Managing food inflation: latest figures, forecasts
& smart strategies for caterers
Navigating the storm: current challenges and long-term outlook for food prices
Updated: AUGUST 2026
The global food market is currently grappling with a complex web of interconnected challenges that are reshaping supply chains and inflationary pressures.
Extreme weather events, such as the fires and droughts across Europe this summer, are disrupting harvests and reducing yields, causing volatility in both the availability and price of fresh fruit and vegetables. At the same time, geopolitical tensions, such as the ongoing conflicts in Ukraine and in the Strait of Hormuz, continue to impede grain and fertiliser supply, keeping input costs elevated for farmers worldwide.
The underlying picture remains uncertain. Rising labour costs, ongoing supply chain pressures, and upcoming supplier price increases mean the market is far from settled and pose risks for food security and product availability for the rest of 2026 and into 2027.
Currently, allmanhall are seeing proposals of 4% and under for the September 6-monthly price increases, and we are actively negotiating these down even further on behalf of our clients.
Meanwhile, IGD forecasts food inflation to peak at 5.5% for the remainder of 2026, averaging up to 4.7% across the year as a whole.
Looking at the current picture, July’s Consumer Price Index (CPI) for food, a critical gauge of inflation at the household level, stands at 1.3%. Although this has dropped slightly since June, the outlook for food prices over the coming months will continue to be challenging for foodservice operators.
Against this backdrop, allmanhall still suggest 4%+ as a sensible figure to use in budgetary planning this coming year. We will keep you updated should macro-instability threaten to increase this further.
Jo Hall, allmanhall‘s Managing Director says:“While it’s encouraging to see food inflation ease again in July, this certainly isn’t the end of cost pressures. Many manufacturers and suppliers have held off more significant price rises and cost to serve increases until September. Foodservice providers should remain cautious and continue planning for inflation towards the end of this year and into 2027.”
The past five years have seen a substantial overall increase of circa 37% in the prices of food and non-alcoholic beverages. The previous decade, this increase was a mere 9% (ONS). The food you are purchasing may well cost you ever more over the coming months and into 2027 – especially if you’re not supported by a food procurement team expertly analysing on your behalf.
This section is updated monthly so you always have the most recent figures.
Why food inflation matters
Food inflation affects every aspect of catering and foodservice operations. Rising prices put pressure on:
- Budgets – squeezing margins and limiting reinvestment
- Menu planning – making it harder to offer variety and consistency
- Supply chain resilience – creating uncertainty for both short- and long-term planning
Caterers need reliable, proactive strategies to navigate these challenges.
The main drivers of food inflation
Global factors:
- Climate change: extreme weather events and current drought/wildfires impacting crop yields in Europe
- Geopolitical tensions and conflicts disrupting trade flows
- Commodity volatility: fluctuations in oil, grain, protein, and fertiliser price
UK-specific pressures:
- Current drought conditions affecting crops such as root vegetables
- Rising energy and labour costs
- Post-Brexit import/export complexities
- Domestic logistics and supply chain constraints
These combined forces create a challenging environment for those managing catering budgets.
Smart strategies to manage food inflation
Over the past few years, the volatility of the food and beverage markets and the fragility of food supply have been evident.
Negotiations and expert insight can anticipate shortages and enable the mitigation of price increases. In addition to this, there are some simple and essential strategies that can be implemented to ensure that catering teams are managing both their sourcing and production in the most efficient and cost-effective way.
Without these, in the face of the challenge of food inflation experienced, it may be easy for costs to spiral and for food production to become inefficient, unsustainable and expensive…
1. Procurement consolidation
When managing the supply chain, there are several areas to focus on to help reduce costs and address food inflation. These are steps within the purchasing process and start with identifying the key suppliers to the catering function.
Tendering can be an effective project, used to evaluate, improve and change suppliers. The overall aim is to ensure the most preferable pricing whilst still maintaining or even enhancing quality and yield. It allows for the direct comparison of suppliers against one another based on specific criteria.
This means caterers can identify beneficial changes and opportunities. It is important to consider factors such as product specification, supplier service and delivery, commercial terms and of course price, too.
The process of tendering ensures the selection of an appropriate supplier and favourable pricing. However continuous supplier management is sometimes overlooked by catering operations, potentially resulting in complacency. Fluctuations in the food sector cause both price hikes and reductions and to anticipate, plan for and manage these, a thorough understanding and insight into commodity analysis is crucial. This ensures competitive pricing throughout the duration of the supplier contract.
In our most recent competitor analysis, allmanhall are on average 7.5% more competitive as a result of economies of scale, insight, negotiations, proactivity and the application of strategic procurement approaches.
Employing a dedicated procurement organisation to oversee various aspects, such as supplier performance management, the tendering process, ongoing pricing management, and invoice management, can play a pivotal role in securing competitive pricing and providing assurance to the catering function when meetings the challenge of food inflation.
