Apparently we’re in for a bumpy year. There are rumours of wars and actual wars, persistent inflation, a CO2 shortage (really?), a cost of living crisis, the lowest business confidence in years and yet again expired food being sold in Moorhouse Countdown.
It’s highly precedented to say that we live unprecedented times but 2023 is shaping up as a doozy. To be forewarned is to be forearmed so here are the top items to worry about.
Economic outlook: gloomy
Listen to the economists and they’ll have you reaching for the hard stuff. In December, food prices jumped 11.5%, the highest rise in 32 years; business confidence plummeted to a record low; and consumer confidence fell seven points – a new low according to ANZ.
Why the long economic face?
Murat Ungor of Otago University says a perfect storm of high inflation, high food prices, supply constraints, the Ukraine war and a persistent La Nina weather pattern is creating uncertainty in all arts of the economy. No one likes surprises. The World Bank says the world economy is on a ‘knife’s edge’.
Our advice: eat wisely, look for bargains and for goodness sake cheer up. Recessions are catchy.
Pork barrels ahead
With the franchise set for October, electioneering has begun. Newly minted PM Chris Hipkins has ruled out a capital gains tax and Chirs Luxon has ruled out co-governance.
As for what’s in though, three bits of politics will affect the food business:
- The grocery sector will be shaken up with the Grocery Industry Competition Bill becoming law in July. The law is designed to increase competition and drive down prices. Few are holding their breath as any gains are eaten up by inflation.
- Farmers will know sometime this year what the government will charge for greenhouse gas emissions as He Waka Eke Noa comes into effect. The scheme, watered down since its inception, is in danger of further dilution as National dances to the farmers’ tune.
- Growers, farmers, supermarkets and hospo businesses will all be affected when the Resource Management Act is replaced this year by three new Acts. The government says the new regime will streamline planning and resource use. Again, expect politics: the Nats oppose the changes and have promised to overturn the government’s plans.
More of us are hungry
Food security remains high on everyone’s agenda. Food banks are doing a brisk trade. “Some people are saying they hadn’t eaten all week, that they’d been waiting for [foodbanks] to open …and many of the people that were being interviewed were first-time coming and accessing services, which was surprising for us,” says Olivia Lange of Wellington City Mission.
Food insecurity is boosting the popularity of community gardens and may be the reason for a rise in shoplifting of potatoes, carrots and tomato sauce.
It doesn’t, though, explain the recent spate of ram raids, which has been variously put down to resale value, Tik Tok, gangs and sheer good fun. Nor does it explain why Australian Olympian Chantelle Newbery walked out of Woolies with a trolley full of goodies.
No help for hospo
Relief for restaurants post-Covid appears evanescent as the sector swaps one problem for another. Despite revenues now exceeding pre-Covid levels restaurants are struggling with profitability due to the high costs of ingredients and a chronic staff shortage. The Restaurant Association reckons the industry is short 30,000 workers. Not a great situation with the borders reopened and the Football World Cup on our doorstep.
Still, there is an upside. The shortage is driving innovations such as ghost kitchens and sourcing from local suppliers. Seasonality is back on the menu.
Supermarkets squeezed
The winners out of all this appear to be the supermarkets, with Foodstuffs boasting about the growth in Pam’s home brand, as consumers search for value over volume. But spare a thought for the dominant duo. Supermarkets say costs are up 10% for frozen foods and 24% for fresh produce. That cost has to be absorbed somehow and the bottomlines are being squeezed everywhere.
And speaking of which the result is more sober behavour at home. Foodstuffs says the cost of living crisis is driving a change in consumer behaviour. Based on current trends the growth categories this year will be convenience and pre-packaged dinners (everyone’s too busy to bake sourdough now), frozen foods, low-alcohol beverages (lo-alc wine is up 40%) and gut-friendly options such as probiotics and fermented foods.
So if we’re not at home nursing a 2% craft beer with cheap cuts and seasonally available vege, it looks like we’ll be out scouring the menu for bargains and considering a side dish of sauerkraut. Bumpy years, schmumpy years. 2023 looks like the perfect year to share the meal and the load with others. Good luck out there.
