Wild commodity price rises and currency swings, rising inflation and yet more red tape and tax... sound familiar? This was the worst 2010 threw at us, as foreseen by AB InBev UK boss Stuart MacFarlane, our soothsayer of the year.

Our band of future-gazers – leading figures from retail, wholesale, manufacturing and marketing – predict more to come.

Soothsayer of 2010: Stuart MacFarlane
Mystic Mac's crystal ball had uncommon clarity as 2010 dawned.

Hit: He was spot on in his prediction that the FTSE 100 would be at 5,850 at the end of 2010 (almost, anyway - it closed at 5,899).

He also forecast accurately that the year would be worse for the industry for a number of reasons: price, inflation driven by government tax, VAT, unemployment increases and input cost increases.

And he was on the money again when he said the greatest battle we would face in 2010 would be government meddling, unnecessary regulation and the threat of tax rises and that the biggest issue people were not worrying about yet was inflation.

Oh, and that Spain would win the World Cup with Villa as top scorer...

Miss: Unfortunately, he was somewhat off the mark when he said the Spaniards would beat England 2-1 in the final with Rooney sent off in disgrace. But hey ho, a minor blip.

Crystal ball rating: Five stars

This year's panel
Irwin Lee, vice president and general manager, P&G UK
Paul Grimwood, chief executive, Nestlé UK
Joe Morris, operations director, TJ Morris
Marian Salzman, president, Euro RSCG Worldwide PR
Andy Clarke, CEO, Asda
Tom Lindsay, partner, Spayne Lindsay
Younus Sheikh, MD, Bestway Wholesale Group
Wilfred Emmanuel-Jones, founder, The Black Farmer Sausages
Jim Moseley, MD, General Mills UK
Mark Hunter, CEO, MolsonCoors UK
Lucy Neville-Rolfe, corporate affairs director, Tesco
Ton Christiaanse, CEO, Vion Food UK
Chris Etherington, CEO, Palmer & Harvey
Kate Waddell, MD for consumer brands, Dragon Rouge
Jason Gissing, finance director and co-founder, Ocado
Kishor Patel, board member, Nisa Holdings
Clive Black, head of research, Shore Capital
Jim Begg, director general, Dairy UK

Volatile currency markets, debt, interest rates what's keeping you awake at night?

Neville-Rolfe: Instability in global financial markets, although the government has managed well on this front and the early action they took to put the economy back on track has helped us all.

Clarke: The media is full of stories about price increases and when you add in potential public sector job cuts, rising petrol costs and the impact of VAT, it's certainly a worrying time for UK consumers.

Etherington: Instability in the eurozone.

Christiaanse: Economic instability in some eurozone countries, which could damage confidence in financial markets with a knock-on effect on consumer confidence.

Hunter: Internationally, the euro's stability. In the UK, inflation and its effect on the low interest rates consumers are enjoying.

Morris: Increases in interest rates even one of one percentage point has a massive impact on monthly repayments. The people currently spending are those seeing the benefit of incredibly low interest rates. This spending could disappear overnight due to small changes in interest rates.

Lindsay: Premature increases in interest rates. In my view this would have no effect in countering inflation, which is being driven by bottom up input causes not capacity shortages.

Salzman: It's not joblessness, it's not debt; it's our doomsday pessimism about joblessness and debt that's the real threat.

Patel: Talk of the threat and strikes. Also banks being selective in their lending, and lending at a premium.

The big four declared a trucein the banana wars after prices fell to 55p/kg. The price is currently 76p. What will it be the end of 2011?
Our experts say (average): 79p.

Percentage of our experts who believe this year will be better for the industry than last:

What impact will the new VAT rate have?

Morris: It will hit profitability. Intense competition will not allow retailers to pass it all on, so they will have to swallow some of it. This will come straight off the bottom line.

Patel: There will be initial shock but people will get used to it as they did with the drop and increase of two years ago.

Lee: It will vary across different categories. I expect it to manifest itself at different speeds and degrees.

Neville-Rolfe: This comes on top of the VAT increase we had last year so we have experience of dealing with this. Last year we took it in our stride. We'll do the same again.

Christiaanse: Limited. Rising commodity and utility prices will have a greater influence on consumer habits.

Lindsay: I think its impact will be next to nothing. Most retailers have pushed up prices already in anticipation!

The push to go premium went hand in hand with value range extensions in 2010. What will be the focus this year?
Etherington: Undoubtedly value. Improved understanding of customers' needs will ensure that segmentation drives the marketing agenda for many years.

