Producers will continue to face commodity price pressures in 2013

Producers will continue to face commodity price pressures in 2013

Rising commodity costs this year will leave drinks companies “thirsting for growth”, a new report has claimed.

Rabobank's Global Beverage Outlook study, released today (30 January), warns that companies must ensure "security of supply" and develop an integrated supply chain to guard against price fluctuations. Manufacturers can no longer afford to focus solely on lowest price when buying commodities, the report said. 

“Rising commodity costs will impact all drink segments and likely force beverage companies to raise prices at a time when consumers are already under economic pressure,” the report said.

“Faced with narrowing margins, those beverage companies that have a vision and commitment to engage in strategic sourcing will have a competitive advantage in 2013 and beyond.”

The wine industry will face tighter global inventories, forcing suppliers to be more flexible while waiting for inventories to bounce back, the report said. Juice suppliers, meanwhile, will move to secure supplies through investment in growers or ingredient substitution, according to the study.

For beer, the report predicted that the sector will post the slowest growth this year compared to other beverage categories, driven by market saturation and health concerns.

Spirit consumption in Western Europe is also expected to wane, the report said.

In soft drinks, the Coca-Cola Co and PepsiCo will shift focus to brand building and marketing while upping efforts to offload bottling assets to strong franchise partners, the report said.

A Rabobank report in October said demand for wine in the US is growing and helping to balance out long-term oversupply issues.

Expert analysis

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