Food and Beverage Industry: The Impact of the Russia-Ukraine War
Stay tuned for the 3 measures you should take to maintain your business stability.
The war currently raging on the territory of Ukraine presents the possibility of a complete catastrophe with severe ramifications in more sectors than one. The Food and Beverage industry is undoubtedly one of them. With that being said, let’s assess the impact of the Russia-Ukraine conflict on our industry so far and what you should expect.
Overview of the War’s Impact on the Food and Beverage Industry
The financial instability worldwide, the steep increase in gas prices, and the pessimistic outlook on global trading inevitably caused quite a stir in the entire F&B world. But there is one key issue that arguably disrupted the industry unlike any other.
That’s right. Food supplies and costs, mainly regarding wheat, corn, and grain, have been tremendously impacted by the Russian invasion of Ukraine. Global wheat production is heavily dependent on both countries since they supply nearly 13% of the total quantity.
The production of grain and wheat is not the only sector in doubt. Russia and Ukraine are the largest sunflower oil suppliers – the third most-traded vegetable oil. What else is affected? Natural gas supply disruptions have turned fertilizers into a rare commodity, putting the agriculture sector on the ropes.
The complications don’t stop here. Due to the likelihood of additional sanctions on Russia, we may soon face more frequent shortages and uncontrollable soars in food prices. An eventual successful harvest in the summer and planting season in the spring is another point of concern.
Which activity sectors will be most affected? Undoubtedly, bakery and confectionery and snacks.
What to expect? A substantiate increase in the prices of the mentioned foods would mean they will be a lot harder to provide. The countries that heavily rely on Ukraine for significant shipments may have to deal with the ramifications of their dependence on foreign commodities.
3 Measures You Should Take To Maintain Your Business Stability
- Keep up with every bit of information, forecast, and report, as they will allow you to prepare for the worst with a sustainable strategy.
- Examine the details of every contract before you put your signature since a single clause regarding the supply issues may protect your business from tremendous losses.
- If you are currently dealing with financial difficulties, consider refinancing before the next interest rate hike.
