As significant uncertainty around the Strait of Hormuz persists, the impact on the global oil market has been well-documented. Less emphasis has been placed on the food and packaging sectors, where disruption has forced many firms to reshape their supply chains.
Supply chain shocks can take various forms, including pricing, quote validity and shifting allocation behaviour. When shipping becomes less predictable, businesses importing goods that require controlled or time sensitive handling are often hardest hit. Alongside this, rising oil prices have a knock-on impact on the price of goods that require energy-intensive production processes. Due to a combination of these factors, the food and packaging sectors are navigating a period of prolonged uncertainty.
For procurement professionals, the message is clear: The risk lies in waiting for the storm to pass, instead of taking proactive action. With any supply chain shock, the most effective solutions are often no longer available once businesses begin feeling the full impact. We’ve seen these businesses adopt a host of risk-mitigation strategies, with the most successful turning to exposure mapping, scenario testing and proactive supplier engagement.
Logistics volatility and oil-related cost pressures are already feeding through into supply chains. Despite the general resilience of food supply chains, the cold chain is under pressure. While frozen, chilled, bakery, dairy and certain protein categories have all been affected, fresh produce is particularly exposed.
Early-season fruit moves on very tight harvest to market windows, meaning that even small delays risk missing the quality peak. In Europe, this has pushed buyers toward closer origins, which raises early season costs. But for U.S. fruit buyers, the exposure is different. They already purchase significant volumes from Mexico, Central America and California, so the impact is more about global price sentiment than physical supply.
Packaging is a sector where logistics volatility and rising energy costs have combined to create serious disruption. For example, the production of resins requires significant petrochemical feedstocks, while that of aluminum involves energy-intensive processes. Procurement professionals must understand both energy exposure and contract structures, and determine what specifically is built into their current pricing, what could trigger changes, and how quickly they can pass through.
While resin suppliers are signalling upward pressure, aluminum is following broader cost trends, and processing-heavy food categories are reassessing costs. In more concentrated areas, price effects can be sharper. Saffron provides the clearest example of this, with around 90% of global saffron supplies emanating from Iran.
Where credible alternatives exist, the most effective mitigation strategy is multi-origin sourcing. Diversifying suppliers can eliminate over-reliance on single geographies and build resilience. And, by allowing some specification flexibility, deepening supplier engagement and enagaging in scenario testing, businesses can be better prepared to absorb shocks.
As a result of the current disruption in the Strait of Hormuz, businesses are prioritizing stability. Suppliers with stable processing, predictable transit routes and credible contingency plans are increasingly sought after, especially among food and packaging businesses with tighter handling requirements. Fresh produce buyers, for example, are taking a more cautious stance on early season sourcing, shifting volumes earlier toward closer to market origins to protect quality.
At the same time, businesses are making a number of common mistakes. One is focusing only on direct sourcing, while missing indirect exposure through oil-linked inputs, freight markets and upstream supplier behavior. Another is accepting every cost increase as inevitable. While some pressure will be justified, some may be opportunistic.
Amid this backdrop, procurement teams need to challenge assumptions, understand cost drivers and assess whether proposed increases reflect actual exposure. Structured supplier engagement is now critical, as effective conversations go beyond reassurance and focus on exposure to transport, energy, feedstocks and upstream capacity, as well as the assumptions behind current pricing and potential early-warning indicators. Under pressure, suppliers prioritize customers with clear demand signals, credible forecasts and strong relationships.
The future for the food and packaging sectors remains uncertain. Costs linked to logistics, processing and feedstocks are likely to remain elevated for some time, feeding into prices. Food inflation will be more selective, driven by processing intensity, grower inputs and logistics rather than broad raw-material scarcity. Packaging inflation will be most visible in resins and aluminum, while niche categories such as saffron require specific attention due to limited alternatives.
To give their businesses the best chance of navigating the volatility, procurement professionals must prioritize visibility into where logistics and processing exposure sits in each category, diversification, and structured supplier engagement. While businesses that act early won’t insulate themselves from the disruption entirely, they will be better placed to maintain a consistent supply of goods.
While narrow supplier bases, low inventories and rigid specifications can serve businesses well in normal times, they limit flexibility in times of crisis. This highlights the importance of forward planning and risk modeling, as businesses must understand the cost implications of any fragility in their supply chains. Emergency freight, spot buying, reformulation and service disruption must all be accounted for. Only then can businesses obtain a holistic view of their risk profile, and take the necessary steps to protect themselves and their customers.
Jordan Kear-Nash is principal consultant at Proxima.