This strategic approach not only streamlines these critical processes but also allows the catering function to concentrate on its core operations. The procurement organisation’s involvement in supplier performance management ensures that vendors consistently meet or exceed predefined contractual requirements.
Consolidating the number of suppliers within your portfolio may reduce the number of deliveries to a single site whilst also enhancing purchase volumes and delivery values. This makes it easier to negotiate preferential pricing and reduce the overall cost of goods.
And why limit consolidation to suppliers? It can also be applied to range management, where a review of your buying list can help consolidate duplicate lines. This will mean volumes on key lines increase, making your product catalogue, menus and spend more consistent. It may also flag that there are more cost-effective pack sizes or lead to identifying opportunities for less wastage.
Swapping to own brand, providing the product specifications still meet the quality and nutritional requirements including allergens, can also reduce costs and create efficiencies.
With all the above, it is important to sample products and consider all factors before implementing any changes or restrictions.
A consolidation strategy can extend to reviewing the cost to serve. This is the amount it costs for a supplier to make a delivery to site… the cost of pulling up the handbrake! By reducing the number of days per week a supplier delivers, delivery costs will be lower, with benefits passed on via drop discounts and other cost savings and efficiencies. Furthermore, the number of vehicles on site will reduce, emissions will lower, and less time will be required for on-site operations related to deliveries.
2. Menu flexibility & recipe planning
Effectively planning and managing recipes and menus can significantly support cost reduction.
Are you able to explore more cost effective ingredients without compromising the overall quality of a dish? For example, seasonal produce is often a more economical choice (and can be more nutrient-dense, too!)
A review of protein sources or adjusting meat portions, with an aim of increasing pulses and vegetable content, can also help make your menus more cost effective and ensure you get the greatest value from the food you purchase.
Regularly reviewing menu cycles based on the cost per dish helps prevent high-cost items from dominating the menu.
The proactive market forecasts and commodity updates from allmanhall can be used to plan and adapt menus based on commodity availability and pricing.
3. Operational efficiency
The next area to address for maximum efficacy is operational practices. These can be assessed and adjusted to reduce their financial impact and deliver benefits and efficiencies.
For example, ready prepped veg can be up to 50% more expensive than loose boxed veg.
However, there aren’t such significant savings available from preparing sandwiches on site and so if these were to be sourced from a sandwich supplier, time may be released to prepare vegetables. This is all about using time more efficiently and reducing the cost of the ingredients.
Measuring and reducing waste is also a consideration for any catering operation. It will inevitably help eliminate unnecessary costs as well as
helping to reduce your carbon footprint. Are portion sizes appropriate or do they need to be adjusted? Can food waste produce such as peelings or
stale bread actually be used rather than thrown away?
4. Sustainability as cost management
Sustainability is embedded across allmanhall’s approach, supporting both environmental goals and financial resilience. We help clients align sustainability with cost control through initiatives such as:
- Carbon footprint reporting and reduction planning: allmanhall supports clients in tracking and cutting Scope 3 supply chain emissions, a major contributor to catering related carbon impact, through Foodsteps.
- Food waste reduction programmes: From waste tracking software to practical kitchen audits, we help reduce unnecessary costs while lowering environmental impact. Many clients have achieved measurable waste reductions that directly translate into savings.
- Supplier partnerships for innovation: We actively work with forward-thinking suppliers offering plant-based proteins, lower-impact commodities, and packaging innovations. This helps clients meet sustainability targets while also improving menu diversity and long-term cost stability.
5. Data & reporting
Through The Pass, allmanhall’s tailored portal, clients gain access to bespoke management information, including invoices, procurement reviews, trading calendars, and financial reports. These insights enable informed forecasting and cost control.
6. Equipment
And finally, we come to equipment… whilst the initial outlay can appear expensive, new technology and catering equipment may drive efficiencies and pay for itself in time. The benefits often outweigh the initial investment and are quickly recouped.
It is essential to ensure equipment is maintained regularly to not compromise food quality. Regular maintenance can also help keep waste to a minimum and make sure excess water and energy are not used.
Practical examples
Looking ahead
Food inflation is expected to remain a key challenge throughout 2027 and beyond. However, by planning proactively and working strategically with procurement partners like allmanhall, caterers can protect their operations against volatility.
Food inflation is outside your control, but managing its impact isn’t.
How allmanhall can help
At allmanhall, we combine data, expertise, and award-winning support to help caterers:
- Gain visibility and control over costs
- Improve supplier relationships
- Reduce waste and drive sustainability
- Ensure resilience across supply chains
👉 Get in touch with your Client Relationship Manager or our support team today to explore tailored strategies for managing food inflation.
👉 Clients can also log in to The Pass for the latest data and reporting.
👉 Read Foodsight, our quarterly e-magazine, for deeper industry insights.
There are many factors that contribute to increasing costs in foodservice. With careful planning and by implementing a few key strategies from procurement to operations, it is possible to minimise the impact of these.
This blog is updated monthly to reflect the latest food inflation figures and provide ongoing guidance for caterers.