Candice Finn, our new Commercial Director, was recently featured on CateringScotland.com, discussing how collaboration can help combat inflation.
We share her thoughts here, where she discusses the importance of understanding the full inflation picture, how our consultants can help businesses mitigate challenges in the months ahead and why inflation needs to stay at the forefront of conversations.
“After a long period of stable food pricing, where only the odd commodity periodically increased in price, most categories seem to be affected now and since costs have been soaring, there has been much talk about inflation. In fact, it’s probably been the centre of most conversations we’ve had with clients over the past six months.
“It’s hardly surprising given inflation for November was at 16.5%, the highest rate for 45 years. For many of us it’s the highest it’s been in our living memory.
“But are we understanding the full picture – and why haven’t we always embraced the inflation conversation?
“So often when we talk about inflation, we refer to the Consumer Price Index (CPI). But as the CPI is based on residential inflation this doesn’t take into account all the factors that impact the commercial foodservice sector.
“Too often, inflation and food costs haven’t been properly discussed. Perhaps we were lucky enough to be able to semi-ignore inflation before, having become accustomed to any fluctuations being mild and impacts small. What used to be an annual conversation, sitting under ‘AOB’ on the agenda, now needs to be front and centre at every single client review. We need to get into the measures that can be done to help mitigate this. Let’s face it – inflation is going to remain high for the foreseeable future.
“For the vast majority of us, business conditions have never been as tough as the past four years. It’s been the perfect storm – war, Brexit, the pandemic and uncertainty in the political climate around growth and stability has resulted in the double-digit food price inflation, which is showing no sign of slowing down. It’s been challenging to put it mildly.
“With such a variety of changes happening at speed, our clients have been asking for solutions including strategic, tactical or operational support. The outcomes minimise the impact of CPI on organisations through implementing more efficient and cost-effective processes.
“Whether currently partnered and working directly with wholesale partners, a specialist contract caterer or even a specialist procurement partner, the business and the supply chain need to be honest and transparent with each other. Really honest. Understanding challenges that the industry is facing is something we like to think we know quite a bit about, after operating as a trusted partner for so many clients for over 30 years – but every business is unique and individual.
“The industry-wide challenges will impact different businesses in different ways. Some will weather some storms with relative ease, others will be rocked quite a bit. So now, more than ever, is the time to have transparent conversations about where support is most needed so brain power can be pooled and solutions can be found.
“As we’re all navigating new waters, what has worked in the past may not work now. This is where pulling on the expertise of others will really come into its own. Third parties bring the benefit of having a broader view, equipped with insights and data from across the industry at their fingertips – as well as learnings on what has worked with other businesses, across both in-house services and outsourced providers.
“It doesn’t have to just be focused on the foodservice operation either – it can review the entire business including the facilities and assets, how space is being utilised, energy efficiencies and so on.
“We need to come together to create new solutions to get through the coming months. Unless we all are agile, flexible and innovative in our approach it’s likely there may be more business casualties in the next year. And if we dare to look ahead to when things become more stable – let’s not revert back to once-a-year inflation conversations. Let’s keep cost conversations at the forefront of every meeting, keep the dialogue open and transparent and carry this new vigilance forward.”
The Litmus team