FNLI: Scarcity and climate put pressure on the food industry

The Dutch food industry is facing significant pressure due to increasing scarcity of raw materials and the impact of climate change. Despite a production value of €114.4 billion in 2023, the latest figures from the Monitor Levensmiddelenindustrie by FNLI show that companies in this sector are increasingly challenged by rising costs and geopolitical uncertainties. While employment continues to grow, manufacturers are struggling to balance affordable prices for consumers with necessary investments in sustainability.

Climate change and scarcity drive prices up

Despite stabilisation in overall inflation in the Netherlands, food prices continue to rise due to tax increases and the rising costs of raw materials. Dutch households have felt this in their grocery bills, which became significantly higher in 2023. However, the Netherlands still had the lowest average food prices in Europe. Nevertheless, it is expected that prices will not return to pre-2021 levels. Manufacturers remain under pressure to protect consumer purchasing power.

Innovation crucial for future resilience

According to FNLI director Cees-Jan Adema, the availability of raw materials remains one of the biggest challenges for the sector. Crop failures and other disruptions in the raw materials market continue to push costs higher, creating a need for more space for innovation and entrepreneurship. At the same time, increasing administrative burdens are limiting the agility of companies. Producers must continuously seek a balance between investing in sustainability and offering affordable prices to consumers. The responsibility to keep food affordable, without compromising on sustainability, lies with all parties in the supply chain. Maintaining a fair competitive position with other countries also remains a priority.

The FNLI calls for a reduction in regulatory pressure and more room for entrepreneurship to help the sector effectively tackle the challenges of scarcity, climate change, and price pressures.

Read the full Monitor Levensmiddelenindustrie.
Fnli.nl