Raw material prices remain one of the most pressing worries for food manufacturers, as sky high prices for certain commodities have repercussions through the markets. Who would have thought oil fields could impact beverage stability, or that the popularity of bell peppers could determine the fate of beetles used for red food colouring?
This butterfly effect calls for careful management, and wise firms learned from the 2007/8 peaks and put in place cost control strategies and new contractual arrangements.
In some cases, however, high prices for one raw material can yield new opportunities for another, and stimulate innovation from ingredients suppliers.
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