Clandeboye boss says increase in raspberry flavouring costs having ripple effect on business
The rising cost of raspberry flavouring from Denmark is among the price pressures facing a Co Down yoghurt company, its general manager has said.
And Bryan Boggs of Clandeboye Estate Yoghurt outside Bangor warned that the eventual ripple effect of the rising costs facing all food businesses would be more expensive groceries.
Mr Boggs said delays in deliveries of ingredients from Great Britain due to a shortage of HGV drivers had also left it having to cancel customer orders for the first time in 15 years of trading.
The company supplies yoghurts to retailers on both sides of the border and recently announced a new deal with retailer and wholesaler BWG in the Republic, partly helped by the NI Protocol which has kept Northern Ireland in the EU single market for goods.
Mr Boggs said costs were soaring, partly down to the shortage of drivers. “It’s affecting us greatly when it comes to getting our packaging in and our ingredients in.
"Our milk is all local but our flavours come in from Europe and Great Britain, and our packaging comes from Great Britain as well.
"We are having massive delays on supply of those sorts of goods and it’s affecting us very badly.”
Lead times for goods arriving were tripling in some cases from four weeks to 12 weeks, which was also down to a labour shortage in production units as well as drivers, he added.
“For the first time ever, in the last 12 months we’ve let down a couple of customers where we’ve been unable to supply certain varieties for short periods of time as deliveries have been so late that we’ve run out of stock,” said Mr Boggs.
"For the first time in 15 years, we’ve short-delivered product, which is very, very annoying from our point of view and hurts your reputation badly.”
He said cost increases such as over 16% for packaging as well as over 40% for certain flavourings were “hurting very badly” and there was no end in sight.
“I honestly don’t see much change over the next 12 to 18 months. But hopefully it will level out and become slightly less unpredictable
Rising food costs were among the factors leading to a 4.2% growth in inflation over the year to October 2021.
Mr Boggs said Clandeboye had so far avoided putting prices up, but added: “The big fear is that it’s going to come through to the consumer — the costs — between energy, packaging, ingredients and labour — are all increasing very significantly.
"Like everyone, we’re trying to absorb that as much as we can but I think it is inevitable that the cost of the basket in the supermarket is going to increase dramatically in cost over the next nine to 12 months.
“Everyone is trying to manage that and absorb that but it’s so significant. The costs are increasing and it’s on everything. The worst we’ve had is a 48% increase on raspberry flavouring from Denmark.
"That level is exceptional but you’re into double figure increases on all our packaging and ingredients.”
Rising energy costs were one of the biggest hurdles — which had in turn pushed up prices for plastic-based packaging. Clandeboye Estate’s own energy costs were up by 20%. “As energy goes up, packaging always follows because of the high energy input into producing those things.”
The company is due to open a new site in January, which will include an on-farm anerobic digestion facility which will enable it to generate its own electricity.
The investment of £2m will also enable it to increase capacity up to five-fold and was a project conceived by the estate’s former owner Lady Dufferin, who died in October.
“The sad thing is Lady Dufferin’s not going to see it come to completion. We have photographs of her at the diggers as we broke ground and it was all her decision. We were very fortunate that she put things in place that would make sure that it would all carry on.”
The estate is now owned by a trust run in keeping with strict stipulations from Lady Dufferin, including that those living and working on the estate continue to do so.