DELCO FOODS
JANUARY 2022 VOL. 27, NO. 1
LOW-COST MARKETING STRATEGIES By Peter Thor, BFC
WELCOME TO THE NEW YEAR By Peter Thor, BFC What a year 2021 has been, but then we said that about 2020. Is life under masks and restrictions the new normal? On the other hand, the Covid pandemic has not been “cured” and rather successfully continues to exact a toll in both lives and how we live. It does seem likely that health precautions like mask wearing and preventative medicines and vaccines will be “normal” at least for the next year. What impact will this have on the pizza industry? To date, we can count the number of restaurants closed with the pivot toward take-out, outdoor dining, and restricted indoor activities. This has impacted not only restaurants but everywhere food is served, including schools, hospitals, and sporting events. Consumer demand is back albeit different than before. Most consumers are aware and more cautious about their dining environment as well as how it is delivered to them. Restaurant workers are masked in most states even when patrons don’t have to be. Table spacing, barriers between them, and other measures designed to make diners comfortable are smart marketing even if not required. Food supply and rapidly rising costs have been most crippling. From a restaurateur’s perspective, 2021 brought negative news from their distributors mostly in the form of price increases. The unseen story is much bigger as it is a tale of shortages and delays at every level, coupled with insufficient labor and hobbled by changing regulatory requirements. To comprehend what 2022 has in store, here is a quick review of how we got here. In early Spring 2020, demand fell off a cliff and the supply chain had a forced stop at every level. Farms and animal production stopped, manufacturing plants closed, and workers were laid-off. Food service demand bottomed while retail grocery demand spiked. Everyday items ran out on shelf and when food service started to reopen, the supply chain had to be replenished at every level which has been an excruciating process. Restarting production at farm level requires a lead time measured in months. Factory production encountered new regulatory requirements, and worker illness and precautionary measures meant capacity limits well below pre-Covid levels. (continued on page 2) A PROUD DISTRIBUTOR OF BELLISSIMO
When consumers choose a restaurant or pizzeria to purchase from, what are their top reasons for purchase and where do they get their information? If looking for low cost, quick service and online ordering, they will search the internet and the top choice is usually going to be a national chain with a low-cost coupon offer where the order is placed online and the pizza delivered. If looking for the best quality and taste albeit at a higher cost, perhaps for onsite consumption or take-away, the choice is more often the local independent. Consumer preferences have changed to favor social media, quick (continued on page 3)
MARKET UPDATE Dairy
PRICE
LAST MONTH
DIFF
Cheese Blocks
$1.923
$1.724
$0.200
The cheese markets were mixed (w/w) with barrels higher and blocks lower. It was the highest weekly close for barrels in five weeks.
Beef
PRICE
LAST MONTH
DIFF
50% Trimmings
$1.014
$0.953
$0.061
The USDA is forecasting domestic beef output in the first half of 2022 to be down by 1.6 percent. Retail beef prices remain at record highs heading into the new year.
Poultry
PRICE
LAST MONTH
DIFF
Wings (Jumbo)
$2.826
$2.854
($0.028)
USDA is forecasting first-quarter 2022 domestic chicken production to be 2.4 percent more than last year. And the USDA’s 2022 broiler output projection is up a more modest 1.7 percent compared to 2021. As of 12/17/21
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