From Field To Fork
From field to fork. This alliterative phrase is a simple but accurate way of describing the journey the food we eat takes from its production, into our mouths.
The phrase is simple, the journey is not. It takes many steps to grow, harvest, transform, slaughter, catch, refine, transport and more, to make food palatable and attainable. Each of these steps has a cost related to it. A rise in any step's cost almost always results in a higher cost of food.
In the last 10 years food inflation has been fairly stable. The rate of inflation can vary greatly from one year to the next. However, regardless of the percentage of variation inflation continues its effect year after year. Each year's increase compounds on top of the previous year's. That's why it's important for food businesses to understand that when you fail to adjust your prices to reflect trends in inflation and food costs, you have effectively lowered them. That is an action no business can survive.
After years of 1.5%-3% rises in the cost of food, the industry was hit with a 6% rise in the last quarter of 2013. Since January first of 2014 US food prices are up a staggering 19%. Causes are many, the main one of late being the perfect storm of a harsh winter, from which the east coast is now coming out of hibernation, coupled with a drought in the west and a severe drop in the supply of many goods. And there is also the demand from foreign markets because of their own production problems, and their desire for American goods, many of which are the best in the world. Prices will continue to rise for some time as our growing seasons are behind and everyone needs product.
No one likes to raise prices. In the food industry the principles at every step of the aforementioned field to fork journey have made tough decisions with regard to prices in the last year. The increases show no sign of abating in the near future. Grocery stores and restaurants are at the end of that journey and both are seeing rapid and significant elevation of costs. They need to be aware that their increase in prices after inflation is a necessary part of good financial management. To not do so would be a bad business decision.