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Why food freight is still moving Blog Feature
Kevin Baxter

By: Kevin Baxter on September 7th, 2022

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Why food freight is still moving

Logistics & Supply Chain

While it's generally accepted that some forms of freight are lower on volume than normal at this time of year, food freight transport is showing little sign of slowing down. Perhaps it's making up for lost time due to shortages throughout the last couple of years that saw empty grocery store shelves and items crossed off restaurant menus - some of which still persist. Or maybe it's because even during periods of rising prices, food demand can be somewhat inflation-proof while shoppers may skip products that are less essential. After all, you gotta eat. For example, in spite of prices more than 15% higher than the same time last year, sales of chicken products of all kinds are actually up about 10% in 2022. One reason commonly cited - chicken is still cheaper per pound than other proteins. And with many families feeling inflationary pressures, it still offers better bang for the buck - no pun intended. Beyond chicken, researchers note demand for other meats, seafood, fresh, organic and prepared foods and even frozen items like fries and pizza continues to go strong. For freight and logistics pros, that means  temperature-controlled transport and storage are necessities, and that capacity is still not super easy to come by of late. Restaurant spending is a bit of a mixed bag depending on who you talk to, but these facilities also need to stay supplied as in-person dining has fully returned. Food retailers of all kinds are taking a wait-and-see approach when it comes to consumer behavior in the coming months, but thus far, people are still buying, even as costs are up.

Inflation and food costs

There's no denying that inflation has directly affected food costs, with consumers actually experiencing greater increases when stocking up their homes than eating out at the restaurant. In fact, grocery prices are up 13% year over year - the largest annual increase since 1979 according to the Bureau of Labor Statistics. Restaurants have only raised prices about half that amount over the same timeframe - at 7.6%, actually less than inflation. While food is an essential, those grocery essentials have undoubtedly gotten pricier, including:

  • Eggs up 38%
  • Flour up 23%
  • Chicken up 15-18%
  • Milk up 16%
  • Ground beef up 10%
  • Bacon up 9%
  • Fruits and vegetables up 9%

These increased food costs generally connect to inflation, but they're also affected by other factors like the invasion of Ukraine, sanctions against Russia, gas/diesel prices, extreme heat, general supply chain issues and an Avian Flu outbreak. Experts warn that even if the increases slow or stop, it will be awhile before these prices will come back down.

What about pet food demand?

Pet food is another facet of the food freight market, as it moves through supply chains. Interestingly, while there's some evidence that consumers have switched to lower-priced, store brand items for their own nutritional needs, so far, that hasn't been the case for their dogs or cats. Top retailers Petco and Chewy say premium food is still as popular as ever, with Petco even expanding its top-tier offerings. In fact, Petco CEO Ron Coughlin said one of the biggest trends in the pet industry is the shift to fresher, human-grade food - again, requiring temperature-controlled freight options - for animal family members. The better quality food doesn't come without some cost, though, as the retailers both report softening consumer demand for other pet-related items, like leashes, toys, crates and beds - though they both anticipate that to be a temporary blip rather than a permanent behavior change.

If your company deals in food freight of the human or pet variety, here at InTek Freight & Logistics, we can help. Just tell us what you need and we'll discuss how our expertise can help your business. Rather do a bit more research first? Visit our Learning Center for videos, articles and eBooks on all things freight and logistics.

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