October 2021 by delcofoods

DELCO FOODS

OCTOBER 2021 VOL. 26, NO. 10

BUYING VERSUS PURCHASING By Peter Thor, BFC The best way to minimize food cost is to shop every item from several distributors each week. If you think this statement is true, you are a buyer. Is there a better way?

EXPECTATIONS FOR 2022 By Peter Thor, BFC It’s tempting to say “here we go again” with the return to pandemic related consumer behavior. DON’T! Most recent consumer sentiment polls show a sharp drop in optimism, a reduction in spending, and renewed health and safety concerns. We’re betting that this time will be different, however, if only for the vaccine and preventative knowledge gained. Plus, people are tired of the restrictions. It’s doubtful, for example, that there will be fall shutdowns. Schools will stay open, and sporting events will be held with fans in attendance. Restaurants will remain open perhaps with restrictions, and demand for takeaway will continue as well. Pizza will continue to prosper as convenience, portability, and affordability all contribute to pizza being America’s favorite food. Demand will stay strong but so will higher costs. Inflation is a key trend, much different than prior years. Costs of most food ingredients, energy, and of course labor will be here through 2022. Costs will remain higher than 2019/20, with food costs trending down from current levels into early next year. Not so for labor, freight, energy, and other costs. Compared to last year in September, CME block cheese is $.50/lb. lower, but there are spot supply shortages. Cheese production is expected to remain flat with average costs near current levels. Other major cost items are at historic highs, with costs coming down but only partially to pre-pandemic levels. Red meat levels remaining high, especially beef. Pork production in early September was still 10% below last year, and the lowest since 2018. After recent price reductions, pork remains 30% higher than a year ago. Surprisingly, poultry has not been able to meet supply requirements and production remains constrained by Covid related labor shortages, high feed-grain and freight costs. Breasts, wings, and tenders are all running at record-high prices. We’re not confident that we’ll see chicken prices come down until 1st or 2nd quarter 2022. The fact that producers and marketers are actively developing different cuts as alternatives for wings tells us the supply-demand imbalance isn’t going away. Key trends for 2022 will recognize the harm caused by the Covid crisis, both local within family, community, and the broader society and environment. (continued on page 2) A PROUD DISTRIBUTOR OF BELLISSIMO

Managing food cost is extremely important; it just is not the only important factor. One of the reasons why pizzeria owners do not maximize their profitability is that they have too much focus on the buying process. Prime cost, which is food cost plus labor cost is far more important. When an operator spends hours and hours each week shopping distributor’s prices, they are not spending those same hours creating, driving revenue, training (continued on page 3)

MARKET UPDATE Dairy Cheese Blocks

PRICE

LAST MONTH

DIFFERENCE

$1.692 $1.500 $0.192

The CME cheese markets finished higher with blocks, the costliest in 17 weeks. The USDA lowered its Q4 2021 milk production forecast by .3 percent but expect 1.4 percent larger (y/y).

Beef

PRICE

50% Trimmings $1.386

LAST MONTH

DIFFERENCE

$1.181 $0.205

Analysts continue to view the downside across the beef markets carrying into mid- to late month. The Q2 forecast for 2022 has Q2 beef production below Q1. Concerns about both late 2021 and 2022 beef production continues.

Poultry

PRICE

Wings (Jumbo) $3.124

LAST MONTH

DIFFERENCE

$3.129 ($0.005)

Boneless, skinless thigh meat, tenders, wings, and breast meat prices are all running at record-high prices while the bulk leg quarter market is actually a bit more modest by longer-term historical standards. As of 9/17/21

EXPECTATIONS FOR 2022

(cont. from page 1)

Reduced menus are a clear trend, a consequence of fewer staff in kitchens as well as another way to reduce and manage food costs. For guests a smaller menu conveys more freshness. Aligned with a smaller menu, restaurant operators can also manage staffing levels by reducing open hours or closing one day a week. Food safety has never been more important. Many consumers are concerned not just with the safety of the prepared food, but also the serving and perceived cleanliness of their exposure to foodborne and airborne virus. While mask wearing may not be required, consumers now have a heightened sense of their surroundings. New regulations will also probably mandate some of the pandemic related changes such as single served condiments and disposable containers. Sustainable future and local sourcing are important trends likely here to stay. Healthy eating trends are growing in importance, including meatless and vegetable-based toppings, gluten-free crusts, and regulatory focus on calories impacting portion control. Plant based meat sales tripled in the last year. At the recently held Pizza Expo in Las Vegas, no fewer than 7 new plant-based cheese manufacturers showed their products. Meatless pepperoni and chicken tenders cannot be far behind. Consumption is still a fraction of sales, but savvy operators will market these offerings as part of their commitment to a safer and more sustainable future.

THE PLANTS THAT PLEASE

These tasty, plant-based toppings allow pizza operations to attract new diners without sacrificing on quality. Choose from pepperoni-style topping, Italian crumble topping and chorizo-style crumble topping. All made with traditional spices, so plant and pork enthusiasts can appreciate them.

