Just what is going on?
It won’t come as much of a shock if we were to tell you that there have been further price increases from our suppliers in recent weeks, coupled with a squeeze on (very) limited raw materials from further afield, and an exceptionally sluggish supply chain. Historically we have absorbed the smaller increases but when a supplier comes along with a 26% price hike, that’s a huge hit and one we can’t readily swallow.
Continued volatility surrounds container costs, which have doubled in 6 months. Raw materials represent a slightly different kettle of fish as that’s a simple case of market mechanics – supply and demand. For now, we have had to respond to these well documented market forces and increase our prices, although we don’t expect all of them to be permanent. Container surcharge prices should eventually drop (and the inflated transport costs too) and we have had assurances from some suppliers that this decrease will be reflected in cost prices returning to some level of normality in the future.
So for now it is worth looking at less in demand packaging and having it as a plan B. The Biodegradable Food Packaging range we stock eg Bagasse is always worth a look (It has suffered slightly less). We are quickly selling out of Plastic Takeaway Containers and anything made of food grade card. This includes Cupcake Boxes, Heavy Duty Cake Boxes, Plastic Takeaway Containers, Polypropylene goods, Biodegradable Leakproof Food Containers and Kraft Round Bowls. I know branding is important, but until the supply chain sorts itself out, we are all either in the middle or the sharp end of the mess and making slightly less margin on something is much better than making 100% of nothing.
What can we do about it?
Your customers will almost certainly have experienced a similar situation in other areas of life, especially if they have tried to carry out any DIY recently. (Ask a builder how much grief they are having trying to buy a bag of cement, and what they are getting charged for it!) Many customers have actively managed swapping over to alternative styles of food packaging and delivered the change with success to their customers – and ultimately, we all need to eat.
Sorry it’s not a pretty landscape at the moment; we’re actively looking to expand our network of suppliers too, whilst offering suitable alternatives whenever we speak to our customers. As new products come online, they may differ slightly to our usual stock. (We will make of course make you aware of any significant changes!)