The cost of food products that chain restaurants use will increase overall by 2 percent in 2014, according to the newly released purchasing cost outlook by SpenDifference LLC, the growing chain-restaurant purchasing cooperative. The increase is a slight improvement over this year’s costs. So far in 2013, overall food costs are up 2.6 percent. For the last five years, the total inflation rate has been 7.1 percent.
The price of corn is forecast to drop 20 percent in 2014, offering relief on poultry purchases, except for wings, which will experience a minimal increase of 2 to 3 percent. Expected decreases in breast meat are 5 to 9 percent. The cost of pork bellies, after achieving a record high this year, is expected to drop 13 percent in 2014. Other pork items will also see some relief, averaging about a 4 percent decrease compared to 2013. Beef, due to the growth cycle, will not recover until mid-2015 at the earliest, with a modest increase of 2 percent in costs expected in 2014.
“Our analysis of food-cost inflation illustrates that menu mix is the critical element in controlling costs,” Rose says. “If chain restaurants have flexibility in their menu offerings, one way to combat increases in food cost is to focus on pork and poultry, except for wings.”
Based in Denver, SpenDifference LLC, partners with emerging to mid-sized restaurant companies, providing full-service supply chain support. It currently works with about 20 national and regional chains that represent nearly $1 billion annually in purchasing.