HOME OF THE PIZZA DESSERTS FAMILY STYLE “PIZZA” COOKIES, BROWNIES & S’MORES

Technology and digital presence took center stage during the pandemic, accelerating what was already an important trend. The pandemic has amplified the importance of having a contactless/digital means of ordering and presenting menus. Online menu and ordering options, touchless payment options, connection with delivery and other services made off-premise business flourish during the pandemic. Additional benefits to the operator include labor saving and operating efficiency. These tools are now available for independent restaurants at reasonable costs. Independent restaurants can amp their advantages in superior menu and food quality by embracing technology and key industry trends. The future will increasingly require environmentally friendly menu choices, a digital presence, and a marketing message that speaks to the all-important local customers. What works for operators seeking this business is offering compelling value, upto-date digital menu, and ordering combination bundles and food options that travel well. Combining the unique characteristics of independent restaurants with a digital presence and off-premise options developed during the Covid-19 pandemic are a sure winning combination for success in future!!! A PROUD DISTRIBUTOR OF BELLISSIMO

BAKING GOURMET DESSERTS SINCE 1977 8-Inch Chocolate Chip Cookies, Brownies and S’mores Fully Baked; Simply Heat & Serve The perfect dessert for your restaurant!

stellasgourmet.com info@stellasgourmet.com or 866.383.2444

BUYING VS. PURCHASING

EXPERTLY

Crafted. EXACTLY WHAT You NEED.

™

We understand you have personalized needs and are here to help you find or create just the right topping. We’ve spent decades perfecting the craft of our meat toppings. For us, it’s not just a job, it’s a passion. Let’s start with a sample at BurkeCorp.com ©2017 Burke Corporation. All rights reserved.

Be Inspired. Be Creative. Be Original.

(cont. from page 1)

employees, and servicing customers. These are missed opportunity costs. This also ignores the new realities of consumer pandemic awareness, labor shortages, and rapidly rising labor. Savvy operators should be researching labor-saving products like pre-cooked meats, pre-shredded cheese, and technology options which will improve prime cost and enable better service levels. The time spent saving $60 on cheese comes at the opportunity to create a promotion to sell more appetizers that might generate an additional gross profit of $600. The relationship between a distributor and the pizza operator should be based on both the products and services the distributor has to offer. That basket includes reliable service, competitive pricing, manufacturer promotions, market information, menu and trend suggestions, new products, and labor-saving ideas. In our current pandemic environment, distributor reliability is also critical. Manufacturer product shortages tend to get allocated based on reliable demand, as do distributor product deliveries. A reliable buyer is as important to a distributor as having a reliable supply is to a restaurant. Choosing the right distributor for you means explaining your needs clearly and being realistic. Explaining what is most important to your operation and building trust between you and the distributor is the best way to manage your food cost long-term. Bellissimo distributors specialize in their product knowledge and service levels. Taking care of your needs even during a pandemic and product shortages will be their priority. If the rep has to negotiate on each and every item, every week, they do not have the opportunity to show new items, suggest trends or even pass on promotions and new ideas.

Source: Technomic’s MenuMonitor Q4 2017-2018

CUSTOMIZED PIZZA WITH NUTELLA®

Nutella® dessert pizza menu offerings have increased 16.7% in the last year. Source: Technomic’s MenuMonitor Q4 2017-2018

For recipes and to learn more about Nutella®, visit www.ferrerofoodservice.com, or call (800) 408-1505 for more information.

Your distributor representatives are professionals. They observe more pizza operations in a week than you see all year. Your Bellissimo distributor can be a trusted advisor to discuss ideas and present unseen opportunities. The operator who uses this type of approach is a true purchasing manager. In the end, partnering with your Bellissimo distributor will lower your food cost and enable you to grasp opportunity costs you’re now missing. Good luck to us all during these challenging times.

A PROUD DISTRIBUTOR OF BELLISSIMO

National Pizza Month October is National Pizza month! This is a great time to generate excitement as well as new business. Think it’s too late to plan anything? Here are some last minute marketing strategies you can implement now. 1. Offer a different featured pizza every week. Advertise on social media to get the word out.

Remember you can visit us online at www.delcofoods.com

Comments, Questions & Suggestions

Please contact us toll free at 800.536.1234, locally at 317.876.1951, or visit us online at www.delcofoods.com. 2. Share n Instagram story every day featuring pizza We truly value your opinion. tips, food facts or a fun look at behind-the-scenes of your restaurant. As always, our number one goal is to keep you happy. Our newsletter is just one way we share new information about 3. Throw a hashtag contest for your customers. Ask the products and services we offer, as well as industry them to tag your restaurant with shots of your food using news we think may be interesting and useful. For personal a specific hashtag. Award your favorite posts with free service and support, please contact your Delco Foods sales pizza. representative. 5000 Anson Blvd . Whitestown, IN 46075 toll free 800.536.1234 . tel 317.876.1951 . fax 317.870.7803

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OCTOBER 2021 VOL. 26, NO. 10

INSIDE THIS ISSUE • Expectations for 2022 • Buying Versus Purchasing • Market Update

Permit #810

Presorted Standard EC US Postage KI PAID PIZ NSI Oakland, CA ZA DE Permit 810 IND FOR US TH TR Y NE LA c/o BELLISSIMO FOODS EW TES 1600 Riviera Ave. Ste. #315 T S

Walnut Creek, CA 94596 RETURN SERVICE

PH:317-876-1951 FAX:317-870-7803 www.delcofoods.com

Delco Foods is a proud distributor of Bellissimo authentic Italian ingredients.

Visit Bellissimo.com for more information on Bellissimo authentic Italian items, specials & more!

Talk to your distributor about CUSTOM BLENDING your ingredients, to achieve CONSISTENTLY superior, flavorful results each and every time.

1-800-ALLSPICE allseasonings.com A PROUD DISTRIBUTOR OF BELLISSIMO