As we enter 2025, the frozen and processed food market is entering a challenging but potentially opportunistic phase. We always prioritize providing reliable insights and solutions to our partners; the latest trends show why it is so important to be flexible as markets fluctuate. Keep reading for a deeper look into these market shifts and what they will mean for buyers and suppliers:
High Demand and Rising Prices for Key Ingredients
Demand for certain fruits and vegetables has outpaced current supply, creating shortages and price increases across the board. Weather challenges in Costa Rica and Southeast Asia, coupled with a rise in demand, have created shortages for pineapple products. Similarly, red tart cherry inventories are at 37-year lows. This unprecedented shortage will impact products that rely on these cherries, from juices to baked goods. (Source: Interpak, December 2024 Bulletin)
A takeaway for buyers: Plan ahead and diversify where you source your products. Partner with suppliers who have access to trusted producers in high-demand markets like these.
The Impact of Economic Factors
Other larger challenges are also creating ripple effects in the industry. Fertilizer shortages caused by trade restrictions have driven up costs for growers. U.S. farm income has also dropped significantly, making it harder for producers to invest in operations. (Source: Interpak, December 2024 Bulletin)
Many companies in the consumer discretionary sector are struggling to stay afloat, with U.S. bankruptcies projected to reach a 14-year high. This economic pressure could potentially impact the demand for high-value ingredients.
A takeaway for buyers: Monitor relevant economic indicators and adjust your strategies to counter rising costs and disruptions in supply.
Low Inventories Highlight Supply Challenges
Many fruits, like black raspberries, dark sweet cherries, and red raspberries, are experiencing historically low inventory levels in cold storage. Declines like this reflect a mix of past cycles of overproduction, weather challenges, and market dynamic shifts. (Source: Interpak, December 2024 Bulletin)
A takeaway for buyers: Low inventory levels like these emphasize how important it is to build relationships and secure long-term contracts with reliable suppliers who can provide consistent access to limited products like these.
How Ingredient Exchange Can Help
We understand the challenges that market volatility creates and also understand the opportunities that it can create for those who are prepared. We can support your business through:
- Global Sourcing: Access to a diverse network of growers and producers who ensure reliable supplies, even for scarce ingredients.
- Market Intelligence: We stay up-to-date on pricing, availability, and market trends.
- Strategic Planning: We help you create sourcing strategies that minimize risk and keep your operations running smoothly.
Looking Ahead to 2025
As we enter the new year, it’s clear that the frozen and processed food market will require flexibility, foresight, and strong partnerships. Ingredient Exchange is here to help you navigate these challenges and keep you one step ahead.
Reach out today to explore how we can help you secure the ingredients you need to thrive in an ever-evolving market.
This article was informed by insights from Interpak’s December 2024 Bulletin.
