luxury. Some shops have already reported scrapping their cheapest tea options, leaving shoppers with a noticeable price hike. 

According to Manchester Evening News, Lidl discontinued their cheapest tea bags, Knightsbridge One Cup Red Label (box of 160), which were priced at £1.39 this January. Now, shoppers can only buy the more expensive 240-pack, costing £2.59 (translates to £1.73 for 160 bags), resulting in a 24% price increase.

Asda also increased the price of their Just Essentials tea bags to 40p for a pack of 40.

3. Chocolate 🍫

The price of your favourite treat is about to get a bit more bittersweet. Cocoa prices reached an all-time high in October 2023, but continuing inflation and uncertain climate conditions in the year ahead mean that chocolate bars could see further price rises this year. A good job Easter is behind us…

Major cocoa-growing regions, particularly in West Africa, which supplies about 75% of the world’s cocoa beans, have been hit hard by El Niño weather patterns. These have brought extreme temperatures, including both intense rainfall and droughts, since 2023. Such conditions aren’t ideal for growing cocoa trees, and production has suffered.

Adding fuel to the fire is a nasty fungal rot disease threatening cocoa trees. This double whammy of reduced supply and continued demand is pushing cocoa prices to record levels.

In some better news for the UK’s chocoholics, Labour’s Kier Starmer has ruled out implementing a sugar tax on unhealthy foods, should his party win the next election. This may save UK shoppers from some future pain at the till after passing through the sweet aisle.

4. Cheese 🧀

British cheese lovers could see higher prices and even fewer varieties at supermarkets due to new post-Brexit border fees.

Starting from April 30, there will be a maximum charge of £145 on cheese imports entering the UK through the Port of Dover and the Eurotunnel. This fee is intended to cover the cost of operating new border control posts.

The import fee, along with other post-Brexit changes, has worried cheese importers. They say these new costs could lead to higher prices for consumers and a smaller selection of cheeses available in stores.

The cheese industry has warned that these fees could be passed on to consumers, leading to higher cheese prices. There are also concerns that some EU cheesemakers may no longer find it profitable to export to the UK due to the added cost, reducing the variety of cheese available in British shops.

On top of this, it’s bad news for some popular cheese varieties, which could increase in price due to scarcity of supply. The future of some beloved cheeses, particularly Camembert, might be at risk due to a separate issue. Scientists have observed a decline in the natural ability of Penicillium camemberti, a specific type of fungus, to reproduce. This fungus plays a crucial role in Camembert production. Efforts are underway to restore the genetic diversity of these cheesemaking fungi, before an oozing favourite is wiped off cheese boards for good.

5. Bananas 🍌

Bananas are the world’s most exported fruit, and they’re set to become more expensive this year. Climate change poses a serious threat to banana production as rising temperatures and extreme weather events disrupt cultivation. Additionally, a fast-spreading fungal disease called Fusarium Wilt TR4 is wiping out crops in many regions.

The banana industry is aware of these challenges and will be discussing them at the World Banana Forum in Rome. This forum brings together industry stakeholders including retailers, producer countries, exporters and research institutions. It’s going to be a challenging conference this year, with the survival of the most popular banana species up for discussion. 

One of the key topics will be sustainability. Consumers are demanding more eco-friendly produce, and banana growers are looking for ways to make their production methods greener. 

However, these sustainable practices come at an additional cost, which may come through sustainable financing methods or ultimately passed down to consumers.

6. Lamb 🍛

For the good of the environment, we should all be decreasing our meat consumption. But, with price rises hitting the butcher’s slab in 2024, it could be a better time than ever to cut back. 

The meat and poultry industry is facing a perfect storm of rising costs that threaten both customers and consumers – including core cost issues in the realms of energy, fertiliser, labour, and feed.

Feed costs account for up to 70% of a meat producer’s expenses, so increases are significantly stressful. Energy prices are impacting production processes, refrigeration, and transportation throughout the supply chain. And finally, global supply chain disruptions have started to limit the availability of meat and poultry products, further pushing prices upwards.

Lamb prices are a prime example of this trend. According to the HCC, lamb prices have seen nine consecutive weekly increases since the beginning of 2024. The current average price for Standard Quality Quotation (SQQ) lamb across Great Britain has reached nearly £7.90/kg, a significant jump of £1.74. 

This not only surpasses the previous record of £7.43/kg set in May 2023, but it also sits significantly higher than historical averages by around 50%. A tightening supply and the timing of religious holidays that traditionally feature lamb consumption (such as Easter and Ramadan, which both fell in March this year) have also contributed to rising lamb prices.

7. Cod and haddock 🐟

Seafood lovers need to ready themselves for pricier catches in 2024.

Overfishing remains a major concern, with depleted stocks pushing prices up as popular species become more scarce. To combat this, stricter regulations on fishing quotas are being implemented. While this is positive for long-term sustainability, it may lead to short-term decreases in catch, further impacting prices. 

Finally, rising fuel costs add another layer of pressure. Fishing operations rely heavily on fuel for everything from powering boats to running refrigeration units at sea. As fuel prices climb, these costs will likely be passed on to consumers. 

Over-reliance on a few core species is driving pricing ever higher, and stocks ever lower. Research by the Guardian found that in the UK, 80% of fish and seafood consumption is concentrated on just five species. Cod and haddock, the stars of a classic fish and chips, reign supreme, followed by salmon, tuna, and prawns. All of these species run the risk of inflated prices in the year ahead.

UK consumers can keep their seafood spend lower by swapping for lesser-loved alternatives, and restaurants and retailers can push such price savings while promoting sustainable eating.

Conclusion: the impact on businesses and consumers 🛍️

The combined effect of these price increases will inevitably be felt by both consumers and businesses. Consumers will face further strain on their budgets, potentially leading to changes in buying habits and a shift towards more budget-friendly options. 

This delicate situation could lead to several potential consequences:

  • Reduced demand: as prices rise, consumers might choose to eat out less often or opt for cheaper alternatives, impacting the revenue of food businesses. Raising prices to account for the increased COGS is inevitable, but there is a “price ceiling”, beyond which consumers might be unwilling to pay. This could lead to reduced demand, impacting sales and potentially forcing businesses to make difficult decisions about their operations.
  • Menu changes: businesses might have to modify their menus, removing items with the highest cost increases or using smaller portions to control their COGS.
  • Profit margin squeeze: businesses will have to carefully manage their operations and expenses to maintain profitability while facing rising food costs. This could mean cutting staff numbers or opening hours, for instance. Similarly, businesses might need to invest in efficiency measures to optimise their resource usage and minimise waste.

The upcoming year will be challenging for the food and drink sector, and they will face a tough balancing act to maintain profits – particularly amid other increasing overheads such as staff wage demands. While they will need to raise their prices to maintain profitability, they will have to do so cautiously, or risk losing cash-strained customers altogether. 

Written by:
Stephanie Lennox is the resident funding & finance expert at Startups: A successful startup founder in her own right, 2x bestselling author and business strategist, she covers everything from business grants and loans to venture capital and angel investing. With over 14 years of hands-on experience in the startup industry, Stephanie is passionate about how business owners can not only survive but thrive in the face of turbulent financial times and economic crises. With a background in media, publishing, finance and sales psychology, and an education at Oxford University, Stephanie has been featured on all things 'entrepreneur' in such prominent media outlets as The Bookseller, The Guardian, TimeOut, The Southbank Centre and ITV News, as well as several other national publications.

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