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As inflation rages, what can food manufacturers do to combat this?

process manufacturer inflation

 

It’s probably no surprise to anyone that the food industry has been one of those most impacted by the surge in inflation of the past several months. Inflation is coming at the UK’s food and beverage manufacturers from every angle.


A perfect storm for inflation

Sixty per cent of the industry’s manufacturers report being affected by rising energy prices, according to a recent report by the Office for National Statistics. This is the highest percentage in any industry, where the average across all sectors is 38%.
Food and drink manufacturers are also having to deal with supply chain challenges and labour shortages.
All three factors combine to force up prices for the industry. And at some point, those increased costs have to be passed on to already cash-strapped consumers.


Crisis and evolution go hand in hand

Manufacturers are using this crisis to up their game, focusing on increasing efficiency at their processing facilities, and implementing new strategies to reduce costs.
Indeed, before inflation hit, manufacturers were already on the way to making their processes and products more sustainable.
Many had or were moving towards replacing plastic with recyclable and/or biodegradable packing. There were also moves towards reducing water consumption, using renewable energy and more sustainable cleaning products for equipment.


Getting techy

The industry may not be known for being at the forefront of technological change, but the shortage of workers means it makes sense to embrace industry 4.0 technology.
So, expect to see much more automation in processing plants, with increasing connectivity between manufacturing equipment, computers and the internet. Increased IoT (internet of things) connectivity will allow manufacturers to fine-tune processes to save on time and energy.


The price of everything

As for pricing, much of this is out of manufacturers’ hands, thanks to the invasion of Ukraine, the breadbasket of Europe.
Indeed, the World Bank has predicted the invasion will cause the ‘largest commodity shock’ since the 1970s, firstly in the cost of ingredients. Wheat prices could go up by 42%. The World Bank also predicts large price increases for soybeans, barley, oils and chicken.
Some large manufacturers, such as Danone and Unilever have already stated that this means the cost of their products will be going up.
Sudden price increases can cause lasting damage to consumer trust, and it may be that the only way to avoid this is by being more transparent about the costs of manufacture. Full transparency can make a big difference.


Let the experts help you

Turners Process Equipment consultancy service can help manufacturers improve efficiency and minimise costs. Together with our sister company, GDE Associates UK, we have a wealth of specialist knowledge and experience in process engineering.
Working in the strictest confidence, we use a holistic approach that covers every aspect of running a processing plant, from site location, infrastructure and logistics to energy usage, budget parameters and more.

Have a project in mind? Call us now on 01206 752017 or email us