Higher prices at Central Pennsylvania restaurants? Not on the menu
Food prices might be rising overall, but midstate restaurateurs say that won't translate into higher prices for their customers.
That's because restaurateurs are used to employing multiple strategies to keep menu prices consistent. Those strategies include negotiating with distributors, changing menus seasonally and buying locally, and finding creative uses of less-expensive and in-season items to keep market fluctuations from affecting customers.
With a profit margin that averages, nationally, between 3 and 4 percent, and food costs making up 30 to 35 percent of expenditures, every dollar counts.
Patrick Conway, president and CEO of the Pennsylvania Restaurant Association, says there's "no question" that rising food prices have an impact on the restaurant industry.
In 2012, according to the Consumer Price Index, overall food prices increased 2.6 percent. That category measures changes in the retail prices of food items; in 2011, it was 3.7 percent. Though restaurateurs usually buy wholesale instead of retail, local restaurant owners said the two markets often mirror one another.
Kevin Davies, founder and director of culinary operations at Iron Hill Brewery & Restaurant, said the key to not having to raise prices is to keep a menu balanced. Their menu offers more than 100 items, "like diversifying a portfolio."
This quarter, Davies predicts, the price of beef, which increased 6.4 percent in 2012, will continue to rise.
Davies has been in the restaurant business for 35 years. The price of a burger now, he said, is easily 20 percent higher than 17 years ago.
Still, there's only so much a place can charge for a hamburger.
The trick in cases like that, Davies explains, is to "get creative with cuts" so that, while burger pricing will stay consistent, the price of steak might increase. Adding a slow-braised, less-expensive beef choice offers guests a good value.
The commodities market — which includes produce, poultry, beef and pork — has an effect, but Iron Hill is "big enough and busy enough. … It's not like a calamity. We just roll with it."
Chestnut Hill Café is a small, corner coffee shop in Lancaster that's been in business five years.
Last year, coffee — another commodity — spiked 19 percent. But, said Doreen Landis, who co-owns the café with Stephanie Bennett, the shop did not raise its prices.
Landis and Bennett purchase their beans from a roaster in North Carolina who "sources everywhere," Landis said.
The café did increase drink prices more than 18 months ago, in response to its own informal survey of local competition. They discovered they were under-pricing their drinks, especially considering they put two shots of espresso, rather than the usual one, in their 12-ounce drinks.
Other price increases over the past five years have been "gradual and fair," Landis said. And when there's a spike? They either lose the item — such as avocados, which also have the disadvantage of a short shelf life — or "eat the cost. It won't stay high," Landis said.
Isaac's Deli, with about 20 locations in southcentral Pennsylvania, also juggles creating a "strategic menu" with "waiting it out," says Greg Drake, senior manager of purchasing. Drake said there will be no price increases because of rising food costs.
Beef is up? They'll focus on the Salty Eagle, a ham sandwich, because ham is surprisingly inexpensive right now. The early spring lettuce freeze in the Midwest? Not to worry, because "in summer it will be down, 'cause it's right down the road."
Drake also said that having the "buying power" of Isaac's is an advantage. Drake and Davies both said they have no problems negotiating with distributors.
Buying locally can also lower costs significantly. With the cost of fuel so high, many vendors have increased their shipping prices.
Davies said that, in the spring and summer, his produce supplier sources a lot of local product. The quality is high and the pricing is competitive with what the company pays for produce from California.
Anthony Morgan, owner and head chef of the Black Gryphon in Elizabethtown, buys only sustainable, seasonal and organic products, usually purchased locally. Smaller purveyors, he said, try to keep their prices in line with what restaurateurs can afford.
He's been sourcing his eggs from Sandy Ridge Farm in West Donegal Township since the restaurant opened nearly six years ago, and the price has only gone up 50 cents per dozen in that time.
Morgan also buys intact and in volume — meaning whole chickens instead of prepped parts. He also cross-utilizes ingredients.
The goal is to maintain an average price within any given category on the menu: If one small plate is $10, then another will be $8.
Menus change seasonally, so a sudden price spike for a specific ingredient could mean that dish will be removed from the next menu.
Pour, a new high-end small-plate restaurant in Lancaster, is also committed to local and sustainable food. General Manager Eric Garman said he is amazed at how quickly the "little things" add up — such as delivery charges that used to be $1.50 but are now $4.
Chef Andrew Aho pointed out that shopping locally, direct from a farmer or a butcher, is "a lot cheaper, and I get exactly what I want."
Seventy-five percent of Pour's inventory is local. Seafood and citrus, as well as some meats and cheeses, are shipped in.
Although Garman and Aho have been in business only a short time, they've already learned that, in some cases — such as after Hurricane Sandy last year, when their seafood suppliers lost huge quantities of inventory — there's "nothing to do about it."
They've also learned to adapt to the wishes of their customers. For example, Pour recently added a Sunday brunch to its offerings.
All the restaurateurs agreed that the most important thing to do is keep people coming back by focusing on quality and guest satisfaction — whether that's through keeping burgers priced consistently, offering locally sourced food or adding hours.