"Ask the Expert” features advice from Consolidated Concepts Inc.
Please send questions for this column to Modern Restaurant Management (MRM) magazine Executive Editor Barbara Castiglia at firstname.lastname@example.org.
Q: I’ve been reading about the swine fever and its impact on operators. What can I do off-set costs and protect my brand and menu?
A: Among the many issues that restaurants get to worry about the upcoming season one looms quite large — pork prices. This year, pork prices are being driven up not only by our nation's Chinese trade war, but also by an epidemic of African Swine Fever that is plaguing Asian hog markets.
Most analysts predict that protein prices are likely to rise for the second half of 2019 and into 2020.
Now to be clear, ASF is not a risk to human health, but how this unfortunate pork situation will affect restaurants remains to be seen. Most analysts predict that protein prices are likely to rise for the second half of 2019 and into 2020. The pace of these increases will rely heavily on the conditions of trade deals as well as the expansion of the ASF outbreak into new regions. Poultry will likely be the primary substitute for filling the gap in global pork demand, which may cause an increase in price if production is not brought up to meet the potential demand.
What can restaurants do to offset this price trend? Here are a few suggestions.
- One obvious thing restaurant operators can do is raise prices on the menu. While guests may be resistant to this change, operators can tweak recipes to include other premium ingredients to justify the cost of the increase. Additional premium ingredients can include on-trend items such as goat cheese, pomegranate seeds and truffle oil.
- If your restaurant relies heavily on pork and operators can’t ideally change prices, look to offset costs in other ways that don’t have a direct correlation to pork. This can include a reduction in labor, disposable, or other costs. Many consultants and group purchasing organizations recommend reducing food costs as a way to increase margins.
- It is most likely too late in the cycle of ASF to lock in any contracted pork pricing, so operators may want to target chicken contracts that will allow them to more profitably add poultry to the menus in place of pork.
- Operators also can add other proteins to menu items in place of pork. This can include more chicken, as stated above, beans or even different types of beef and turkey. Get creative and ask your supplier what they can do to help. It might be the case that there are pork producers in your market who have a similar product that is safe for consumption.