But these are general long-trends that people guess will impact the food industry. What are the facts? Do we actually see a real price increase in food that could potentially lead to profit for certain companies in the food value chain? Well actually yes. Facts do concur with the "wisdom of the crowd". Food prices tend to go up pretty steeply right now, which can be illustrated by the following two recent studies:
- in the US, the United States Department of Agriculture recently published a study where it forecasts a 3% to 4% price increase for food prices during 2013. (see HERE). This is in the range of double of the US inflation forecast for 2013, as published by PwC (see HERE).
- in the UK a recent study published today showed that the cost of going up increases, here again, at twice the price of the official inflation rate (article can be read
Prices growing faster in this industry than in the rest of the economy while demand remains price-ineslatic. This is a great recipe for growing margins for the major players in this industry. Which is another point why we think that companies like Treasury Wine Estates (see article HERE), Mac Donald's (see article HERE) and Nestlé (see article HERE) are companies with very interesting prospects for the years to come.