The fruit and veg crisis: The impact on the foodservice supply chain in the UK

Helen Henshaw - CAO
5th April 2023

The news has been buzzing about the UK’s current fruit and vegetable shortage, and it’s no surprise. Since February some UK supermarkets have started to ration certain fruits and vegetables. Unfortunate, but if you’re a fan of fresh produce (who isn’t?) this could affect you in more ways than one. But it doesn’t only affect you as a consumer (no more batch cooking those Marinaras…) but the entire foodservice supply chain.

But what exactly is going on? Why are we experiencing such a sudden shortage in fresh produce? And what does it mean for us in the foodservice industry?


Exploring the causes of the fruit and veg crisis


It is no secret that the UK’s fruit and vegetable supply chains have been under immense pressure in recent years. The introduction of new tariffs on imports following the Brexit vote, along with bad weather conditions and a shrinking workforce, has conspired to create a perfect storm for the fresh produce industry.

However, despite the challenges faced by growers and suppliers, demand for fruit and vegetables continue to rise.

Due to supply shortages supermarkets are unable to meet supply and demand, and since February, one by one they have started to ration some of their fruit and veg.


But why is there a shortage?


According to trade group The British Retail Consortium (BRC) during the winter months the UK imports over 95% of its fresh produce (mostly tomatoes and lettuces) from Spain and Morocco.

Both countries struggled with unusual cold temperatures, but in Morocco the biggest culprit for poor yields was heavy rain and flooding.

Closer to home, the UK also gets some produce from domestic growers as well as importing from the Netherlands. Sadly, due to the energy price increase, farmers in both countries have had to cut back on their use of greenhouses to grow winter crops.


What does this mean for the foodservice industry?


The fruit and veg crisis is having a major impact on the foodservice industry in the UK. Suppliers are struggling to keep up with demand, and prices have soared as a result. This is putting immense pressure on restaurant and foodservice businesses, who are having to grapple with both higher costs and dwindling supplies.

The situation is particularly acute for fresh produce. With supplies diminishing and prices rising, many restaurants are being forced to cut back on their fresh offerings or even take them off the menu entirely.

This is having a knock-on effect on suppliers further down the supply chain. For example, farmers who grow vegetables for processing into soups and sauces are seeing their orders plummet as restaurants switch to cheaper alternatives. This not only hits farmers’ incomes, but also means that there is less produce available for consumers to buy in supermarkets.

The fruit and veg crisis is causing havoc up and down the supply chain, and it looks set to continue doing so in the months ahead. Restaurants and foodservice businesses are going to be feeling the squeeze for some time to come.


The impact the fruit and veg shortage have on the foodservice industry


According to The Caterer, as prices continue to rise, restaurants continue to complain about the quality and supply of fruit and vegetables. With tomatoes and peppers on the top of the shortage list, this is a particular issue for Italian restaurants. Between January 2022 and January 2023, tomato prices has seen a staggering increase of 22.3% .

But prices soaring are not limited to fresh produce as we’ve seen prices on products such as tinned tomatoes rise with up to 400%. Some restaurants have started to adapt their menus to include for more “white” dishes. Chefs have also started to be more creative when creating their sauces to include other vegetables and a bigger variety of cheeses.

The crisis has also hit consumers in the pocket, but despite the shortages, fruit and veg prices have only gone up by 0.6% on average as a result of the fruit and veg crisis. But although this may seem a small increase, this is on top of the already 16.9% increase in food prices during 2022. For some, this could be the tip of the iceberg, as low income households already find it near impossible to put food on the table.


Measuring the economic effects of the fruit and veg crisis


The economic effects of the fruit and veg crisis are far-reaching and difficult to quantify. We know that the impact on fresh produce supply chains in the UK has been significant, with prices rising and availability falling. This has had a knock-on effect on businesses and consumers alike.

In a recent BBC article it states that in the UK the fruit and veg shortages had such a big impact that in February the cost of living rose more than expected with food prices growing at the fastest rate in 45 years.

With the Bank of England putting up interest rates 11 times since December 2021, it continues to make borrowing money more expensive to encourage people to spend less. We expect to see at least another rise in interest rates before we will see it starting to come back down.

It said the continued rise in food costs had been a big factor in February’s inflation figure, coming at a time when supermarkets were experiencing shortages of some salad items and vegetables.

The impact of the fruit and veg crisis is also being felt beyond the UK, as European suppliers have been hit hard by the reduced demand from British supermarkets. This is likely to have a ripple effect across the global economy.

The economic effects of the fruit and veg crisis are wide-ranging and complex. While it is difficult to quantify the precise impact, it is clear that businesses and consumers alike are feeling the pinch.


What’s next?


The UK fruit and veg crisis has had a devastating effect on the supply chain of fresh produce, damaging both businesses involved in the industry and consumers looking to buy affordable products. However, this can also be seen as an opportunity for government departments to promote sustainable agricultural practices in response. UK Research and Innovation’s (UKRI) recent £12.5m funding effort towards sustainable robotic farming solutions is already evident of this. You can read more about this here.

We must focus our efforts on improving food system resilience by investing in structural changes such as increased land rotation and soil fertility management so that suppliers are better prepared for any future crisis. A long-term solution is needed to ensure supply chains remain stable while safeguarding affordable prices over time; with support from all levels of government we can create more secure fruit and veg markets that benefit everyone involved in this business sector.

And hopefully soon, the rationing will be lifted, and you may be able to get back to batch cooking those Marinaras…