Top 4 Challenges Facing the Grocery Supply Chain in 2024

From disease outbreaks affecting crops to unpredictable weather patterns disrupting livestock and agricultural production, these issues are causing significant ripple effects in the food and drink industry.

Citrus Greening Disease: Orange Prices Soar

Courtesy of Envato

The spread of citrus greening disease, which affects the color and acidity of fruits, has decimated orange crops in key regions such as Florida and Brazil. Major juice brands like Innocent and Tropicana have been hit hard, leading to skyrocketing orange prices. As prices for oranges more than doubled to £4,800 per tonne, consumers are feeling the impact. Innocent’s CEO, Nick Canney, warned that this crisis in global orange juice production will likely lead to price hikes for smoothies and other orange-based products. The crisis has put pressure on profits and forced changes in product pricing and promotions.

Bird Flu: Global Egg Shortages Drive Prices Up

Courtesy of Envato

Ongoing bird flu outbreaks continue to wreak havoc on the egg industry. Prices have risen 16% since 2019 due to shortages, with 33 million commercial laying hens culled in the US alone this year. UK farmers are also under strain, with many downsizing their flocks or exiting the industry entirely. Last year, the British Free Range Egg Producers Association revealed that 165 farmers were forced to stop egg production temporarily or permanently due to the uncertainty surrounding avian flu outbreaks.

Wet Weather: Reduced UK Grain Harvests and Soaring Potato Prices

Courtesy of Envato

Unseasonably wet weather in the UK has significantly impacted grain harvests, with the Energy & Climate Intelligence Unit (ECIU) predicting a reduction of 17.5% in wheat, barley, oats, and rapeseed production compared to last year. The decline in grain yields is expected to drive up prices for bread, beer, and biscuits. Additionally, wet conditions have caused farmers to reduce potato pack sizes, leading to a 25% price increase per kilo for shoppers. Many farmers have been unable to plant crops due to waterlogged fields, contributing to poor-quality harvests.

Drought: Skyrocketing Sugar Prices

Courtesy of Mondelez

In regions like India and Thailand, severe drought has resulted in low sugar production, pushing global sugar prices to new heights. This has led to imminent price hikes in confectionery products, as companies like Cadbury have already raised prices due to increased production costs. Experts warn that with climate change driving more extreme weather events, future shortages and volatility in sugar and other agricultural commodities are likely.

These supply chain challenges highlight the interconnectedness of global agricultural systems and the profound effect that climate and disease can have on the grocery sector, driving prices up for consumers and forcing companies to make difficult choices.