Shoppers have been put off by sharp price increases the average wholesale price of nuts has shot up 39% [Mintec 52w/e 14 April]. The wholesale prices of a number of dried fruits, particularly vine fruits, have also risen dramatically. One of the main reasons for this cost increase, says AF Nuts MD Tony Farndell, is sterling's slide against the dollar.
"Sterling is down this year from $1.63 to the £1 to about $1.50 to the £1," says Farndell. But that's not the only reason.
"Most nut and dried fruit commodities are suffering from increases, due to short crop runs, more demand from places like China and global increase in nut and dried fruit consumption, maybe due to healthy eating. Some prices are also being forced up due to a lack of finance from the banking sector," he says.
Unless buyers have brought forward contracts, the spot price for goods will inevitably be higher due to the supply/demand situation. Value sales of baking fruits have risen 17.1% despite volume growth of just 2.2%, while value sales of cherries and peel have shot up 16.2% on volume growth of just 1.3% [Kantar].
"This clearly indicates price inflation," says Humdinger brand manager IIona Pietruszewska. "It was particularly seen in raisins and sultanas with consumers trading down in pack size, or brand owners reducing pack sizes."
In nuts at least, it seems as if retailers have been able to absorb the worst of the wholesale price rises for the moment, thanks to the high margins they've historically enjoyed in the category.
"It's difficult to see any negative impact on retail prices yet," says Whitworths marketing director Clinton Orchard. "It's just a few nuts not performing well Brazils, cashews, pecans."
But with wholesale price rises showing little signs of abating, it's inevitable at some stage retail prices will follow.
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