Rising costs are primarily due to the impact of challenging weather patterns on harvests.
With consumer confidence likely to remain fragile over the next 12 months, renegotiating both existing supplier terms (38%) and prices with customers (34%) were identified as two of the business strategy priorities most commonly adopted in order to manage commodity volatility.
As companies look to combat the impact of rising prices, merger and acquisition (M&A) opportunities are considered another key driver for growth. Pessimism regarding the outlook for European M&A activity in the sector has dropped from 32% to 17% over the last six months.
Conor Cahill, a corporate finance partner in the consumer business practice at Deloitte, said: “Distress driven deals are likely to provide a catalyst for activity, alongside market consolidation and international expansion.
“There are a substantial number of larger deals in the pipeline and we would expect to see the total value and volume of completions across Europe to increase over the next 12 months.”
Source: Deloitte
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