Keep Your 2023 Food Costs In Check: What You need To KnowSami Pop
Unless you live in a mushroom in the woods and you have been managing to forage all your food with the help of your seven vertically challenged friends, we all know that the past couple of years has not been kind to the food industry.
In the past year alone eggs have seen a price increase of 214%, grocery prices have risen an average of 12% and fresh and dried vegetables have increased by 38.1% in the same time period. Not to mention a general increase in the cost of living, a labor shortage in the restaurant industry and rising fuel prices.
So, what exactly are all the factors that are causing these major food cost increases? And better yet, what can you be doing to assure that you are still getting the best food prices in 2023?
The 3 Main Factors Affecting The Future Of Food Prices:
Inflation And The 2023 Food Crisis
Unfortunately, the question of “will food prices go down in 2023?” seems to be a resounding ‘no!’
This is thanks to numerous factors, including droughts, floods, supply chain shortages and the general rising cost of doing business are all factors that have been contributing to increasing inflation and food prices rising in the last couple of years.
Ever since 2022 food prices have been outpacing overall inflation. In November last year food costs increased by 10.6% as compared to the previous year, while overall inflation only hit 7.1%.
Even though food prices in 2023 are expected to level out, that doesn’t mean prices are going to drop. Unfortunately, once prices hit a certain level, they tend to stay there or go up, and rarely go down. That said, we all know that price increases are normal, and prices will eventually go up on everything over time. Government food prices rising charts data shows that from 1974 to 2021, grocery prices dropped only during two years. Every other year, they went up, though some years the increase was very slight.
Major food producers, like General Mills, which makes everything from Cheerios to Blue Buffalo pet food, have already been announcing their projected food price increases for consumers this year. And unfortunately, General Mills expects that its costs will increase by 14% to 15% for 2023, thanks to the rising costs of some of their key ingredients such as nuts, fruits and flavors.
Unfortunately, all factors point to higher food costs staying with us for the foreseeable future. This means that if you are looking for you restaurant to succeed in these trying times, it’s crucial to compare costs and keep overheads as low as possible.
Higher Wages Leading To Higher Food Costs
Further tightening the profit margins of already strapped restaurants is a nationwide increase in minimum wage and ongoing labor shortages.
More than half of U.S. states will hike their minimum wage, with California’s minimum wage already rising to $15.50 an hour as of January 1, 2023.
But this is only the start, as depending on the results of an ongoing court battle, fast-food workers in California could find themselves earning as much as $22 an hour by the end of this year. And other states, like New York and Michigan will soon follow suit should the bill pass.
The restaurant industry has been struggling with a labor shortage for some years now, as low wages and long hours’ drive potential employees to look elsewhere.
In recent months the labor shortage has eased but hasn’t completely disappeared, as the average hourly wages for the industry have climbed 21% in the past 12 months.
And while labor costs are hard to cut since restaurants need enough workers to keep up with orders, other costs to keeping a restaurant open, like ingredients and electricity, have also grown more expensive, further eating into profits and it is just another blow facing the restaurant industry this year.
Not Such An Egg-Cellent Outlook For The future of Food Prices
And just as everyone is asking themselves, “when will food prices go down?”, the food industry is hit with another shortage in what has been a string of devastating shortages over the past couple of years.
Eggs, and more specifically the rising cost of eggs, has been making headline news ever since 2022 for its astronomical increases.
In January 2022 eggs cost on average $2.35 for a dozen in California, in January 2023 those same eggs will now cost you $7.37! That’s a price increase of 214%, or about $5!
This dramatic price increase is mostly due to the worse case of bird flu to ever hit the USA, even surpassing the 2015 outbreak. Since the outbreak started in February of 2022 and estimated 43 million egg producing hens out of a nationwide 420 million have succumbed to the disease.
Nationwide the average price of eggs has jumped up by 49%, this means that the same carton of a dozen eggs that cost you $1.93 in January 2022 ended up costing you $3.59 by November.
Although egg prices are set to stabilize throughout the year as holiday demand eases and production ramps up again, current unfavorable economic conditions, like high fuel prices, skyrocketing inflation and rising costs of labor means that even if some of these situations stabilize, it will take a while for those changes to reach consumers. And restaurants and consumers might only start to see a slight ease in prices by the end of the year.
How To Take Control Of Your Food Costs In 2023:
With inflation and labor struggles being paramount, and no clear sign of rising food costs easing up any time soon due to the skyrocketing food prices in 2023, the only sensible solution to helping your business during tough economic times is to cut food costs where you can whilst still maintaining your quality.
That is why you need to use a technology that understands how the food supply chain works to maximize your purchasing and bring efficiency to your business. Dine Market has what it takes with its all-in-one solution built for wholesale suppliers and restaurants.
For suppliers it enables you to sell smarter and sell more, by putting your business, brand, and product catalog directly in front of ready to buy customers.
And for restaurants it’s an invaluable tool. It is the easiest way to stay on top of your fluctuating and rising food costs that can save you hundreds to thousands of dollars a month. The bottom line is Dine Market helps bring profit to procurement by streamlining purchasing all from one centralized app by organizing suppliers, products, and real-time pricing to compare in one place. Now, every supplier purchase can be managed and tracked, helping to maintain business continuity as restaurants continue to struggle with FOH & BOH labor issues.
Here’s a look at the two main ways that Dine Market can help you keep your food costs at bay in 2023!
Dine market has the Solution: Compare Food Prices At Your Fingertips
Dine Market knows that trying to keep up with rising operational costs whilst still delivering top notch products and service with a smile is the foremost priority of any restaurant.
That’s why they have developed an easy, user friendly, one-stop-shop interface to digitize your daily orders and streamline purchasing all from one centralized app.
With the app, you’ll be able to view products you order in real-time from all your suppliers per product for easy price comparisons, ensuring you’ll never be blindsided or left in the dark by rising food costs. No matter where you are or the time of day, you’ll always have full price transparency right at your fingertips.
So, the next time a chef or a kitchen employee calls out, you won’t need to panic. Having all your suppliers, products, prices and orders in one place arms you with an advantage that saves your kitchen staff time and money. A win, win for all!
Shop Local And Keep Food Prices Low with Dine Market
The biggest drawcard for Dine Market’s easy to use take-anywhere interface must be the fact that it eliminates the annoying time-consuming need for calling, faxing, texting or going to separate wholesalers’ websites to find the best local products and prices in your area. From the convenience of your phone or computer, you can discover, shop and place orders to all your restaurant’s supplies in minutes.
Dine Market also helps connect restaurants with local wholesale food suppliers and farmers that’s key in helping to reduce and maintaining food costs. There are many advantages of connecting with local suppliers. For starters, they are usually family owned and operated, provide better service, have competitive prices, fresher products, lower minimums, make second deliveries, and available to take your calls and answer questions when needed. All these accommodations, will help your restaurant reduce operational costs and eliminate unnecessary food waste.
So, whether you’re looking for fresh produce or janitorial supplies, Dine Market is the go-to wholesale marketplace connecting restaurants to wholesale local suppliers. Start maximizing efficiencies and your restaurant margins today!
What are you waiting for? Take a look at how Dine Market can help you answer that nagging question of “when will food prices go down?”