Grimwood: Affordability will be important. Consumers are still looking for the big brands they trust to deliver high quality, but they need to be delivered in the right format at the right price.

Lee: Quality and performance are the foundations of true value. Consumers are more discerning than ever and they recognise value in different price segments.

Patel: Most significant in 2010 was Asda entering the premium range with Chosen By You. These types of ranges will continue to grow but customers won't pay through the nose.

Clarke: Our customers trust us to have the lowest prices. This year we will back this price promise up with a cast-iron guarantee if the basket of food you buy in our stores is not at least 10% cheaper than at our major rivals, we'll give you back the difference.

Hunter: Increasingly the entire beer category is putting value ahead of volume to stop its commoditisation and ensure it is well invested, innovative and profitable for us and our customers.

Christiaanse: Our research shows that consumers are suffering from shopping fatigue and looking for exciting premium products that deliver quality at a realistic price.

Neville-Rolfe: Value is all about price and quality and Tesco offers both. Customers are undoubtedly looking for more from their weekly shop and that's a great challenge for retailers. Our Finest range continues to strongly outperform the market, which shows people can and will spend on quality.

Morris: Quality will be pushed by the big boys. Discounters will fight for business off each other.

Moseley: Recession may be driving some people to eat out less and at home more, but when they eat in they want to treat themselves.

Emmanuel-Jones: Although people are not eating out as much, they want good quality, but I still think value is going to play a big part.

After a strong 2010, what does 2011 hold in store for own label?
Etherington: We predict growth the key grocery mults have a huge volume of market intelligence on their customers, which they will continue to mine.

Christiaanse: There won't be much difference to last year. However, the premium sector should continue to show growth.

Morris: It will continue to eat away at the brands simply because the big boys will keep pushing it.

Waddell: European grocery multiple retailers are showing increasing interest in the brand building value of own brand and early signs are that Marc Bolland will be investing in the M&S own brand after a period focusing on other power brands to complement their offer.

Neville-Rolfe: Tesco's Finest and Value brands are the biggest and second biggest food brands in the UK. We expect they will continue to grow as customers look for great value and choice. It will be another good year for our brands.

Clarke: The conversion of the Nettos and completion of the Chosen By You rollout will give more people access to Asda's low prices and new and improved range.

Patel: Own label will do better and better as the price and quality gap between brand and own label continues to be challenged and consumers become more willing to swap for value.

There was a surprisingly high level of NPD in 2010. What can we expect this year?
Lee: Bigger, better and more transformational NPD. No trade-offs. No compromises.

Waddell: I anticipate more NPD that targets strong, emerging or growing audiences, from 'mid-life women' to the over-60s to 'free-from' consumers or more ethnic audiences.

Hunter: New occasions for beer and the potential to reach new beer drinkers who enjoy beer infrequently are all opportunities. We've invested in this area as others cut back and will continue to do so.

Grimwood: We have a full and exciting programme of NPD in 2011 and believe that good consumer-focused NPD that is well executed in-store and well supported above the line will always drive consumer demand.

Food commodity prices hit record highs in 2010. Can we expect more of the same this year and if so, what can be done to mitigate the damage?
Lindsay: There's no doubt in my mind that food prices will go up potentially by between 5% and 10%.

Hunter: The question is how companies best manage the risk involved. We have provisions in place to ensure that our supply of 100% British barley is sufficient to meet our customers' needs throughout 2011.

Neville-Rolfe: We always do our utmost to minimise the impact of commodity price rises on customers. This year will be no different.

Patel: This will continue to be a major issue. A lot of the increases in the past 18 months have either been swallowed in the chain or dealt with through value engineering.

Grimwood: We're expecting commodity prices to remain high in 2011, driven by increased global demand and possibly further financial speculation, which will create pressure right across the industry.

Etherington: The underlying trend for commodity and food prices is upwards but it's important that steps are taken to minimise the impact of speculation on food prices.

Christiaanse: Food commodity prices will remain firm, and this will potentially lead to higher food prices as increased input costs will have to be passed through the chain.

Morris: Prices will only get worse due to increasing demand from China, Brazil, India and so on. As we saw in 2010, freak weather can also wreak havoc with crops.

Milling wheat prices headed inexorably upwards in 2010, hitting £183 a tonne in December. What do you think it will be by the end of 2011?
Our experts say: £197

According to our expert panel, the biggest economic challenge we'll face in 2011 is: Unstable currency markets.

