What should hospitality operators know about procurement in Q1 and Q2 of 2026?
Key Takeaways:
All expectations are relative to current prices.
Economic & Market Conditions: Moderate job growth, inflation around 3%, and potential Fed rate cuts in early 2026. Tariffs and a weakening dollar add uncertainty, while oil averages $52/barrel and diesel prices ease, supporting stable freight costs.
Commodity & Category Trends: Beef remains tight and costly through 2027–2028; coffee inventories pressured; poultry and eggs easing; sugar surplus expected. Food & beverage prices rise 3%–5% in Q1 and 3%–4.5% in Q2, with grains easing and coffee high in Q1.
Operational Cost Outlook: Textiles up 1%–3% in Q1 and 2%–4% in Q2; amenities flat then up to 3%. Golf equipment and turf chemicals increase in Q1; capital equipment and smallwares up 2%–5% in Q1. Disposables, office supplies, HVAC, refrigerant, and plumbing see continued cost hikes.
Why It Matters Now
Hospitality operators face a complex mix of inflation, tariffs, shifting global supply, and seasonal demand. Avendra International’s sourcing experts translate these market signals into practical, time‑bound actions—so you can protect margins, preserve guest experience, and plan capital and operating budgets with confidence.
Private employers added jobs in October for the first time since July—growth is moderate, signaling balanced labor supply/demand.
Annual inflation rose to 3% (below 3.1% forecasts). Consumer sentiment declined amid government shutdown news, sustained price pressures, and deteriorating personal finances.
Inflation likely above the Fed’s 2% target but tempered by lower energy prices, some housing moderation, and global sluggishness.
Main Impacts
Leisure & Hospitality: −6,000 jobs in October despite overall gains.
CPI: +0.3% (vs. 0.4% forecast), with gasoline +4.1% the key driver.
Tariffs, low labor supply, and a weakening dollar may erode purchasing power.
Investment banks project rate cuts in H1 2026.
Agricultural Markets
What’s New
Beef: Production is expected to decline in 2026 due to smaller herd sizes, tight supply, and rising feed costs. Despite higher prices, consumer demand remains strong. International trade negotiations may add pressure to the beef market.
Coffee Supply Risks: Global coffee inventories may stay low as Brazil faces below-average rainfall and Vietnam deals with typhoon-related risks, impacting supply chains.
Poultry & Eggs: Poultry and egg markets are projected to support lower prices into early 2026, driven by strong hatchery demand and reduced feed costs. Egg prices are forecasted at 230 cents per dozen in Q1 2026, down from 300 cents in Q4 2025.
Sugar Market Dynamics: As ethanol production shifts from sugar cane to corn, expect a surplus of sugar in global markets, leading to lower prices.
Main Impacts
Immigration policies and reduced packing plant utilization may influence pricing in 2026.
Reuters reports global shipments to European warehouses could boost inventories and ease price pressures.
Energy & Transportation Market Outlook
What’s New
Oil: Brent crude oil prices have recently increased but remain under pressure from weak demand. The U.S. Energy Information Administration projects oil prices will average $52 per barrel in 2026. Geopolitical negotiations, particularly involving Russia and Ukraine, could influence supply and pricing.
Trucking and Diesel Fuel Trends: Trucking fleets anticipate stable conditions in 2026. Diesel fuel costs, a major driver of freight expenses, are expected to remain steady or slightly lower, dropping from $3.65–$3.70 per gallon in 2025 to $3.46–$3.47 per gallon in 2026.
Container Shipping Rates: The Drewry Container Index saw a slight uptick at the end of 2025, but rates are expected to stabilize or decline in 2026 as supply-demand dynamics weaken.
Main Impacts
Oil prices forecasted at $52 per barrel in 2026.
Diesel fuel costs are projected to decrease, supporting stable freight rates.
Overcapacity and trade policy uncertainties may lead to reduced shipping volumes and lower container rates.
Food & Beverage Market Outlook
Pricing Expectations for Q1 and Q2
Food & beverage pricing is projected to increase 3%–5% in Q1 and 3%–4.5% in Q2, relative to current prices.
Overall, prices are expected to remain elevated for the next 9–12 months.
Protein Market Trends
Center of the Plate (COP) proteins face significant supply challenges and tariff impacts:
Beef prices remain at record highs and are expected to climb further in 2026, with no relief anticipated until 2027–2028.
Chicken and pork pricing is elevated but may ease in early 2026 as supply improves.
Turkey supply will remain constrained due to bird health issues, pushing prices higher.
Seafood offers better value compared to land proteins, though imported shrimp, salmon, and select fin fish face tariff-related cost pressures.
