For all of us, the question of the day is always; ‘How do we manage this, get ahead of it, budget appropriately for the future?’ As food service operators, managing costs have always been a challenge that requires daily checks and balances to be profitable and/or manage operational costs to maintain services to our customers, uphold our commitment to your organization as self-operating foodservice provider.
So, how do we manage this? Network with peers, use and share resources, and support each other through our AHF membership and the Benchmarking platform available to us.
2022 was a memorable year in relation to inflation of products. While in our personal lives we all witnessed and experienced increases in our grocery bills week over week, hospitals, CCRC’s, and the restaurant industries experienced extreme pain. U.S. food inflation averaged 3.46% annually since 1914, with two events between 1914 and 2021: an all-time high of 36.7% in May 1917, and a record low of -34.30% in June 1921.
In 2023, inflation is expected to be 9.5% by the end of the first quarter according to global models and analysts’ expectations. However, data indicates that food inflation may be cooling down. The latest CPI data showed that CPI rose .2% this past December, the lowest monthly rate hike since March 2021. The overall rate fell in January by -.1% which appears to be a small impact but was the largest since locking down in April 2020.
Finally, managing, reducing and as close to eliminating food waste is the key to organization’s success in the food and beverage industry. The more examples of cost savings and waste reduction we can share with one another, the stronger the success of each of our organizations will be. Join us for virtual, on-line, or local chapter meetings to hear these stories firsthand. I have calculated results of ‘take-away’ for me personally. As a result of one 16-hour conference, I gained 5% savings by adopting a simple practice a speaker answering an audience member’s question brought up during a presentation. Taking a random example of a 1-million-dollar food budget, you would be able to provide 50k dollars in added services to your organization or point that savings to the bottom line. Off of food topic, this savings could also be placed on labor, whether it is increasing wages for a team of employees or restructuring and lifting a frontline position into a position that focuses on a part of inventory and ordering processes to manage shelf-life of product (FIFO), and/or placing additional time and resources of someone evaluating purchase agreements, contracts, and even day to day ordering best practices. Some may also relate this to a more centralized purchasing system, particularly those with multiple campus’ or multiple on campus venues.
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Article by AHF's Benchmarking Committee Member Greg Thomas from Masonic Village. Article sources Entegra Inflation Reports (GPO), and TradingEconomics.com.