Whether it’s take-out, delivery or in-person dining, the cost of a meal has steadily gone up. As customers, we see one side of this – the one where we get frustrated when it’s time to pay for our food or drink and it’s more than it used to be. For restaurant industry professionals, a recurring theme I’ve heard for the increases involves the rising costs of goods which have been impacted by a variety of factors.
Anne Marie Panoringan
Voice of OC’s food columnist — reporting on industry news, current events and trends. Panoringan’s prior work includes writing about food for 8 years at the OC Weekly in which she interviewed more than 330 chefs, restauranteurs and industry professionals for her weekly “On the Line” column. She has been recognized by the Orange County Press Club and she also is a recurring guest on AM 830’s SoCal Restaurant Show.
The Impact of Shipping
The delay in receiving goods from overseas has made one of the biggest impacts on sourcing ingredients and the pricing associated with it. Veronica Castro, a buyer of sake and European wines for Hi-Time Wine Cellars, is well aware of the backup, citing the two-week quarantine due to COVID on vessels arriving into the Port of Long Beach (the second busiest container port in North America) as a primary culprit.
When she has customers requesting a specific product that isn’t in stock, “I tell them to look off the coast of Huntington Beach – where a line of ships are docked – and tell them THAT’S where their wine (or sake or champagne) is.”
Castro says the range of delays is not limited to Long Beach. One of her suppliers told her that other ports are feeling a similar strain. “There was a 15- to 20-vessel shipping container queue waiting at the port of Oakland. Seattle, Los Angeles and Long Beach wait times are about seven days, and U.S. East Coast ports are also experiencing vessel wait delays due to secure truck coverage,” she said. However, she does point out that things are gradually improving, as ships used to be lined up as far south as Laguna Beach.
Of the products that Castro specializes in, she has seen a $2 to $5 price increase per bottle on imports across the board. Tariffs imposed on imports in recent years have driven the cost of bottles in other sections up as much as $15, “But tariffs are a separate issue,” Castro said.
Further down the transportation pipeline, the trucking industry’s role in shipping freight has experienced its own issues. Manufacturers are experiencing supply chain disruptions which are sometimes due to a lack of packaging. I was recently at a corporate chain drive-thru ordering breakfast and only noticed after the fact that my items were wrapped in plain (non-branded) white paper. A shortage in tangible resources or employees operating machinery in a printing facility means orders cannot be filled and loaded onto trucks, resulting in out-of-stock inventory like food wrappers.
A lack of experienced drivers is an additional factor in shipping delays, as more existing truckers are reaching retirement age but fewer individuals are interested in joining the industry. Even with trained and experienced drivers, variables such as extensive wait times at a congested port while inventory is unloaded and transferred to vehicles for transport take away from the turnaround of vessels, shipping containers and big rigs, eventually causing more delays and a higher demand for items. Time is money, and the time lost in all stages of transport drives up cost.
How Do Meat Demands (and Prop 12) Impact Costs?
Consumer stockpiling of toilet paper and perishables last year, compounded with closures across foodservice industries, including meatpacking, sent the trajectory of pricing for beef soaring, with pork close behind.
Restaurateur Priscilla Alfaro of Jalapeños Mexican Food, a brand that’s served OC for over 30 years, expresses concern. “The last year and a half has been difficult in so many ways for restaurants. Menu prices must go up if all our expenses are going up.” For Alfaro, beef that was previously $3.85 a pound is now costing her $8.00 – more than double the original price.
She dealt with shortages on paper products as well as meat, forcing a search for comparable inventory with other suppliers to maintain the quality Jalapeños is known for. “I tried to hold off raising prices as much as I could, but it’s just not sustainable at this time,” Alfaro said.
Meat prices have been complicated by the Farm Animal Confinement Proposition (a.k.a. Proposition 12), California legislation that was passed in 2018. The initiative’s purpose was to standardize regulations in which livestock were caged, including improving living conditions for pigs, cattle and hens. While the change of current practices for calves and chickens appears manageable, there is a much greater concern for the adjustments needed for swine.
Twenty-four square feet of floor space will be required for farmers breeding pigs. To make the accommodations for hogs by the deadline of January 1, 2022, a minimum 50% surge in the cost of pork is forecasted.
According to the National Pork Producers Council (NPPC), “California represents 15% of the U.S. pork market, with large Latino and Asian populations which have long-standing cultural preferences for pork.” The diversity of cuisines in Orange County and beyond includes meals featuring carnitas, katsu, chorizo and ramen.
The Kashiwa Ramen in Costa Mesa, where chicken and pork-based broth is popular, is one of many noodle houses having to adjust its menu pricing. Per operator Hiro Yamanouchi, “It has been crucially affecting our tonkotsu ramen and pork cha-shu. For instance, the pork belly cost has risen by $1.60 per pound. Due to this significant increase, we had to change our tonkotsu ramen price from $10.15 to $11.95.” An extra serving of cha-shu also went up $2.
Importing authentic Japanese ingredients will soon be a two-fold cost hike for Yamanouchi, as his 40-foot flight containers used to transport necessary products (sea kelp, soy sauce made with Japanese water, chili powders only found in Japan, etc.) are going up from $5,000 to approximately $20,000, plus the overall cost of the ingredients is increasing. Regarding the changing cost of pork in California, “We cannot imagine how much the overall food cost will be increased in the near future,” he laments.
Orange County-based Slater’s 50/50 navigated COVID by closing the flagship Anaheim Hills location at the beginning of 2021. Its signature burger patty is derived from 50% ground beef and 50% ground bacon. Chief operating officer Ernie Romo fully comprehends the impact of Proposition 12.
“Since bacon is one of our primary differentiators, the new regulations will without a doubt affect our business,” he said. He also acknowledges that factors such as changes in operating costs and product pricing occur every year. “However, as restaurateurs, we are always ready to adapt and evolve as necessary and are committed to still preaching the gospel of ‘Burgers, Bacon and Beer.’”
Ultimately, restaurants are stuck for the time being. This means customer frustration over higher prices will likely not dissipate any time soon. As much as restaurant owners want to keep menu prices down, the complicated equation of acquiring goods, which includes shipping and new legislation, dictates that your next hamburger (or burrito or cocktail) will likely cost more than expected.
Anne Marie Panoringan is the food columnist for Arts & Culture at Voice of OC. She can be reached at firstname.lastname@example.org.