Breakfast inflation is soaring: The cost of staples like coffee, orange juice, and sausages have risen 71% over the past two years as they become more expensive to source and deliver
- Exclusive: Breakfast inflation has dramatically outperformed headline CPI
- Orange juice has seen the biggest increase as the price of the fruit has increased by 124% since July 2020
- Spot prices for oats by 83%, pork by 80% and milk by 78%
You may have heard of the Big Mac Index, but a new index shared exclusively with This is Money that tracks the cost of breakfast staples has revealed just how much more expensive the first meal of the day is becoming.
Supply chain problems, bad weather around the world and the war in Ukraine are all responsible for a 71 percent increase in the cost of raw materials used to produce staples like oats and coffee, according to the eToro Breakfast Commodity Index.
Breakfast inflation has comfortably outperformed broader consumer price inflation – which rose 11 percent over the same period, heralding further price increases for shoppers.
Breakfast Inflation: Orange juice has seen the largest price increase, cocoa the least
Orange juice is the breakfast staple that has seen the largest price increase, with the spot price of oranges up 124 percent in two years, according to the index.
This is largely due to a particularly poor orange harvest in the US due to inclement weather and disease.
Coffee prices have also skyrocketed, rising 94 percent over the same period, again due to inclement weather in key producing countries like Brazil, as well as ongoing problems in the global supply chain.
Bacon lovers have seen pork prices soar by 80 percent since July 2020, believed to be due to higher transportation and labor costs.
Porridge has also become more expensive, with the price of oats increasing by 83 percent and milk by 78 percent.
Even those who only eat a few toasts to start the day will have paid more after a 63 percent rise in wheat prices.
Cocoa has seen the most modest rise, up just 7 percent, as a surplus kept the price lower during the pandemic.
Breakfast costs will continue to rise as companies pass the higher cost of raw materials on to consumers
The table shows that the cost of breakfast staples has risen sharply over the past two years
While raw material costs are only a portion of the costs consumers pay, such a large increase will force companies to pass on the additional costs to customers.
Ben Laidler, global market analyst at eToro, said that much of those price increases are already being passed on to buyers through either higher prices or smaller sizes.
Examples of so-called shrinkflation, in which prices continue to rise despite smaller packaging sizes, have been documented recently.
The grocer reported that the prices of three butter products – I Can’t Believe It’s Not Butter!, Flora and Bertolli – all fell, although prices in some supermarkets remained the same or even increased.
“Commodity prices have risen across the board since the Covid pandemic thanks to global chaos in supply chains and the war in Ukraine has only exacerbated this,” Laidler added.
“Add this to the inclement weather that impacted a number of crops last year and you have a perfect storm of factors that make sourcing and delivering the food on your breakfast table that much more expensive for food companies.”
This is already seeping through to shoppers as food price inflation hit the second-highest on record, according to separate figures from Kantar.
Cocoa has seen the most modest rise, up just 7%, as a surplus during the pandemic kept the price lower (Image: Women prepare cocoa beans in Ivory Coast)
According to the study, food price inflation jumped to 9.9 percent in the four weeks ended July 10, up sharply from 8.3 percent in the previous month.
Researchers saw the fastest price increases for products like dog food, butter, and milk.
Supply chain issues and labor pressures have increased costs in food production, which are now being passed on to buyers.
The rise in inflation will add £454 to the cost of food bills this year, according to the report.
Fraser McKevitt, Head of Retail and Consumer Insight at Kantar, said: “Grocery prices continue to rise to near record highs and have risen another 1.6 percentage points since last month.
“This is the second-highest food inflation we’ve seen since we started tracking prices this way in 2008, and we’re likely to surpass the previous high in August.
“All of this means people will feel the hardship in our first summer without restrictions since 2019.”
Using a barbecue as an example, buying burgers, halloumi and coleslaw for an al fresco meal would cost 13 percent, 17 percent and 14 percent more than this time last year, respectively.