In an effort to support producers in its supply chain, Riverford Organic Farmers has announced site-wide price increases averaging 5.6%.
In correspondence sent to customers earlier this month, the company said it was raising prices for the second time in a year. This is because the high production costs that have plagued the industry for the past year are still a problem.
In a letter headed "The inevitable price update," Riverford's founder, Guy Singh-Watson, stated that input costs, particularly in the labour market, had risen significantly, and it "would be fantasy not to expect growers to recoup at least some of that in price increases."
"Somehow, we need to start rewarding people for doing useful things," he added, but Riverford noted that some commodities have remained at the same or even declined in price.
Riverford commercial director Lucinda Turner stated that the company had "absorbed as much as possible while still paying a fair price to the farmers."
In an interview with The Grocer, Turner said that the 5.6% average boost was the smallest feasible increase it could offer its consumers and was a "genuine increase" needed to maintain its "committed long-term relationships" with farmers.
"It is about fairness to farmers, fairness to real living wage co-owners, growing vegetables in the right way for the environment, and that comes at a cost," she explained.
Turner noted that the company's "approach has always been transparency and honesty and our customers trust us to make the right decisions" prompted the letter warning.
She stated that "most customers understand the reason" for the price increases and have witnessed "what actual food inflation has been."