The foodservice industry and the vendors supplying it are facing challenges beyond continuing uncertainty related to the virus.
Top among them is inflation.
According to NPD, the average check at restaurants, including eat-in, takeout, and home delivery, increased 7 percent in 2021 compared with 2020, and are definitely higher for 2022.
The U.S. Department of Agriculture (USDA) Food Price Outlook, released in March 2022, predicted that food in restaurants and other foodservice venues would rise 5.5 to 6.5 percent this year, compared to increases of 3 to 4 percent for groceries.
This includes rising prices on fruits and vegetables, which the USDA predicts will climb between 6 and 9 percent this year.
“I think the foodservice industry has worked remarkably well together to make the best of a bad situation,” says Steve Grinstead, CEO of FreshEdge, LLC headquartered in Indianapolis, IN.
“The current challenge is runaway inflation,” he confirms. “It’s stressing the industry because the inflation rate is many times higher than the profitability of most companies in the segment, so numerous price increases have had to take place.
“This created a stressful environment between partners in the supply chain on top of the pandemic stress everyone has already experienced.”
Dan Robertson, president of Robertson Produce BB #:101876 in Monroe, LA, believes inflation could stop consumers from fully returning to foodservice, just as they were starting to do so in a big way.
“Really, with the rate of inflation, I’m surprised foodservice and restaurants have been as strong as they have,” he says.
This is an excerpt from the cover story in the July/August 2022 issue of Produce Blueprints Magazine. Click here to read the whole issue.
