Q3 2021: cost pressures reverberate across UK meat and poultry

Volumes soared by “anything up to 100%” during COVID-19 lockdowns and the overall market is still up by 10-15%, we heard in an Interview with a former divisional leader at Sainsbury’s Supermarkets Ltd. In fact, demand for red meat is at levels seen five years ago and “there’s nothing to indicate at the moment that this will change in the short term”. Sustained levels of home working have prompted a structural shift towards meals made from scratch, which, as we were told, “supports the meat category across the board”. 

However, the industry is one of many facing heavy cost pressures thanks to a combination of rising commodity prices (the price of wheat has risen by EUR 40-50 a tonne over the past year), supply shortages, labour inflation and the lingering effects of COVID-19. While many commentators expect such issues to be temporary, Forum Interviews suggest tensions have been building across supply chains — some of which pre-date COVID-19 and could persist as long-term risks to companies.