Serving high quality produce to differentiate from an at-home experience is a key opportunity for hospitality businesses amid the cost of living crisis, according to hospitality buying specialist Lynx Purchasing.
Venues can encourage spend by adding value to menus rather than cutting margins, with higher prices here to stay, the business said.
It further provided an overview of ingredients and their near-term price outlook.
Beef and pork
The continuing high cost of rearing cattle is keeping beef prices up, with the demand for mince and popular cuts rising as barbecue season kicks in, with pork prices also at high levels due to strong global demand.
Poultry
Restrictions on poultry have been introduced in many countries due to concerns about avian flu, causing consistently high prices for chicken, turkey, and duck. Suppliers also expect egg production to take some time to return to normal levels as a result.
Dairy
Milk, butter, and cheese have started to decline in price following an increase in global milk production, which will also help reduce the price of manufactured products with cream in due course.
Fresh produce
The availability of fresh fruit and season produce should improve across the summer, with the government increasing the number of migrant agricultural worker visas by a further 10,000 this year.
Potatoes
Hot weather last summer has led to a poor harvest with extremely low yields of larger potatoes. Frozen chips and potato products are now seeing sharp price rises as food manufacture becomes impacted by quality issues.
Oil
Prices for rapeseed oil have begun falling as this year’s crop becomes available, while sunflower oil remains the less economic option due to the war in the Ukraine – made worse by the flooding of arable land after the recent dam destruction. Droughts have affected both prices and supply of olive oil.
“There are some very difficult choices for operators ahead. It’s either keeping menu prices low, or serving high quality produce that offers consumers a genuinely different choice when compared to eating at home. Consumers may be going out less often, but many are looking for better quality when they do,” Lynx Purchasing managing director Rachel Dobson said:
“We’re starting to see some price improvements on products that have seen the biggest increases, such as dairy and oils, but higher food costs are here to stay. Once consumers start to feel more confident about spending, the opportunity for hospitality will be to add value to menus, rather than cut margins. In addition, showing support for British food producers has genuine customer appeal.”
Dobson said that in the current market, trying to compete with the cheapest place town for eating out was ”a race to the bottom”.
“Poor quality produce also contributes to food waste, for example by loss of yield during preparation and cooking, or simply when indifferent-tasting food is returned uneaten on customers’ plates. There is a real opportunity for operators to forge partnerships with British food producers and make eating out a genuinely different experience,” she added.
