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Tips for surviving food inflation

05 June 2008 by
Tips for surviving food inflation

With daily news of food shortages across the globe, and prices shooting up as a result, it might seem as if those trying to balance the books in the kitchen have an impossible task. But as Tom Vaughan shows, you can dodge the big increases with a smarter approach

Food riots have caused fatalities in Somalia, Cameroon, Egypt, Haiti and the Ivory Coast. Last September Milanese residents protested against the rising cost of pasta, while Mexico played host to the pithily titled Tortilla Riots in January 2007.

As for the UK, we may be some way off the Putney Cheese Riots, but spiralling food costs are putting increasing pressure on producers, suppliers and operators on these shores. Overall, prices have risen by about 8.5% from this time last year.

So should chefs and owners put up their prices by an equivalent amount? Food service consultant Chris Stern says there is no other way. "Food is more expensive in the supermarkets now, so customers should expect to pay more when eating out. It's a bit of a no-brainer."

There are some who disagree, however. Peter Backman, managing director of hospitality consultancy Horizons, says those businesses raising tariffs will be shooting themselves in the foot. "Because of the current financial climate, customers will not want to spend more on food than they did last year," he says. "A couple who last year ate out twice a month will only do so once a month now if tariffs are higher. Cost saving, not raising tariffs, has to be the answer."

The question is: how easy is it to keep prices low without ending up out of pocket? Here are five ways to help circumnavigate food inflation without passing higher prices on to the customer.

1. Scrutinise your menu

The message is simple: study your menu and eliminate extortionate ingredients. As Matt Tough, sales and marketing director of food service consultancy PSL, says: "A dish doesn't have to have fillet steak in it to be good". With the luxury beef cut now costing about £23 per kg, its appearance on a menu is going to leave either restaurant or customer out of pocket. Cheaper cuts and seldom-used French cuts could substitute for pricier steaks such as fillet and rib-eye. (See next week's Caterer for an in-depth guide to using cheaper cuts of meat).

One of the first things PSL does when brought in to help a company is to scrutinise the food served. A thorough appraisal of ingredients can strip 8-10% off the cost price of a menu.

Stern says that the first reaction to food inflation should be an objective study of your offering. "Look at the menu and mitigate the problem. See what ingredients you are using and consider whether they are worth the high price," he says.

Substituting pricier items is simpler for some types of food than for others. It's not so easy to find a replacement for bread or eggs, but fillet steak can be swapped for a well-cooked entrecôte cannon or rack of lamb for shoulder of lamb. With meat and poultry prices up 35% from this time last year, one piece of advice PSL has been dishing out is to save money on protein but luxuriate around it. For example, instead of beef fillet, use a cheaper cut - but serve it with wild mushrooms.

2. Play suppliers

If you don't know where the market is placing the price of different ingredients, it's easy to overpay for them, Tough says. "Benchmark a range of suppliers and corroborate your findings with market research," he adds.

Anthony Demetre, co-proprietor of Michelin-starred London restaurants Arbutus and Wild Honey and champion of unfashionable cuts and cheaper ingredients, says he has six different suppliers for each of his produce categories - meat, fish, fresh and specialist. "You have to play them off each against other constantly," he explains. "Every day we get market reports and it's staggering the prices suppliers quote sometimes. So I'll use the price from one supplier to drive down another. Often, they'll agree to give me a lower price if I take a certain amount. It's a constant bartering." That's one of the reasons Demetre is able to offer his much-heralded, Michelin-starred three-course meal for £17.50.

Market reports and benchmarking services:

3. Simplify

High yield from ingredients is essential. Placing items such as tourné potatoes or courgettes (those cut down to a more uniform shape) on a dish is crazy, says Tough, as they yield about 50% from the whole vegetable. "Every time a chef puts a knife into a vegetable they're costing their operation money," he says. "You can end up spending four times as much on a tourné courgette as a simple roast one. Joe Public won't care what shape a vegetable is, so long as it is well seasoned and tasty."

In a similar vein, with dairy prices spiralling, it's prudent to reduce the amount used in the kitchen. Instead of old-fashioned cream sauces, switch to a reduced jus and cut down on the amount of butter thrown in.

