With so much going on in the world right now, it’s inevitable that current events are having – and will continue to have – an influence on the spice and ingredient market. In our latest blog, our senior purchasing manager and expert in ever-changing market conditions, Justin Silvia, offers his insights into how exactly current events are shaping the market.
Between inflation, international conflicts, and unpredictable weather, the spice and ingredient market has become increasingly volatile, with changes driven by current events being swift and impactful. Rising prices continue to be a concern along the supply chain. Some changes may be temporary, but others will have a long-term impact on the food industry. Keep reading our insights into how current events are influencing the market right now.
Inflation
It’s been about a year since inflation began making headlines and causing alarm for economists and consumers alike. Although there’s been some sign of inflation cooling down a bit, the effects of inflation from the past year are still being felt across the supply chain, with prices continuing to be elevated. Projected annual CPI U.S. inflation rates range from 2-2.5% for CY2024. Food prices as a function of CPI projects to range from 2.3-3.0% for CY2024.
Consumers have inevitably been adjusting their spending habits accordingly, especially with rumblings of a recession giving them pause. Their eating habits have been changing as a result, with many spending less on foodservice and cooking at home more. Plant-based foods have slowed down their multi-year rise in popularity, as they’ve become cost prohibitive to some consumers amidst inflation.
Climate Change
Weather is becoming predictably unpredictable, thanks to climate change. These weather-related uncertainties have made agricultural spices, herbs, seeds, and fruit/vegetable outlooks difficult to predict. Droughts in the growing regions of oregano and heavy rains and hail in the growing regions for chili peppers, for example, have been cause for some concern.
Avian Flu Outbreak
The largest global bird flu outbreak in recorded history has combined with increased costs of fuel, feed and packaging to create a national egg shortage. In the U.S., more than 58 million birds in 47 states have been affected. Historically high pricing and lower supply of eggs will have ripple effects across supply chains, while the full impact may not be realized for some time.
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