In 2010 retail went app-mad. What will grab the headlines this year?
Lee: Already one in four of UK consumers has a smartphone. We expect advances in the digital space to come thick and fast.

Moseley: Nanotechnologies could provide major consumer benefits and therefore it's vital that industry and government obtain consumer acceptance for this technology.

Neville-Rolfe: If I could predict that I'd be buying shares! More important to the retail industry will be the technologies that reach commercial maturity. We expect more interesting retail apps.

Waddell: We haven't even seen half the power of apps yet from making ordering easier to barcode linking to the web or adding value.

Gissing: It will be the democratisation of tablet computing and mass smartphone ownership.

Patel: It will still be smartphone apps and also contactless payment.

Kraft's buyout of Cadbury overshadowed M&A in 2010. Which sectors and companies will be M&A targets in 2011?
Gissing: Small high street formats as Tesco and others continue to recognise that out-of-town is out-of-date. Consumers want convenience and food theatre close to home not big bland sheds on ring-roads filled with overwhelming choice. But if interest rates rise, funding for M&A will become more costly and consolidation may stall.

Lindsay: There are a number of sectors where overcapacity is causing serious pressures on margins and this isn't sustainable in the long term. There are also a number of private equity-owned business looking for an exit such as United Biscuits. And Premier Foods remains a likely source of disposals.

Waddell: More 'incongruous' portfolios may be streamlined, with some previously acquired brands finding more logical homes with other owners, freeing up ­valuable funds at the same time.

Begg: I expect to see ongoing consolidation amongst the 'new' discounters.

Christiaanse: Public fmcg companies have the opportunity to raise capital, and venture capital will need to find a home as well.

Etherington: The trend for greater consolidation will continue with M&A activity increasing slightly in 2011.

Patel: Companies set up on the back of the Somerfield/Co-op deal and Total, TM Retail and Murco.

Christiaanse: Small innovative companies could be swallowed by larger groups as this is less risky and cheaper than delivering innovation by themselves.

Waddell: Smaller, premium niche food and drink brands, as big food groups find getting NPD right first time increasingly difficult and the consumer demands the 'genuine article'. This could be within tricky categories like babyfood, upmarket soft drinks and snacking too. I also anticipate that international businesses such as Brazilian Marfrig will continue to acquire both branded and unbranded smaller businesses as they continue their international growth.

How far do you think the environment has slipped down the agenda over the past year?
Emmanuel-Jones: When a person is in survival mode the environment is very low down on the list of priorities. The environment is very low on that list at the moment and I don't think it will bounce back for a very long time.

Black: The environment suffered as a commercial issue in the recession and is now much more critically appraised. Green matters that are structurally meaningful will progress but the present consumer scepticism is real.

Etherington: Regardless of the state of the economy, the environment and sustainability have become pivotal issues. You ignore these at your peril.

Neville-Rolfe: The environment is a priority whatever the economic climate. Taking steps to green the business makes even more sense in an economic climate where efficiency and waste reduction are critical and customers want us to help them to save money and be greener.

So how much of a priority will green issues be this year?
Morris: Retailers are doing everything they can to drive costs down (such as energy) which will be good for the environment, but they won't be able to afford big show projects that don't give a financial return.

Patel: I think the environment will become a bigger priority as the economy recovers but not if it adds to cost of doing business.

Grimwood: The environment will continue to be a priority for us. In 2010 we announced the launch of our first two 'zero to landfill' factories. In the next four years we'll achieve this at our 14 UK factories.

Hunter: The environment is a board room issue. From a consumer perspective, the issue certainly won't go away it will be a question of what role a green proposition has to play does it become a hygiene factor or a point of commercial difference?

Christiaanse: Production will be increasingly affected by competition for natural resources, land and water, competition between food, feed and fuel, increasing urbanisation, and the need to operate in a carbon-constrained economy. We'll need to do more with less.

The BRC predicts online grocery sales will double in the next five years. Over-optimistic or on the money?
Gissing: The economic recovery is fragile but food is not a cyclical industry so it will continue to tick along. However, I think the BRC's prediction is conservative; the biggest growth will continue to be the gradual shift online.

Begg: Doubling is optimistic. The costs of building online infrastructure are significant.

Waddell: The figure seems realistic. But for online to deliver its convenience promise there needs to be faultless delivery, especially if the consumer is paying for the service. Intelligent substitution, assured punctuality, long use-by dates and care in packing and delivery still have a long way to go for many providers.

