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Lisa Jennings

Commodity inflation improving in 2012; even better in 2013

Beef prices will remain a challenge

This is part of NRN’s special coverage of the 2012 NRA Show. The show is held in Chicago, May 5-8. Follow all coverage on NRN’s ‘At the Show’ section and Tweet with us using #NRNatNRA.

Rising commodity costs have been a huge problem for restaurant operators over the past two years, but this year will bring some easing of pressure and less volatility.

So predicts Maryanne Rose, chief executive of the Denver-based SpenDifference, a purchasing and supply chain advisory firm.

Ingredients tied to corn will continue to be a problem area, however.

“Beef is not going to soften,” said Rose, and that means the road ahead will still be tough for burger players and those selling “value steaks.”

Next year will likely look better, in terms of commodity costs, but Rose said she doesn’t think we’ll ever return to pre-recession levels. The “floor” will likely look more like 2010 pricing than 2007.

But the best thing to come out of this economy, she said, “is that the restaurant industry has had to be smarter in how we operate our businesses.”

SpenDifference is firm that acts something like a group purchasing organization, but not entirely. Rose said the firm works with midsize chains to help them bring down costs by leveraging group buying power, but also advising operators on how to boost margins at the store level by using products more efficiently.

Working with a number of different chains, Rose said she’s seeing more interest in all-natural meats, local produce and more sustainable ingredients in general, but the supply is still not there.

“Restaurants are asking themselves, ‘Do I want to do all natural? Is that what my customers are willing to pay for?’” she said. “I do think it’s time. It’s a really interesting trend, but yet to be determined.”

TAGS: Supply Chain
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