Fruit juice prices are set to rise sharply this year as spiralling raw material costs turn orange and apple juice into luxury items for many households.
Poor weather in key growing areas coupled with burgeoning demand from countries such as China have sent raw material costs soaring, with experts predicting factory prices could rise by as much as 80% for orange juice and 60% for apple juice in 2011.
This would place further upward pressure on retail prices of orange and apple juices, which have already gone up sharply. Over the past year, the price of a one-litre carton of Tropicana fresh orange juice across the big four and Waitrose has risen 22%, from an average of £1.80 to an average of £2.19 [BrandView.co.uk], while a one-litre carton of own-label apple juice from concentrate has gone up an average of 21%, from 87p a year ago to £1.05 now.
Suppliers are likely to push hard for further price increases from supermarkets to counter the spiralling commodity costs.
Richard Hall, chairman of food consultancy Zenith International, said orange and apple juice producers were already the world's largest, most efficient juice producers, so there was little room for them to absorb cost increases.
"Pricing for orange and apple juice this year could see the most radical change," he said.
Niche juices such as pineapple and pomegranate juice have also been affected. Adam Pritchard, CEO of drinks maker Pomegreat, said costs had gone up 40% and his company was pushing through retail increases of about 10% where possible.
Commodity crunch: the raw materials to watch in 2011 (analysis; 15 January 2011)