Sheikh: Everyone has to eat to live but whether figures will double remains to be seen. Continued cyber attacks on people like Amazon will cause a few hiccups.

Black: The online grocery market will continue to expand at a faster rate than the general market but any deterioration in economic conditions could make online grocery a luxury worth cutting out.

Morris: The BRC's prediction is realistic. That doesn't mean people will be making any money out of it, but it will grow.

Etherington: Lifestyle changes indicate the BRC prediction is spot on, and companies will definitely capitalise on this.

Hunter: We certainly see the online market growing and, historically, it's a channel where the beer category has been under represented.

Milk was a key weapon in last year's price wars. With a pint going for 45p on averagelast month, what will pricesbe at the end of 2011? 
Our experts say (average): 49p

The number expecting further significant job losses in the UK this year: 60%.

What impact will Amazon's move into grocery sales have on other online operators?
Gissing: Until they offer a true alternative to going to a supermarket their move will have no impact at all.

Morris: More companies are competing to lose money, so it will increase the pressure to lose money, and the result will be more money lost.

Etherington: It's too early to tell, but they are up against established tough competition.

Christiaanse: The high initial cost, and lack of expertise would make this a very long term impact.

Moseley: Amazon won't have a unique offering. Online sales already exist, and our retailer partners are witnessing growth.

Begg: Scale will require a big investment, and probably has to be alongside a major retailer.

Black: We see Amazon's entry into grocery as having a negligible impact. Famous last words?

How will discounters do this year after a less than fantastic 2010?
Patel: They will fare poorly. Discounters have no USP and are inconvenient.

Sheikh: They will come under increased attack from the multiples.

Black: Discount retailers are at the periphery of the UK food retail scene and with the absorption of Netto by Asda this 'peripheralism' will be accentuated in 2011.

Morris: It will be a tough year. They will fight to gain market share, opening more stores that overlap. Profitability levels will be hit and only the strongest will prosper.

Etherington: Established discounters will continue to prosper, although growth rates may become a little subdued.

Christiaanse: They've established a position in the UK market but will not threaten the established major players.

Waddell: They will continue to do well but potentially they won't 'make hay' to the degree of the last few years. They'll also continue to raise their food quality game the main job they have is to convince the consumer of the quality and erase any stigma attached to the brand.

Lindsay: Discounters will probably make a bit of a resurgence.

Who stands to benefit most from April's royal wedding?
Etherington: Without a doubt Champagne producers, as the nation toasts the happy couple.

Grimwood: The royal wedding offers a great opportunity for the grocery trade. In a year that looks tough, this will be cause for celebration and a chance to let our hair down. It's a shame we're not in the business of commemorative plates!

Sheikh: As ever the brighter, sharper companies will be ahead of the game. We've already placed our orders for memorabilia for our retailers to purchase.

Patel: The royal wedding will not have the impact people are making out.

Begg: Branded confectionery and gifts.

Hunter: Depends on the weather but I'd be feeling pretty optimistic if I was Duchy.

Waddell: I envisage a Ben & Jerry special variant, an Innocent W&K smoothie, a Pimm's Royal Wedding variant and a limited-edition Walkers smoked salmon flavour.

Finally, will 2011 be better or worse for the grocery industry?
Christiaanse: There's a grave danger things could get worse unless there are genuine supply chain initiatives to minimise waste and take cost out of the system. It is no longer possible for farming and processing to absorb global costs.

Emmanuel-Jones: I suspect it's going to be worse. It's going to be a really tough time, especially for brand owners, because retailers will seize the opportunity to plaster the whole supermarket with own-label products.

Morris: We already know about VAT increasing, public sector cutbacks, increasing costs, more competition and less money being spent. There are other things to fear, such as an interest rate hike, euro meltdown, public unrest, major terrorism attacks on UK soil, freak weather or a major pandemic.

Lindsay: It will be a challenging year. Consumers will begin to feel more pain and inflation will eat into take-home pay. Consumers will need to increase their spend on food; something which has been decreasing for decades. As this happens there will be more and more pressure on promotions.

Grimwood: The outlook for 2011 is challenging. The recent government spending review and rise in VAT are starting to weigh on consumers' minds and most will be watching their spending more carefully as their disposable income reduces.

Hunter: Taxation is a big factor for alcohol and, while there was good news with the proposed changes to duty on beers below 2.8% ABV, we are living in the shadow of an alcohol duty escalator, which will compound the impact of an increased VAT rate.

