First, the good news: Forecasters expect 2018 to be a generally better year for food costs than restaurants experienced last year. “What’s good here is that the cost of food is going to see a pretty modest increase,” says Joe Pawlak, managing principal for Technomic, referencing data from the Bureau of Labor Statistics’ Producer Price Index. “So, restaurants won’t have to price up to a high extent to maintain their margins.”
Corn and soybeans—among the most important indicators, because they are the feed items for proteins and dairy—have seen record or near-record crops. “We have the best available feed supply in the last decade,” says David Maloni, president of the American Restaurant Association, which tracks and analyzes food commodity markets. “That should encourage protein and milk production, and that’s really good news for 2018.”
However, at least one pain point of the past year—chicken wing prices—will likely persist in 2018, forcing operators to get creative about how they price the menu staple. Further, developments outside the industry could throw a curveball into the forecast. Here's how.