Grain and Bakery Outlook
Grain markets (corn, soy, wheat) have stabilized, and prices are expected to decline heading into 2026. This benefits eggs, soy oil, and bakery categories:
Expect Q1 price decreases for eggs and oil.
Baking category prices will remain flat to slightly higher.
Chocolate pricing, previously elevated, shows signs of easing in 2026.
Beverage Category Insights
Coffee prices will start near record highs in Q1, with some tapering in Q2.
Orange juice pricing may see relief early in the year but remains elevated overall.
Rooms Operations Outlook
Textiles (Linens & Towels)
Pricing Expectations:
Q1: +1%–3%
Q2: +2%–4%
Cotton and polyester prices remain stable through 2025, but freight, labor, and lingering tariff volatility will drive modest cost increases in Q1. Premium and luxury linens will see the largest hikes due to higher finishing and labor costs.
In Q2, long lead times (90–180 days) and inventory replenishment ahead of summer will push costs higher, with freight contributing to additional increases.
Amenities
Pricing Expectations:
Q1: No change
Q2: +0%–3%
Plastic resins, palm oil, and ocean shipping costs have stabilized, but tariffs introduced in early 2025 remain in effect. Palm oil demand is the primary concern for longer-term price impacts. If tariffs rise further, manufacturers will pass costs to customers.
Golf Operations Outlook
Golf Cars
Pricing Expectations:
Q1: +3%. Utility vehicles will rise 2%–3% depending on model. Lead times remain 60–90 days, with orders fulfilled based on order date.
Q2: No change
Golf Mowers
Pricing Expectations:
Q1: +3%–5%
Q2: No change
Turf Chemicals
Pricing Expectations:
Q1: +4%–5%
Q2: No change
Most manufacturers will raise turf chemical and fertilizer prices by ~5% in Q1. Perennial and fescue seed prices remain flat for six months.
Capital Equipment and Smallwares
Pricing Expectations:
Q1: +2-5%
Q2: No change
Import reliance and rising metal costs drove 2025 price hikes, but most suppliers have already adjusted, so Q1 impact will be minimal. Raw material, freight, and labor costs remain high yet stable. Inventory buildup and production shifts are helping offset tariffs. Prices should stay steady in Q2, though increased construction activity makes aligning scope and equipment availability critical.
Disposables Market Outlook
Disposables
Pricing Expectations:
Q1: +3.5%
Q2: +3%
Resin prices will rise due to higher feedstock costs (ethylene, propylene), steady demand from automotive and packaging sectors, and oil market volatility. Tariff implications will stabilize Q2 pricing.
Administrative & Office Supplies
Pricing Expectations:
Q1: +4%–5%
Q2: +2%–4%
Small parcel shipping increases ~4% effective January 1, 2026. ODP pricing remains flat in Q1 but may rise up to 4% in Q2.
Maintenance, Repair & Operations (MRO) Categories Outlook
HVAC Units
Pricing Expectations:
Q1: +5%–7%
Q2: +5%–10%
PTAC pricing rises due to energy efficiency mandates and smart feature integration. Tariffs and green building standards add cost pressure.
Refrigerant
Pricing Expectations:
Q1: +12%–18%
Q2: +5%–8%
Cylinder shortages drive Q1 price spikes; Q2 stabilizes as eco-friendly refrigerants like R-454B gain traction.
Electrical
Pricing Expectations:
Q1: +3%–8%
Q2: +3%–10%
Wire and cable costs fluctuate with copper and aluminum prices. Lighting and infrastructure see steady increases due to electrification and renewable energy demand.
Plumbing
Pricing Expectations:
Q1: +5%–10%
Q2: +5%–10%
Smart fixtures, sustainability standards, and construction growth push plumbing costs higher. Tariffs remain a factor.
Why Avendra International?
Our procurement specialists combine global sourcing power with local market insights to help you manage costs and maintain quality. From proteins to energy, we provide actionable intelligence and supplier relationships that keep your operations competitive.
Ready to optimize your procurement strategy for 2026? Contact Avendra International today to learn how we can help you navigate inflation, labor challenges, and commodity volatility.
Beef prices remain at record highs and are expected to climb further in 2026, with no relief until 2027–2028.
What lead times should operators expect for linens in Q2?
Expect 90–180-day lead times for premium and luxury linens in Q2 due to inventory replenishment ahead of summer and freight cost pressures.
Will diesel cost reductions lower freight rates in 2026?
Yes, diesel costs are projected to decline to $3.46–$3.47 per gallon in 2026 from $3.65–$3.70 in 2025, which should help stabilize freight rates. However, container shipping rates may remain flat or slightly decrease due to global overcapacity.
What’s the outlook for coffee and orange juice pricing?
Coffee: Near record highs in Q1, tapering in Q2.
Orange juice: Some relief early in the year, but prices remain elevated overall.
