After being faced by all the challenges Covid brought to the food industry, food producers are now facing a new crisis as the prices for raw materials or ingredients are rising rapidly. Fevia, the Belgian Food Trade Association, estimates that half of the Belgian food companies are experiencing supply disruptions. Additionally, 70% of the food companies need to adjust the preparation of their products and 40% of them will temporarily stop or reduce production in the coming weeks.
The recurring issue in this ongoing food crisis and in the ones before, is the negotiation power of retailers towards suppliers. If suppliers do not reevaluate their channel mix or business model but keep relying solely on the traditional distribution channels, they will keep on experiencing disappearing profit margins. As a result, the question is not “Will we experience a new hit in the food industry?”, but rather "When will we be hit by a new disruption?”.