Food and drink prices in the foodservice sector fell by 0.2% month on month in February, according to the latest Foodservice Price Index from NIQ and Prestige Purchasing, offering a brief period of relief for hospitality operators after a difficult run of inflationary pressure in late 2025.
The marginal decline follows a period of stabilisation in January. The main drivers of February’s easing were dairy and oils, where milk, cheese and egg prices fell following improved European milk availability and softer cheese demand, while oils and fats continued to moderate. A significant unwinding of cocoa price inflation, driven by rising global supply expectations, also reduced costs in the coffee, tea and cocoa category.
Other parts of the index held broadly flat. Mineral water, soft drinks and juices saw little movement, supported by stable packaging costs and softer sugar inputs. Meat and poultry balanced tight domestic beef supply against softer global pork values without significant overall change.
The picture is considerably less settled elsewhere. Bread and cereal prices rose as global wheat markets responded to frost damage and winterkill risks across parts of Europe and the United States. Fresh produce remained under pressure, with vegetable prices edging up due to crop-transition gaps in key growing regions including Spain and Morocco. Fish prices stayed high, with strict Barents Sea cod quotas keeping whitefish costs at historic levels.
The more significant concern for operators is geopolitical. The recent closure of the Strait of Hormuz has triggered a sharp rise in crude oil prices, with analysts warning that sustained energy cost increases could rapidly feed through into manufacturing, packaging and distribution across the supply chain, potentially reversing the recent stabilisation recorded by the index.
Shaun Allen, Chief Executive of Prestige Purchasing, said, “A month-on-month drop of 0.2% is a positive signal for the hospitality sector, demonstrating that the severe cost pressures in categories like dairy and cooking oils are beginning to ease. However, operators must stay on high alert. The escalating geopolitical crisis and the closure of the Strait of Hormuz pose a severe risk to this fragile stability. As oil prices surge, the knock-on effects on freight and production costs will be unavoidable. Agile and forward-looking procurement strategies are essential to navigate this impending volatility.”
Reuben Pullan, Senior Insight Consultant at NIQ, said, “After inflationary pressures across the board for hospitality in 2025, the recent easing of food and drink prices has been a rare and welcome cause for optimism. However, that optimism is being tempered by heightened geopolitical uncertainty and the knock-on impact of higher energy-driven inputs. For hospitality, this makes it more important than ever to stay close to costs and remain flexible in planning.”