Addressing Food Price Increases

Written: Neil Middlemiss

Role: Project Manager

US consumers visiting their local grocery store are experiencing major sticker shock as food prices continue to rise. All over the country, people are paying significantly more for the same items, which has a trickling effect on eating out; menu prices are now 20-30% higher than they were pre-pandemic.


It is not just consumers who are being impacted by rising food prices either. Retailers and manufacturers also face significant challenges as they struggle to pass on all of their additional costs to customers. The problem is particularly acute for smaller businesses. Since they do not operate on the same scale as their larger competitors, rising costs put intense pressure on their margins, forcing many of them to ultimately exit the business.


There are a number of factors driving the increase in food pricing. Geopolitical tensions in an unstable world are impacting the flow of trade. Economic instability arising out of the pandemic is driving inflation higher, countered by increases in interest rates. Climate change is contributing to reduced crop yields causing shortages of supply in the market.

All of which is compounded by the fact that many food suppliers are taking advantage of this situation to drive prices even higher.


A once stable and predictable market, where companies could make plans for their business, has turned into a volatile one, where businesses are forced to react to events. Luckily, there are a number of steps companies can take to address these challenges.


A number of our clients in the Restaurant and Food Manufacturing industries have turned to us for help addressing their cost problems and reducing the pressure on their bottom line. With the knowledge and experience accumulated over many years of consulting in these businesses, we’re able to assist in four specific ways:


1.Market Knowledge

We bring to bear our breadth of information gathered across the Foodservice industry over the years and from recent experiences working with clients addressing similar challenges. Having access to a much wider range of data than clients, who may be operating in a specific vertical, enables us to paint a clearer picture of their current situation. We gather all relevant data and share benchmarking knowledge at a high level to assist clients in dealing with their own specific issues.


2.Supplier Network

Working with a number of clients means that we have great working relationships with a wide range of supplier partners across the industry and are always up to speed with latest market pricing. We’re able to work with clients to align this information to their individual product specifications. We are also able to identify potential opportunities for our clients, as well as for vendors seeking to develop their business with new customers.


3.Procurement Tools

In addition to market intelligence, we provide our clients with a full suite of procurement tools. We’re able to support them on a technical level with aspects such as Cost Modelling or Negotiation strategies, or in a more comprehensive way through full sourcing studies across a wide range of categories. Whether we serve as an adjacency to in-house professionals or as a wider support to smaller companies without an independent procurement function, our solutions are always tailored to the specific needs of the client and the individual challenges they need to address.


4.Geographical Advantage

As a Procurement Consultancy operating across Europe and North America, P4 has valuable knowledge and insights into the dynamics in both of these markets. We understand thoroughly how the cost drivers impacting the supply chain are similar or different by market. Our ability to share local knowledge and best practices enables P4 to create solutions that best meet the needs of its clients.


While many of the factors driving food pricing higher and the challenges facing the Foodservice industry are very similar, the solutions are largely linked to the specific requirements of individual businesses. In the current environment, having the flexibility to adjust your approach to secure supply and drive down costs is critical to your profitability and the viability of the business. The support P4 is able to offer in this process is a major factor in our clients’ decision to work with us.



You will be surprised at how quickly we can create real value for your organisation through People Powered Procurement. Click here to contact us today.