Commodity Chat

In a pickle…volatile raw material costs

For British food companies, these are uncertain times. Brexit looms large and worries about the future labour market are clearly top of the agenda for Boards up and down the country. The 2018 annual food and drink report from the advisors BDO asked the UK food industry ‘What are the top 5 risks and challenges in the next year?”

Perhaps it should be no surprise to see Brexit at the top of the list, followed by pricing pressures from customers and retention of labour. Brexit and its effect on the labour market is clearly a huge issue for both our farming and food clients and we can only hope that over the coming months we start to see some more progress being made, so we can all start to plan with more certainty.

graph showing volatile raw material costs at 34%

While Brexit will almost certainly present a risk for the foreseeable future, 32% of all British food businesses put volatile raw material costs as the biggest risk to their business. In 2017 it was the listed as the single biggest risk to the profitability of British food businesses.

Volatility risk may have been knocked off the top spot by Brexit this year, but it remains a constant and unyielding threat.

Despite the scale of the problem, there has been a noticeable lack of product innovation from either insurers or the risk management industry. It was into this vacuum that Stable began work in 2015 to make insuring your business from volatile raw material costs simple, affordable and low risk. Our global index insurance platform was designed for agri-food business of every size and sector to protect their business from commodity price falls or volatile material costs.

The platform works in just 4 simple steps:

  1. Click an interactive map of the world to find a relevant commodity index that we insure.
  2. Get an index insurance quote from global underwriters to protect your organisation from a rise in raw material costs over the next 3-12 months
  3. Manage all your insurance contracts in one easy to use cloud-based dashboard
  4. If the index price rises above the floor price you selected, then at the end of the contract Stable replaces your lost income automatically.

There is no hedge accounting required and no claims process. Together with some of the worlds largest insurers, we built an innovative new platform to insure your business from this constant and significant risk.

To find out more or to book a demo, please call us on +44 (0) 203 934 6892 or email hello@stableprice.com and we can show you how food businesses around the world are using Stable to protect their balance sheets.

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