2014 has seen a significant increase in food prices so far, affecting both the home consumer and food businesses. Drought in California has affected farmers as well as cattle herders, leading to food prices rising across the country. Raising cattle has become more expensive as water and grain prices rise. The higher prices of raising cattle have made it extremely difficult to buy meat at the price it once was. A recent article from CNN claims that beef prices have risen 56% since 2010. Such drastic changes in the numbers have a direct effect on food businesses, who must respond by finding beef alternatives or raising prices. Quite a few businesses have already found creative solutions designed to keep profits up, while keeping customers satisfied.
Balancing Beef Options on Restaurant Menus
The most obvious solution to the rising beef price per pound is to replace some of the beef options on restaurant menus. Since beef is a consumer staple, restaurants should be wary about completely eliminating it from the menu. However, adding more alternative protein options such as vegetarian entrées, or other meats such as chicken, can lower the overall menu food costs. Reducing portion sizes of beef dishes is another cost-shaving option. However, in this case, businesses must ensure that customers are not disappointed with smaller amounts of food on the plate. Adding creative, gourmet, homemade side dishes containing more affordable ingredients can fill in the gap where extra beef had been. For example, a medium burger with aioli, homemade onion rings, French fries, and house coleslaw will often be more attractive to customers than a standard large burger and fries. Another alternative option for ensuring restaurant profits is simply to raise the prices on restaurant menus. By raising prices of all dishes on restaurant menus, venues can account for food prices rising, yet maintain their restaurant profit overall by making a slightly larger profit on some menu items and a slightly smaller profit on others. Changing restaurant menus to match the beef price per pound and cope with rising food costs in general, will ensure that restaurant profits stay up.
When considering how to change restaurant menus to fit the food prices rising, business owners and managers must keep in mind that food prices are rising across the board, not only for beef. Consumers are also affected by the price increases in supermarkets, and therefore may be more forgiving to the idea of food prices rising on restaurant menus. However, in order to maintain restaurant profit, businesses must find a way to market their dishes and price them to attract customers despite rising food costs. Whether the solution is to offer more beef alternatives, smaller portions, or simply to raise menu prices, depends on the target audience and business concept of the venue.