The grocery supply chain faces significant challenges in 2024 impacting various sectors.
- Citrus greening disease disrupts orange production, causing price surges.
- Avian flu outbreaks elevate egg prices due to supply shortages.
- Adverse weather threatens grain and potato harvests, leading to price increases.
- Global sugar prices soar, prompting confectionery price hikes.
The grocery supply chain is currently experiencing unprecedented challenges, profoundly affecting numerous industries within the sector. Citrus greening disease has emerged as a major threat, particularly for the orange production in Florida and Brazil. The disease not only deteriorates the quality of oranges but also results in significant financial implications for juice producers like Innocent and Naked Juice. Consequently, the market has observed a sharp increase in orange prices, reaching £4,800 per tonne. This escalation in cost is expected to ripple through to consumers, affecting the price of smoothies and other orange-based products in the UK.
Concurrent outbreaks of avian flu have compounded problems in the global egg industry. With over 33 million commercial laying hens culled in the United States, egg prices have risen by approximately 16% since 2019. The situation has placed immense pressure on suppliers and farmers, many of whom face the daunting prospect of downsizing operations or, in severe cases, exiting the industry altogether.
Furthermore, challenging weather conditions, as reported by the Energy & Climate Intelligence Unit, have severely impacted the UK’s grain and potato harvests. Projections indicate a potential reduction in grain production by four million tonnes this year, a substantial decrease compared to previous years. Consumers are already feeling the effects, with retailers reducing potato packaging sizes, effectively increasing prices by 25% per kilo without any apparent decrease in unit cost.
Lastly, the sugar industry has been hit hard due to adverse weather conditions in key producing regions like India and Thailand, causing a steep increase in global sugar prices. This development has affected confectionery companies, leading to anticipated price hikes for products such as cookies and other sweet goods. Industry experts express concern over recurring climate-related disruptions, which threaten to exacerbate the volatility of sugar prices in the foreseeable future.
The grocery supply chain is poised for significant disruption in 2024 due to these compounded challenges.
