So here we are in April 2022. It has been exactly 2 years since the world flipped on its head. Just as things looked like we were beginning to soar above it all, we have 2 very important contributor countries to the stability of the world’s economy at war. Sitting at this precipice of uncertainty once again is all too eerily familiar.
The decades-old symbol for the performing arts—the laughing mask and the crying mask side by side—reminds me of this. Until we have seen the performance play out we have no idea whether this is going to be a tragedy or a comedy.
This is the place we find ourselves once again. There is good news and there is bad news and a lot of speculation with not much knowledge of how to take the next steps. Only, that we were here 24 months ago, with the very same uncertainty. And somehow we survived, so at least we have that familiarity.
From the 2014 study by Psychology Today, it was determined that most people (78%) want to hear the bad news first when asked to choose which to hear first, so here is what we have on what is happing currently in the F&B markets.
Globally, it is now common knowledge that fossil fuels are Russia’s biggest export to the world, mostly Northern Hemisphere countries. Many of these countries have now imposed sanctions on Russia. They are looking at the other sources that service the rest of the world. Although everyone is denying this as the cause, a bidding war is playing out behind closed doors. This is shooting prices up. Then we have Ukraine. As the breadbasket supplying much of the globe, including Africa, with base metals, agriculture including grains, machinery, and mechanical appliances; we can see why the financial soothsayers in the Northern Hemisphere (who are a little more directly affected) are all saying the same thing, “Brace yourselves!”
In South Africa, we may be a month or two delayed from the impacts, but they are on their way. Some changes we are seeing already taking place in South Africa are the increase in maize meal, white bread, and tinned produce prices. This is having a knock-on effect on flour, pasta, porridge, and other breads. In South Africa, the exploding price of natural fuels and gas currently shelters us. But rising import costs will undoubtedly affect products like cooking oils and palm oils, among others.
A March 28th article by Bloomberg states that in India, where this impact is already unfolding, we are seeing street vendors no longer being able to afford cooking oil and as most street food is fried, this is affecting their very livelihood and a shift to steamed snacks is becoming adopted. So too, bakers in Ivory Coast are considering cutting the size of their baguettes in half with smaller topping sizes. Let us not mention what might happen to everyone’s beloved pizza.
What is encouraging to see is just how fast markets are adapting to compensate for what is happening. We do have our resilience and above-mentioned knowledge that we have been here. Finding solutions to new rapid-fire problems has been our daily existence during the pandemic. Humans never seem to run out of the capacity to evolve, shift and recalculate when faced with a challenge. It is this that will get us through yet another setback such as this one.
So, what does the data say?
In January and February this year, just as the world was opening, our food and beverage segment customers here at Skynamo showed a remarkable bounce back. Our F&B partner customers placed orders totaling the highest value in 26 months. The combined totals for January and February nearly matched all of 2020 and reached just under half of 2021’s total. Our Skynamo Industry Thermometer showed an encouraging bounce back for our food and beverage customers.
So here we are. No telling what the next 3 months, or indeed, the rest of the year has in store. But one thing is for sure. We face it together, and we have now completed our training.
Learn how Skynamo can help your field sales team maintain momentum and gain a competitive advantage as you navigate current economic pressures. Let’s have a quick chat…
