Food prices must increase or jobs will go, warns Ulrick & Short boss

LEADING ingredients supplier Ulrick & Short has called on food retailers to pass on higher commodity prices to customers or risk food manufacturers going bust.

The warning comes amid rocketing raw material costs which Pontefract-based Ulrick & Short said will force food manufacturers to shut down unless supermarkets take a more long-term view of the situation.

Ulrick & Short’s co-founder and director, Adrian Short, said: “We have got to be careful we’re not too short-sighted. This period won’t go on forever. It’s a combination of everyone having to accept they pay a bit more for goods. If we don’t, factories will close.”

Hide Ad
Hide Ad

He added that the only way forward is for manufacturers to pass on some of the costs to retailers, who then pass some on to customers.

“Everyone has to take a bit of the pain along the way,” said Mr Short.

The views are likely to prove controversial at a time when supermarkets are seeing a fall in sales after robust growth throughout the recession.

The Co-Operative recently said there is “absolutely no growth” in the grocery market at the moment.

Hide Ad
Hide Ad

The Co-op, which is the fifth biggest grocer in the UK, said promotions now account for 50 per cent of sales – a new record – as shoppers try to find ways to make their cash go further.

Leeds-based Asda’s latest income tracker research shows that family spending power has plummeted this year.

Asda’s chief executive Andy Clarke said: “Asda Mums tell us it’s never been tougher out there as they juggle the competing pressures on their finances.”

In a bid to alleviate the pain felt by food manufacturers, Ulrick & Short is calling for the use of more economical crops as an alternative to better-known ones such as maize, wheat and tapioca.

Hide Ad
Hide Ad

“The road to recovery should not be looked on as a bleak experience, but one of discovery and invention,” said Mr Short.

“It is during these turbulent times that the innovative use of ingredients should come to the fore.”

He said that more economical crops include sweet potato, arrowroot, flax and various rice derivatives such as glutinous rice.

“These unusual or old-fashioned alternatives can give much better value for money,” said Mr Short. “They are more economical to process.”

Hide Ad
Hide Ad

He added that it is becoming increasingly difficult to find GM-free maize and soya crops, making alternatives increasingly attractive.

Despite the downturn, Ulrick & Short has refused to go down the route of adding additives, e numbers or chemicals in order to lower prices.

“You can buy a ready meal for 99p and get another one free, but if you read the ingredients they are full of modified starch and e numbers. We have a ‘clean label’ product, which means no additives, no chemical and no e numbers.”

The company hopes that by educating food producers about alternative raw ingredients, significant cost savings can be made at the manufacturing stage of the food chain.

Hide Ad
Hide Ad

This would mean that less of the financial burden has to be passed onto retailers and consumers.

Ulrick & Short has come up with a number of trade-marked products that can replace more expensive raw ingredients such as eggs and butter.

At a time when butter prices have risen by 20 per cent over the past year, the group’s Delyte brand, which is made from tapioca, can replace up to 50 per cent of the butter in cakes. It claims that this is without any detriment to taste or texture.

Delyte has 10 per cent of the calories contained in butter and is half the price.

Hide Ad
Hide Ad

Its Ovaprox brand, which is extracted from wheat, can partially replace eggs in order to reduce costs.

In conjunction with Leeds University, it has also launched an additive-free bakery glaze for pastries. Mr Short said that most of the hot-cross buns eaten over Easter featured its Eziglaze bakery glaze.

Ulrick & Short believes that food producers must innovate, develop new products and look at tapping into new markets in order to secure their long-term sustainability.

Many producers, such as bakers, have traditionally prided themselves on artisan production methods and have been reluctant to move away from recipes that have been handed down through the generations.

Mr Short said that in these uncertain times, the sector has to change and becoming more imaginative.