Sheikh: At best it will be very similar to 2010. Unemployment and public sector cuts and the increase in inflation and commodities will have significant effects on everyone's business and personal lives.

Etherington: Better. There'll be a more benign economic environment, better customer alignment, and improved consumer targeting will continue to drive growth.

Begg: Better. Demand for dairy products will move towards pre-recession levels. The risks surround public sector cuts and purchasing power.

Black: 2011 may be marginally better by year end but we see a lot of bumps on the way, such as how the VAT rise plays out, how benefit cuts impact demand and how harvests pan out. 

What the others said in 2010...
Charles Wilson, CEO, Booker
Hit: Wilson hit the nail on the head when he said independent retailers would have a decent year and that the greatest battle would be the state of the UK's finances. He also predicted the hung parliament.
Miss: But his suggestion Tony Blair would be selected as prime minister by Lord Mandelson was surely made in jest.
Crystal ball rating: Four stars

Younus Sheikh, MD, Bestway
Hit: He was spot on in his conviction that Cameron would be the next PM and not far off when he forecast a pack of 20 fags would cost £5.50 by year end (they were £5.43).
Miss: But England as World Cup winners? Hmm. Almost as droll as the suggestion legislation would be introduced restricting people to eating two bags of crisps each.
Crystal ball rating: Four stars

Paul Lindley, founder, Ella's Kitchen
Hit: There wasn't a hope the industry would agree on a standard nutritional labelling scheme by the end of 2010, said Lindley... and he was right, as he was about its big challenge being unstable currency markets.
Miss: He tipped Paul Foley as the next boss of Morrisons, with an each-way bet on Sir Ken Morrison (not that anyone got Dalton Philips).
Crystal ball rating: Three stars

Clive Black, head of research, Shore Capital
Hit: His forecast that VAT would rise to 19% wasn't far off. He also reckoned public debt and the public sector recession were the big issues people weren't worrying about and if they weren't then, they are now.
Miss: Unfortunately, Brazil didn't win and an ombudsman wasn't so low on the government agenda the "Adjudicator" comes in in 2012.
Crystal ball rating: Three stars

Jonathan James, independent retailer
Hit: James got the new PM's identity right but said it wasn't a done deal, guessing correctly it wouldn't be a walkover for the Tories. He also predicted that minimum-priced alcohol would be high on the government agenda.
Miss: He forecast an oil company acquisition but although Murco and Total were put up for sale there have been no takers... as yet.
Crystal ball rating: Three stars

Dave Lewis, UK chairman, Unilever
Hit: Lewis probably wishes he wasn't right, but he correctly foresaw that unemployment levels, fragile consumer confidence, retail deflation and commodity cost increases would make for a challenging environment.
Miss: He also said it wouldn't matter who the PM was given the macro economic situation - 20% VAT suggests otherwise.
Crystal ball rating: Three stars

Tim Hurrell,MD, The Co-operative Food
Hit: Hurrell was bang on with a number of predictions, but wasn't exactly sticking his neck out when he said Cadbury's acquisition by Kraft would be the biggest deal and that 2010 would be worse for many than 2009.
Miss: His instinct was right but timing was out when he forecast that an ombudsman would be in place by the end of the year.
Crystal ball rating: Two stars

Richard Pennycook, finance director, Morrisons
Hit: The big issue people weren't worrying about was water security, said Pennycook. And how right he was, which is why the IGD devoted a conference to this in October.
Miss: But his prediction that 2010 would be better than 2009 because less inflation would be passed on to customers looks wide of the mark in the wake of further food price rises.
Crystal ball rating: Two stars

Peter Kendall, president, National Farmers Union
Hit: Kendall was spot on when he said consumers wanted value with values and that cheap food alone was no longer enough.
Miss: He was jumping the gun a tad when he predicted that primary producers would start to see the EU pesticide withdrawals begin to bite. NFU sources don't think their impact will be felt until mid-decade.
Crystal ball rating: One star

Andy Bond, former CEO, Asda
Hit: Bond stayed close to home with his crystal ball gazing, predicting Asda would pick up The Grocer 33 award for cheapest supermarket for the 13th year in a row. It did, in June.
Miss: As to who'd win the World Cup, he cheekily said Asda shoppers. But sales were up just 3.1% (Kantar Worldpanel) in the 12 weeks to the final, the lowest uplift in the Big Four.
Crystal ball rating: One star.