If the dire predictions of 'soaring' UK food inflation prove to be accurate, marketers will be called upon to exercise their ingenuity to make higher prices palatable to consumers, who have grown accustomed to lower bills at the supermarket.
The 50% rise in the cost of wheat since June, after a drought and fires devastated crops in Russia, a major wheat exporter, could push up the price of a range of foods, including bread, cakes, biscuits, meat, poultry and dairy.
Food producers are already suffering from the high cost of common ingredients such as palm oil, cocoa and soya oil, which have risen by 39%, 23% and 14% respectively since last year, according to Mintel.
Brands' options
Manufacturers and retailers will try to hold off increasing prices for as long as possible, says Phil Sutcliffe, head of the consumer division at TNS-Research International. 'Some staples are quite price-sensitive, so the first to change their prices will risk an impact on their market share,' he adds.
Food brands have several options, however. One is to reduce the pack size while leaving the price unchanged - but, as Sutcliffe warns, 'there is only so far you can go before consumers feel cheated, and that will affect brand equity'.
Instead, savvy marketers are more likely to justify price increases by finding ways to add value, suggests Sutcliffe. They could, for example, introduce smaller and bigger pack sizes for one-person households and families respectively, or offer additional benefits, such as healthier ingredients.
While consumers value honesty, however, simply telling them that a price increase is necessary because of rising commodity costs will backfire when these inevitably fall again - unless brands and retailers pass on the saving, which they rarely do, according to Sutcliffe. Indeed, he claims that both retailers and manufacturers have already taken advantage of falling commodity prices over recent years to 'build in some slack' - so any imminent increases may prove less dramatic than recent headlines suggest they will be.
Edward Garner, communications director at Kantar Worldpanel, says that the high levels of promotions over recent months among some staples - notably bread and milk - are testimony to the slack in the system.
Clare Simpson, senior consultant at branding consultancy Dragon Rouge, believes this could allow brands to hold their prices and gain 'huge PR value' as a result - providing they reassure consumers that doing so has involved no reduction in quality or pack size.
She adds that brands learned valuable lessons during the recession, when many consumers traded down.
'Our research among credit-crunch consumers found that 81% said they wouldn't compromise on taste, so would remain loyal to brands such as Heinz Beanz and Tropicana fruit juice,' she says. 'Therefore, those brands that do find they have to raise prices might benefit from reinforcing their distinctiveness in the way they present and package themselves.'
This is a view shared by Jane Ritchie-Smith, consumer marketing manager at EBLEX, the beef and lamb industry body. 'It is market demand, not commodity costs, that affects the price of beef and lamb on the shelf,' she says. 'Consumers are used to seeing prices go up and down, but rarely compromise on the quality of meat they buy. Value lines are - probably uniquely - a last resort in this area of grocery.'
Generally, brand experts believe the warnings about food inflation have been overblown. 'There's a degree of hysteria around,' says one, who suggests, somewhat cynically, that the industry itself could be 'talking up the problem' to justify raising prices.