In a normal year Food Price Inflation will run 2% to 4%. Over the past year, the industry has experienced double-digit inflation. Foodservice inflation for quarter two 2022 came in higher by more than 15%. Many factors are contributing to higher prices. Among the most important are:
Gasoline prices are top of mind with the consumers while Diesel prices are a key cost component of getting product from manufacturers to distributors and then on to foodservice customers. As Gasoline and Diesel prices have inflated – all energy prices have risen, and those higher costs are key input costs being felt at the farm and manufacturing levels of the supply chain.
Avian Flu entered the U.S. this, Spring via migrating birds headed North, and has affected the Turkey, Chicken and Egg markets. As of September 9, 2022 44 million infected birds have been destroyed this year as Federal & local government agencies, farmers (both egg and livestock) and poultry producers worked to limit the spread of the disease. To make matters worse, southern migrating birds are beginning to infect birds in their flight path this Fall. Needless to say, Avian Flu is having a major impact on prices and product availability
Grain prices are higher by more than 20% and that translates into higher animal feed costs and higher shortening prices. Projected full-year inflation for protein: 15.4% for Beef, 5.2% for Hogs and 51.1% for Chicken. Soy Oil climbed 91.8% last year and is expected to climb almost 20% more this year.
We are expecting inflation to continue, at higher than historical rates, for the remainder of 2022.
If you haven’t yet increased your menu prices, you should consider price increases. According to the National Restaurant Association, menu prices increased 7.4% at fast food outlets and 8.9% at in June vs a year ago.
Countering this type of food cost inflation calls for a review of all controllable expense categories - not just food cost. Because controlling food costs in a hyper-inflationary period requires multiple actions, we have developed this exclusive website that contains tips, advice, ideas, and references to help you impact your bottom line. Many of the changes you have already made and will continue to make to your processes and procedures will serve you well when inflation moderates. The right choices now will pay dividends well into the future.
We will continue to add content to the site, and we welcome your ideas – simply hit the “Share Best Practices” at the bottom of any page and share your ideas – we will add new ideas so everyone can counter inflation.