Ranjit Singh Boparan, founder and President at 2 Sisters Food Group, has warned inflation throughout the food supply chain combined with the continuing lack of labour will inevitably lead to higher prices for shoppers.
“The days when you could feed a family of four with a £3 chicken are coming to an end. We need transparent, honest pricing,” he said. “This is a reset and we need to spell out what this will mean. Food is too cheap, there’s no point avoiding the issue. In relative terms, a chicken today is cheaper to buy than it was 20 years ago.”
Three months ago, Boparan asked for help from government to help ease problems with labour. He said that while he welcomed the temporary seasonal visas for poultry workers, he had “come to the conclusion that in reality it can’t fix all the problems, nor can it control inflation.
“We need to be honest about the long-term implications,” he added.
“Less labour means less choice, core ranges, empty shelves and wage inflation, and this isn’t going to change. We need to work with our supply chains and customers to solve these issues, but it will come at a cost. At the same time, I need to invest, increase automation and make our factories more welcoming for new recruits, which are longer-term goals. But right now I need to be honest about what this means for the consumer as inflation could reach double digits.”
Boparan outlined the inflationary challenges throughout the supply chain that his business was coping with. Feed costs are up 15%. Even the less visible commodities have risen by 20% – feed diet supplements, wood shavings for litter; disinfectants; veterinary costs; wages have risen 15% in a year, he said.
The HGV driver shortage has sparked wage inflation in the transport sector that is passed on; this is in addition to fuel costs which are now at their highest rate since 2013.
2 Sisters has 600 farms and 16 factories, employing 18,000, all of which are facing soaring energy commodity costs, up 450-550% from last year, said Boparan.
Carbon dioxide, critical in the processing of poultry and for packaging, has risen in price 4-500% in the past three weeks. Despite the Government deal to ensure supplies are maintained, costs have spiralled to levels never seen before, he said.
The cost of food packaging, such as cardboard items and aluminium foil, has also risen by 20% in the last six months.
“Inflation is decaying the food sector’s supply chain infrastructure and its ability to operate as normal,” said Boparan. “That’s from farm to your plate. There’s hundreds of farmers out there struggling, and they need our support just as much as anyone. Talk of ‘year zero’ might sound dramatic, but these are the facts: we really have to start thinking differently about what our food priorities are and what they cost.”
“I’m optimistic about our chances of seeing this through, and it’ll need a lot of hard work with everyone from our suppliers, their suppliers, to our customers and the consumer. But I think there’s a willingness to work together and sort this now, rather than waiting and seeing the British food sector wither and die. I don’t want that to happen – I want to be one of the first to face into a crisis that’s not going away and solve it.”