Market Information
Bacon
The recent Foot & Mouth outbreak in Germany has resulted in the borders being closed to all non-EU countries which obviously includes the UK. The knock-on effect of the German border closure will mean less raw material and inevitably higher prices, at this moment, it is only affecting the streaky prices but almost certainly the back prices will start to increase very soon.
Cocoa
November saw the market start its spike back almost hitting £10,000 per mT after reports that we have now seen the best of the main crop 24/25, high winds and wetter weather saw the cocoa pods in infancy struggling to mature. Some selling of speculator stock between Christmas and New Year saw the drop back into the £8000 per mt region with the volatility now swinging +/- £200 per day around the £8,600 per mT mark.
White Fish
North Atlantic Cod and Haddock are currently trading at record highs due to an expected cut in quotas recommended to be as much as -31 % (Atlantic Cod) and 24% (Atlantic Haddock) for 2025. This represents a reduction of 63% in the past 4 years.
Wheat
The New Year has brought about a fresh focus and we see long-holders happy to price both old and new crops. Impressive wheat imports have created an even bigger 2025 domestic wheat export surplus. UK wheat values remain too expensive to export into the EU but the gap has closed compared to 4 weeks ago. Looking at the old crop / new crop spread, the old crop values will need to ease further. UK crops are looking p etty well considering the huge amount of rainfall we have had over the past few months. Instead of looking an insipid yellow, they look a healthy, lush green probably helped by residual nitrogen from the previous cropping.
Edible Oils
Rapeseed oil production globally has reduced by 3.1 million tons to a three-year low. Crop prospects are looking more favourable for the next season, which starts in July-August, but this will depend on weather conditions in the coming months. Global supply on edible oils is very tight with Bio-Fuel requirement competing in the same market as Edible oils, further infl ating prices. Major veg oil markets eased over the past month, except for sunflower oil, after rising sharply from late September/early October due to sharp crop losses and strong demand. Soy oil prices have eased due to better prospects in South America and a relatively decent US crop. However, world demand for soy oil is very strong and we are seeing customers switch from more expensive palm oil with global demand for soy oil, the use of biodiesel is still strong, but the market is still watching for any policy changes in the US following the change of administration. Palm oil markets have come off 2-year highs, due to a delay in the Indonesia palm oil inclusion in biodiesel implementation.
Sea Freight Costs
The cost of shipping containers delivering raw material to the UK has increased significantly in 2024 due to the attacks in the Red Sea and Suez Canal. Ships have had to be rerouted, extending lead times and adding costs. Increased demand for containers due to extended lead times has also increased the cost of shipping into the new year.
Packaging
Increased demand in Europe due to the Olympics and Euros coupled with increased shipping costs and reduced availability due to shipping disruption, has driven price increases to both plastic and paper packaging.
Fuel Costs
Prices have been increasing over the last few weeks due to the US putting sanctions on Russia, which then meant the supply took a hit making fuel more expensive. Recently, prices have been coming down daily due to President Trump relaxing the curb on Russia’s supply.
Latest News and Research
Creative Ways to Tackle Cost Pressures
Retail analyst Glynn Davis published the article “Looking at creative ways to tackle cost pressures“, which discussed the rising labour costs in the hospitality and retail sectors. Businesses are finding it challenging to manage these costs, especially with the increases in the national minimum wage and national insurance contributions.
The article highlights that these changes heavily impact retail and hospitality due to their large employee bases and high numbers of entry-level jobs. Some businesses, like Sainsbury’s, have resorted to job cuts and closures. Others, like Scottish chef Dean Banks, are reducing employee numbers and reconsidering expansion plans.
To combat rising costs, businesses are exploring alternative strategies:
- Focus on add-on business areas that require fewer people, like incorporating retail or selling merchandise.
- Supply branded food goods into retail, as Itsu has done successfully.
- Reduce opening hours or outsource the kitchen for pubs.
- Add rooms to pubs, as the labour costs for accommodation are lower and guests tend to spend more on food and drink.
- Automation, such as kiosks in quick service restaurants, to boost efficiency and reduce labour costs.
The article concluded that while the challenges of rising labour costs are significant, the hospitality industry is actively seeking creative and innovative ways to adapt.
The Power of Superfans in Hospitality
Katy Moses revealed research from KAM on Superfans in Hospitality at the Restaurant Marketer & Innovator European Summit. Here’s our summary of the information.
Many hospitality brands focus on attracting new customers, but their most valuable asset might already be in the building—superfans. These loyal customers don’t just visit regularly; they’re emotionally invested in a brand, recommending it to friends, sharing it on social media, and contributing significantly to revenue. According to research by KAM, 32% of UK adults feel a strong connection to a hospitality brand, making them more likely to return, spend more, and promote the business for free.
So, how do you cultivate superfans? Exceptional customer service is key—personal touches like greeting customers by name or remembering their usual order go a long way. Maintaining consistent quality while introducing new menu items or exclusive offerings keeps superfans engaged. Community also plays a vital role; people return to places where they feel at home, making social spaces an important part of the experience.
Loyalty programmes, exclusive perks, and digital engagement help strengthen these relationships. Superfans are highly active online—68% share their experiences on social media—so leveraging technology through targeted marketing and social media interactions keeps them connected. Ultimately, superfans act as a brand’s unpaid marketing team, turning their passion into advocacy. By fostering these relationships, hospitality businesses can transform regulars into lifelong fans.
Backman’s Research
The latest Weekly Briefing Report from Peter Backman highlights the impact of rising employment taxes and minimum wage increases on the UK hospitality sector. Consumers will see noticeable price hikes, with drinks in London pubs rising by 10-20p per pint and meals, such as fish and chips in Edinburgh, approaching £20. Many venues are adjusting by shortening operating hours, particularly during quiet periods, and streamlining menus to control costs. Customers can also expect increased automation, with more self-service ordering and digital interactions replacing traditional staff service. Meanwhile, off-peak discounts and promotions are set to become more common as businesses try to spread demand and maintain steady footfall throughout the day.
The growing divide between peak and off-peak pricing will likely become more pronounced, with restaurants and pubs charging higher rates during busy times to offset quieter periods. Some venues may opt to close entirely during non-peak seasons to remain financially viable. At the same time, delivery services are already offering significant discounts, with some slashing prices by up to 35% to retain customers. As a result, the way Britons experience hospitality is shifting, with cost-conscious consumers needing to be more flexible with their dining habits to secure the best value.
