The impact of rising commodity prices on franchise restaurants
A major topic of conversation in the restaurant industry over the past 18 months has been the continued rise in commodity prices, especially for proteins. In 2012, beef prices rose 9.9 percent and chicken prices had a double-digit increase. These trends have continued in 2013, with the beef price pressure continuing a trend that started in 2010.
Poultry: Bird watching
Poultry is the number one protein buy for a majority of qsr and casual operators.
Supplies of beef and pork are just starting to rebound, as ranchers and hog farmers slowly ramp up production in step with moderately increased demand. But expect prices to remain elevated through the end of the year; about 10 to 20 percent higher than they were in 2009, says Bill Lapp, commodity expert and president of Advanced Economic Solutions in Omaha, Nebraska.