"Don't overcomplicate things," Tough says. "Rely on three or four quality ingredients per menu choice."

4. Stay seasonal and local

Although the origins of the local, seasonal movement lay in supporting farmers and championing UK produce, it can also be cheaper to buy from local suppliers. With high fuel prices being a main cause of food inflation, cutting out the middlemen in getting food to plate reduces road miles and ensures less money is spent on transport. To boot, produce coming from Europe will be expensive because of the strength of the euro against the pound.

Charlie Hicks, owner of a vegetable supplier firm of the same name, explains that a natural reaction to the current climate will be more careful sourcing: "As we go further into food inflation, I think we'll see more people buying locally and seasonally to cut out additional costs."

Of course, switching to a bijou local supplier isn't easy if you operate a big chain, but it's perfectly possible to reap the benefits of switching to a more flexible, seasonal menu. Owing to the abundance of a particular produce when in season, buying in this way can save a great deal of money. "Ignore the first of the crop," Hicks says. "Things like new-season asparagus will naturally come at a price. Wait instead until produce is in full swing and you will be able to pick up bargains."

The difference in price between produce in and out of season can be colossal. The price for large sea bass can double from £10 per kg in season to £21 per kg at other times of the year, turbot from £17 per kg to in excess of £30 per kg, and wild salmon from £10 per kg to £50 per kg.

Good seasonal guides:

  • Seasonal Food by Paul Waddington
  • A Cook's Year by Gregg Wallace
  • A Year in My Kitchen, by Skye Gyngell
  • The River Cottage Year, by Hugh Fearnley-Whittingstall

5. Good housekeeping

Where the USA leads, the UK tends to follow - about six months later. Food operators on the other side of the Atlantic have been forced to cut portion sizes and raise prices. But they've also had to improve the way they treat more scant resources, with a particular focus on wastage. Peter Backman at Horizons recently investigated this trend in the USA. "Good housekeeping is really important there now," he says. "Americans have been blessed with cheap food for too long. It's about cooking what is needed, not just chucking stuff in the pot when it is bubbling."

You have to take time to understand the flow of an operation, says PSL managing director Ivan Shenkman. "It's about knowing how many people you are going to feed," he says. "If you know Monday is going to be quiet, prep accordingly. Don't buy too much and don't buy off spec. Order little and often."

Keeping pre-inflation tariffs and not ending up out of pocket is no easy feat. It will take a great deal of operational focus and a constant monitoring of the market to circumnavigate any rises. But, says Shenkman, it is not impossible. "We all know food inflation is bad," he says, "but we all have it within us to manage this and not increase either our own food costs or the price to the customer."

Why the price of food has gone up

Oil price rises

The pivotal role of oil in producing and delivering crops and livestock means that oil price rises will naturally inflate the price of food. In 1998, oil was trading at $20 a barrel a decade on it has shot up to $100 a barrel. Some commodity brokers are even betting on that price doubling in the next decade.

Biofuels

In an attempt to break its reliance on the Middle East for oil, the US government has backed production of the biofuel corn ethanol for use instead of petrol or diesels in cars. The current target is for 15% of fuels used on US roads to be biofuels by 2017. However, this means that land that could be producing corn for food has been switched to producing vehicle power. Some reports suggest that the amount of maize needed to produce enough oil to fill a 4×4 vehicle could feed a family of four for three months.

The nutrition transition

A financial boom in India and China has seen more people switch to a predominantly meat diet. According to research by Goldmann Sachs, meat consumption in India is up 14% over the past 15 years, while dairy consumption is up 200%. It takes 8kg of corn to produce 1kg of beef or 4kg of pork - in other words, producing meat takes up more resources.

Climate change

Widespread flooding in the UK and much of northern Europe last year had an effect on harvests, while a heat wave in southern Europe caused havoc. Droughts in Australia mean that the wheat harvest is only half of what it should be.

How prices have changed…

  • Total food prices: +8%
  • Fruit and vegetables: -2%
  • Meat and poultry: +35%
  • Seafood: -5%
  • Dairy: +30%
  • Fillet steak: +60%
  • Whole chicken: +25%

Figures for May 2007 to May 2008

Recommended suppliers

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