Thoughts after the Anuga food fair: Uncertain times for the food industry

It’s prime time for negotiations between food suppliers and retailers. The pressure on prices is high, but food producers are determined to protect their margins as they have not yet recovered all the ground lost in previous years. On the other hand, higher prices are also resulting in lower volumes for certain categories, making any pricing decision even more complex.

Our impressions from Anuga

We visited Anuga, the largest food fair in Europe, saw all the stands and talked to several exhibitors. Below are some of our insights following the conference but we’d love to discuss these with you in more detail so please do contact us for a chat.

What we heard: About prices, volumes, and margins

Anuga takes place during the prime negotiating period for retailers/ buyers and their suppliers with regard to the purchases for the coming year. Such negotiations are always tough, but since 2022 they have been more complex than ever. Expected demand, costs for the producers, input availability, competition and bargaining power are the key factors determining final agreements.

Most agri-commodity prices are now cheaper than a year ago, but producers remind us that there are many nuances:

۰ Commodity prices do not automatically translate into input costs due to existing contracts and stocks, as producers need to buy in advance in order to secure sufficient availability.

۰ Not all input prices are cheaper: Sugar, cocoa and certain fresh products in Europe are not only more expensive but some of them are even less available.

Can food suppliers maintain their current prices?

Unsurprisingly, with lower commodity prices, there is a strong pressure from buyers to bring prices down. But manufacturers are also building their case: They point to higher labor costs and interest rates, the loss of profits taken in 2022 when they couldn’t pass their cost increases on to their buyers for quite some months, the higher price of some of their inputs and their below historic average margins. In some cases, weather events have curtailed the availability of certain inputs: Prices are less important with securing supply a key priority for buyers.

Suppliers are generally optimistic – perhaps overoptimistic – about their capacity to maintain current prices for next year. Yet some food suppliers whose final products have a strong correlation with a now cheaper commodity indicated that they have already reduced their selling prices as from the summer.

Others – confectionery is the most clear example – are even hoping to increase their prices again and for a good reason: Sugar and cacao are seeing the highest prices of the last 10 years.

Yet, such decisions are not easy and some players are concerned about the impact that higher prices may have on their competitive position if industry leaders don’t also increase their selling prices. The alternative is absorbing the higher costs themselves, which may not always be a viable option.

Declining volumes are also important in pricing decisions. As food retail prices kept rising, food sales volumes have been declining in most markets, with certain products, such as the more superfluous or more expensive items, suffering more than others. Food suppliers directly affected by such volume contraction are confronted with a difficult choice: To reduce prices and support volumes or to maintain prices to protect margins, but risk further volume losses?


It’s margins, not prices that really count

We got the impression that there was quite some margin recovery taking place at present and that suppliers may be able to protect their margins even if they had to lower some prices. This was the case for an exhibitor providing B2B inputs for further processing (think about ingredients for ready meals or pizzas). They indicated that, so far, they have been able to protect their margins, despite lowering their selling prices.

Other manufacturers indicated that their margins currently benefit from lower input costs compared to those in place when they closed their current selling tariffs. This could be interpreted as a door for price reduction but we must not forget that for some manufacturers margins are still below 2020 levels, limiting their room for maneuver.

What we saw (or didn’t see)

It was very busy on the floor but the crowds were not equally distributed: Halls hosting large suppliers were very busy. Visitors numbers at the country-oriented areas, which often host smaller companies, were more random.

There were also more stands than two years ago, but we noticed that there were fewer plant-based animal protein alternatives on show, even if it was busy at those that did attend. It seems that the number of manufacturers trying to make a place for themselves in the segment has also declined as demand projections have cooled down.

We also saw fewer products labeled as organic, to the point that some organic products weren’t even flagging their organic status on the front of their packaging. Organic products sell at a significant premium to mainstream alternatives and have been losing market share in key European markets. Perhaps producers fear that highlighting their products as organic may alienate buyers as they immediately assume that they are expensive.


Heterogeneous costs and uncertain demand trends make it complex for both buyers and sellers to close agreements for the coming year. While in 2022 price increases were generalized, the reverse trend may be more random, but we believe that it will still take place. Protecting operating profits either through volume or margin is a key priority for all, but the weakest players, those that lack pricing power, may struggle if consumer spending remains lethargic.


  • Maria Castroviejo

    Senior Analyst - Consumer Foods
    Read more
  • Cyrille Filott

    Global Strategist - Consumer Foods, Packaging & Logistics
    Read more
  • Sebastiaan Schreijen

    Senior Analyst - Consumer Foods
    Read more
  • Julia Buech

    Senior Analyst – Consumer Foods
    Read more