5 Ways Hospitality Leaders Can Mitigate Inflated Food Costs

As we enter 2023, food prices remain inflated. In fact, the UN Food Price Index (FFPI), which tracks monthly international prices of cereals, vegetable oil, dairy meat and sugar, shows that the index value is over 14% higher in 2022 (143.7 points) than the average value in 2021 (133.7 points).
On the bright side, there has been a slow decline for the past several months, with food prices expected to continue to fall by 5%, before stabilising next year in 2024. However, even with this decline, food prices remain high by historical standards.

Inflation, in combination with labour shortages, supply chain disruptions due to climate change and the Russian - Ukrainian war, ever-changing regulations and the brink of a recession all lead to incredibly difficult challenges for many in the hospitality industry.

While raising food prices is one way to mitigate the unprecedented events, there are several other steps that hospitality leaders can take to help keep their businesses thriving.
Outlined below are 5 ways that hospitality leaders can face these challenges without raising prices:

Keeping a good relationship with your suppliers is critical. When possible, negotiating for longer term and stable contracts can help mitigate the effects of inflation. However, this can prove tricky as everyone in the food supply chain is affected by ongoing events - from farmers to chefs. 

Alternatively, maintaining flexibility around ingredients used, factoring seasonality into menus and going for locally produced products can also be a viable option to increase adaptability to any unforeseen supply shortages. 

There can easily be some quick wins from analysing what’s on the kitchen menu. One option is to spot opportunities where more expensive ingredients can be substituted with cheaper alternatives, without compromising on quality or taste.

Another option is to identify any unprofitable dishes and remove them from the menu altogether.

3. Portion Control

Hospitality leaders can reap several benefits by controlling consumers’ portion size. 

For one, this can help ensure that ingredients are used efficiently, that spoilage is minimised, and that plate waste is reduced. It can also help streamline kitchen operations by improving accuracy and speed. 

Ultimately, controlling portions helps cut costs and food waste. Winnow helps provide the data on post-consumer plate waste with Winnow Sense, a touchless measurement solution for kitchens. 

The system automatically takes a picture of what's left on each plate and builds a dataset for a Winnow analyst to perform an accurate audit. Equipped with the results, operators can adjust menus and increase product yields while cutting costs and giving customers more of what they want.

4. Staff Training 

An increase in frequency of staff training can facilitate streamlining processes and cutting costs in the long run, in order to keep the team up-to-date with ongoing changes that are implemented to mitigate inflation.

For example, staff can be trained in updated menu items and any price changes, portion changes and use of new kitchen technologies. Better trained staff can also provide better customer service, increasing customer satisfaction and loyalty, resulting in a maintained competitive advantage.

In times of labour and food inflation, staff training can help ensure the adaptability and resilience of the business, while maintaining quality standards.  This will help ensure that any recent solutions implemented by the leadership team will take effect to the best of its potential. 

5. Increase Operational Efficiency

There are several ways to increase operational efficiency. One way is to do so through automation, by investing in technologies - whether this is automated inventory management at the back of house or customer-facing displays in the front of house.

However, the best way is to conduct a thorough audit of discarded food in your kitchen with Winnow - helping combat over-purchasing and overproduction of foods. 

In fact, a typical commercial kitchen wastes 5%-15% of the food they buy.  This happens because often, businesses  lack the necessary tools to quickly and accurately record the food being thrown away. Tracking food waste that enables visibility into what is being wasted is the key to reducing waste and cutting costs. 

“I spent three years trying to drive down my food costs. But without Winnow, we moved in small steps. Winnow gave us a tool that really made a difference in a very short window.” - Peter Wilson, Global Food Service Director, ISS 

With Winnow, our partners’ profit margins increase by reducing forecasting errors, increasing efficiency and lowering food and labour costs. We  typically reduce food costs by 2-8% per year, and save $42million USD annually. 

See our blueprint guide on how resorts and hotels can mitigate rising food costs without raising prices