2009 Gloom & Doom Update: Economy Takes a Bite Out of Your Lunch!

2009 gloom and doom update

Like all other sectors of the economy, the food and beverage sector is also facing a crunch. The cost of food supplies has risen globally, as have costs associated with packaging and distribution. All large and small suppliers, manufacturers and vendors are facing the same issue.

At the end of the day, all costs will be transferred to the customer- the question is simply: how? The supply side faces two simple choices: increase the price or reduce the size?

In the case of restaurants and prepared food vendors, it is often easier to reduce portion size rather than increase prices. From Dubai eateries to Girl scout cookies in the US, all are becoming smaller.

In the case of basic food, global food prices have been SOARING and the news has been littered with stories of global food crisis for months. You name the country and there is a report about it. Here is a sample across the continents: South America, North America, Europe, Africa, Asia, Australia.

This has been an ongoing problem which attracted major attention last year- it’s just that we forgot about it amidst all the recent sobbing over economic woes. It is also a problem that is not going away and will be (along with the financial side) the reason for upcoming political instability in several emerging markets.

People are not interested in moral high ground and democracy mantras when they are starving and burying their children!