Rising costs for labor, ingredients, freight, and packaging are all conspiring to put enormous pressure on the restaurant industry, and operators are looking for ways to minimize the impact on their customers. Many, though not all, restaurants have passed along their cost increases in the form of higher menu prices. Others have eliminated some items or are considering doing so as inflation is expected to persist and freight costs continue to rise amid rising fuel prices..
SFA News Daily recently spoke with Carin Stutz of Native Foods, Joe Caradonna of Caviar & Bananas, and Kris Buchanan of Goodonya about how cost increases are impacting their foodservice menus. Following is what they said:
Joe Caradonna, Caviar & Bananas, Charleston, South Carolina
It’s not only the increase in food prices, but also the price of plastic and paper — the price of a coffee cup or a to-go bowl, which is affecting anyone with a to-go business. That’s easily half of our business, and we have started to make those adjustments on our menus.
People in Charleston don’t mind spending a little more, as long as the food quality isn’t diminished, so it’s important for us to maintain quality and a high level of culinary skills in the kitchen. Our business has been thriving, but as soon as quality starts to slip, there are always other options for customers to go to instead of us.
The bulk of our business is in morning and lunch, and salads and sandwiches are heavy hitters for lunch. Salad menu prices are anywhere from about $9.50 to $13, but we are looking at removing the proteins from our salads — salmon, chicken, bacon, shrimp — because they have been so expensive. For example, we have a Buena Vista Cobb Salad that comes with chicken, and we might be looking to have chicken as an add-on.
The prices on those things have gone so high, we would be talking about adding $5 or $6 to the price of a salad to maintain our food costs. Some salads we will have to remove altogether. The price of cheese is up, and even the price of lettuce is through the roof.
We serve dinner-size salads in a 32-ounce bowl, and they look beautiful, and the last thing we want to do is to go down in size and keep the same price. That’s not going to win anybody over.
It’s certainly a new challenge. As if there weren’t enough challenges in the restaurant industry before COVID, an industry with already thin margins has to find a way to get even more slim. It definitely makes you hone your skills, and really dive into understanding your clientele, and figure out what people are going to buy. We will figure it out though, one way or the other. If we made it through COVID, we can make it through this.
Carin Stutz, CEO, Native Foods, Chicago
On the positive side, the costs of plant-based proteins were already high, and we did not see inflation on those. But everything else was up, from oil to produce, along with packaging. I think oil was up anywhere between 50 percent and 80 percent. Those numbers make it incredibly hard. Going into the year, I think I projected that our inflation on food would be about 10.7 percent, and I was way short.
We haven’t made the decision to eliminate any items based on cost. The only items that we've eliminated would be items that are just simply out of stock. We still always hold the line on having a quality product.
We did not take any price increases in 2020, which in hindsight was probably a mistake because it’s always hard to make that up. Plus, we’re in states where the minimum wage was going up about $1 each year. So, we took two price increases last year — one in May and one in December. Net-net, it was between 7 percent and 8 percent.
Kris Buchanan, founder and CEO, Goodonya, Encinitas, California
Prices are out of control, but so far we aren’t doing anything with the menu. We are just absorbing the price hikes.
The price of everything is up — food, supplies, wages. We pay $500 per week on Indeed looking for bussers, hosts, cashiers, servers — and that’s $500 per ad!
We are lucky to live in an affluent area, and we were pretty expensive anyway because our menu is all organic, which is virtually unheard of for a restaurant. But we wouldn’t have made it without the Paycheck Protection Program and some grants we received, because we got zero help from our landlord. And now, with the price of gas in California, I am just waiting for fuel charges to be added to every delivery. We are surviving, but it’s beyond stressful.
Editor's note: Is inflation impacting your foodservice menu in similar ways? Weigh in now at the specialtyfood.com Community Hub.
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