July food price increases

Wow! Over the last six months we have seen one increase after the other in the cost of running a profitable hospitality business in NZ. Factors like the drought in Australia, our government’s generosity giving workers an additional weeks annual holiday and now the introduction of the Kiwi Saver. This added pressure on businesses to absorb these costs is huge and will have a drastic effect on an industry with such slim margins to begin with.

Knowing your true recipe costs is more important than ever and any business operating today without knowing or being able to monitor and control their raw material costs is ready for a shock.

In the month from March to April 2007, Statistics New Zealand reported a staggering 36% increase in lettuce prices. At the same time egg prices increased by 12 – 20% and a predicted shortage in grains for this year may see another increase.

Lamb prices have also seen a slight but steady increase over the last few months. Both beef and lamb prices are expected to rise going into winter with the shortage of feed.In March I reported that chicken had increased by 8%, however we continue to see these rise as other factors like the cost of diesel increase forcing freight costs up.Also the unfortunate damage caused to the Tegel processing plant in Christchurch and loss of production time while the factory was rebuilt.

Extreme weather in Australia has affected all imports and supply is short and expensive for capsicums, beans, courgettes, rockmelons and tomatoes. April to May saw a 54% rise in the price of tomatoes (average prices up from 5.54 to 8.46 per KG).

Overall fruit and veg prices have increased 16% from this time last year, meat, poultry and fish 16%, dry good 38% and non-alcoholic beverages 9%.

Herbs have also increased significantly with the cold weather. We’ve seen most herbs rise 10.00 a kilo from many suppliers. Tarragon is now out of season and you will need to rely on frozen if you choose to use it.

It’s a good time to review your pricing of chicken items. If you’re still copying the restaurant down the road’s pricing look out!Evaluate items and if they’re not performing find a way to make them. An item can easily be turned into a signature item and is something people can only get from you and is something you can charge more for.

Now available: New season yams, oranges, Thai yams, Maori potatoes and earth gems.