Commodity Costs are Likely to Rise in 2013. What can you do?

With the drought, rising beef prices and internation pressures, indicators point to food costs going up in 2012.  Here is an interview with some suggestions on how to deal with rising costs.


"We are looking at a very difficult round of food commodity cost increases," says John Gordon, Principal of the Pacific Management Consulting Group. In a Foodservice Radio interview, John talks about the new drivers influencing food costs and what operators can do to help offset increases in the coming year.

"It has been very difficult over the past several years with an up-and-down pattern but in 2013 it will begin anew," says Gordon. "We have been dealing with commodity cost issues forever. What is new is globalization. With so much economic activity occurring internationally, the strength and weakness of the dollar has become a much bigger issue. A big portion also has to do with arbitrage or contracting and what positions the commodity markets are actually taking. We saw this last year with the coffee commodity cost run-up. So the short answer is the situation is more complex today with more drivers."

There are several opportunities where operators can bring down overall expenses. "Operators need to think very carefully about what they can control," Gordon continues. "For example, an independent operator will generally have more flexibility in terms of menu and pricing. It is critical to get the menu sized properly and do many frequent looks at the actual menu product mix. You don't want to have your menu crowded with low selling items because it creates a lot of drag on restaurant operations not only in terms of high inventory, but also menu complexity, order-taking, and cooking.

The number one item that every restaurant operator can control is suggestive selling. "It is amazing to me the number of times that restaurant customers are not suggested towards a menu item by human-to-human contact," Gordon concludes. "This industry does a lot of work with menu boards, drive-thru panels, and posters. But it really comes down to a service business and one human being has to be able to interface with another. It is just amazing to me to see how little that actually occurs. It is more prevalent in some operations than others, but the question 'Is that all?' has to be banished. Every employee, no matter how shy they are, has to have at least one default question."

Restaurant operators will also have to look beyond the two usual places food and labor to control costs. Utilities in restaurants are notoriously inefficient because restaurants operate many hours during the day. Operators can realize cost savings by turning on equipment and lights as needed, monitoring the thermostat throughout the day, and getting separate temperature controls for the kitchen and dining room.

Foodservice Radio is the 24-hour streaming internet station programmed for the food service operator.  You can access full stories and interviews at

Views: 56

Tags: commodity, costs, food, savings


You need to be a member of FohBoh to add comments!

Join FohBoh

Comment by Steve Sleasman on October 8, 2012 at 8:20am

RD Fresh can help prolong the life of perishables and help waste less food. Please check out our website at




Social Wine Club for Craft Wineries


Kids LiveWell atwitter over Twitter party

In its continuing effort to promote more nutritious and flavorful children's menu options, the NRA will hold a Twitter party  -More

Starbucks could become top on-premise wine seller in U.S.

Starbucks is planning to slowly expand its evening sales of wine, beer and small plates to thousands of selected stores throu -More

The evolving nature of snacks

Snacks have shifted from an after-school treat to a meal alternative as meal times become more fragmented.  -More


Posting a job or finding a job starts here at FohBoh. Call us about special $25 posting packages to syndicate across all major jobs boards.

National News

Wahlburgers Announces Expansion Plans Including Franchise Agreement in Philadelphia

Wahlburgers has signed a franchise agreement with Hingham Associates, LLC that will bring five Wahlburgers to the metropolitan Philadelphia area over the next several years. The franchise group is actively looking at sites and is targeting a late 2014-early 2015 opening for its first restaurant.

Chipotle Mexican Grill, Inc. First Quarter 2014 Revenue Up 24.4%

Comparable restaurant sales increased 13.4% - Restaurant level operating margin was 25.9%, a decrease of 40 basis points

Jamba Juice Announces Grand Opening of New St. Louis, MO Location

Jamba Juice Company announced the brand’s continued expansion in the St. Louis market with the opening of a Jamba Juice® store at 11477 Olive Blvd. on April 16, 2014.

Expert in Real Estate Analytics Joins Luna Grill

Luna Grill, the San Diego-based Mediterranean restaurant chain, is welcoming retail real estate industry veteran Greg Thorburn to its leadership team. Thorburn has been brought on board to fill the newly created position of Vice-President of Real Estate.

Rita's Italian Ice Awards Area Development Agreement for Kansas

Rita's Italian Ice has awarded franchise and area development agreements for Kansas and the Kansas City area, which extends to the Missouri side of the city, to franchisees and local residents Jay Miller, Jeff Miller and Pat Reilly.


If you are looking for capital to start or grow your restaurant, create the next 501c3, develop and launch the next app for the restaurant industry,or want to help your peers in some meaningful way, we want to know about it.


TED: Matthew Carter: My life in typefaces - Matthew Carter (2014)

Pick up a book, magazine or screen, and more than likely you'll come across some typography designed by Matthew Carter. In this charming talk, the man behind typefaces such as Verdana, Georgia and Bell Centennial (designed just for phone books -- remember them?), takes us on a spin through a career focused on the very last pixel of each letter of a font.

TED: Jeremy Kasdin: The flower-shaped starshade that might help us detect Earth-like planets - Jeremy Kasdin (2014)

Astronomers believe that every star in the galaxy has a planet, one fifth of which might harbor life. Only we haven't seen any of them -- yet. Jeremy Kasdin and his team are looking to change that with the design and engineering of an extraordinary piece of equipment: a flower petal-shaped "starshade" that allows a telescope to photograph planets from 50,000 kilometers away. It is, he says, the "coolest possible science."

TED: Norman Spack: How I help transgender teens become who they want to be - Norman Spack (2013)

Puberty is an awkward time for just about everybody, but for transgender teens it can be a nightmare, as they grow overnight into bodies they aren't comfortable with. In a heartfelt talk, endocrinologist Norman Spack tells a personal story of how he became one of the few doctors in the US to treat minors with hormone replacement therapy. By staving off the effects of puberty, Spack gives trans teens the time they need. (Filmed at TEDxBeaconStreet.)

TED: Jennifer Senior: For parents, happiness is a very high bar - Jennifer Senior (2014)

The parenting section of the bookstore is overwhelming—it's "a giant, candy-colored monument to our collective panic," as writer Jennifer Senior puts it. Why is parenthood filled with so much anxiety? Because the goal of modern, middle-class parents—to raise happy children—is so elusive. In this honest talk, she offers some kinder and more achievable aims.

© 2014   Created by FohBoh.

Badges  |  Report an Issue  |  Terms of Service