Lately, there seems to be one common worry on the minds of those in the food industry - and on many consumers’ minds as well - rising food costs.

Recently, corn, wheat, eggs and milk all saw price increases for a variety of reasons. During the past year, milk prices alone rose 11 percent on average and egg prices rose 29 percent.

It’s difficult to pinpoint reasons for these rising costs. One thing is clear, processors are feeling the pinch and the rising costs are trickling down to the consumer level.

I, for one, haven’t spent less than $100 on groceries for my two-person family in months. While I was relieved to find that it wasn’t simply that my new husband and I were eating more post-wedding, I wouldn’t say I’m comforted by the fact that rising costs (and not additional purchases) are to blame.

According to economists, 2007 saw retail food prices increase about 5 percent, which is nearly double the rate in 2006. And there doesn’t seem to be any solid indication of an approaching slowdown. A recent report in the United Kingdom’s Times Online warned that “rising food costs” are one of the “perils the U.S. will face in 2008.”

But it isn’t just us, the United Nations Food and Agriculture Organization said its global food price index rose 40 percent last year to the highest level on record.

According to the United States Department of Agriculture, the costs of items made with wheat or soybean oil are expected to rise so high over the next year that the cost of cooking at home will go up by 4.5 percent.

How will these rising prices affect our industry specifically?

At a meeting last year, Sara Lee Corp. CEO Brenda Barnes announced the Downers Grove, Ill.-based company would be raising its prices for the third time in a year.

“We’ve already raised prices and have more planned,” Barnes said. “We are certainly facing these headwinds of increased commodity costs, some of them at unprecedented levels, like wheat.”

ConAgra Foods, Omaha, Neb., Unilever U.S., Englewood Cliffs, N.J., and Nestle USA, Glendale, Calif., all have raised retail prices as well and have said they will do again when appropriate.

Will consumers eat the costs and carry on cooking in the kitchen? Will processors change formulations to use less costly ingredients? Or will they find ways to justify higher costs to consumers? Either way, this year will require some creative thinking from the food industry’s decision makers.


JUST THE FACTS

According to a recent consumer survey conducted for Whole Foods Market, twenty percent of respondents claimed that slimming down would be their New Year’s resolution this year, but 75 percent said that they would prefer to adopt “long-term healthy lifestyle solutions” and never make a resolution again.

Source: Packaged Facts, a division of Market Research Group

Would you like brie with that? How about some caviar? The gourmet foods market is on the rise. By 2012, gourmet/premium foods and beverages industry sales should rise to $96 billion, with the cheese and dairy sector expected to post the highest growth rate at 13 percent, according to a recent report.

Source: Packaged Facts

By 2010, 71 percent of Americans are projected to be loyal or occasional users of organic foods, an increase from 41 percent in 2000, according to a new report.

Source: Datamonitor’s “New Product Launches in the USA and Canada”

A recent study shows that cooking vegetables may actually increase the nutrient content - defying conventional cooking wisdom. The Italian researchers conducting the study found that steamed broccoli contained more glucosinolates, a group of plant compounds touted for their cancer-fighting abilities, than raw broccoli.

Source: ScienceDaily