Diners at Island restaurants will pay more for everything from fish and chips to omelettes this summer as the cost of almost all ingredients has skyrocketed.
Vineyard, chefs, caterers and bakers struggling with their soaring costs — the price of basics such as eggs, flour and cooking oil have more than doubled, even tripled in the past year, they report — have been forced to increase their own prices.
Some have adjusted their menus, others have reduced portions, and at least one restaurateur admitted he was considering cutting back on staff to offset the rising prices.
Fluctuations in the price of ingredients is normal in the restaurant business, especially this time of year, however many chefs and restaurant owners say this year’s surge in costs is unprecedented and has them worried.
“You name it, the prices are up — for beef, rice, bread — everything,” said John Shepherd, head chef at the Wharf Pub & Restaurant in Edgartown. “The worse is the cost of the basic things we use all the time; things like cooking oil and flour, they’ve practically doubled in price.”
Mr. Shepherd said he tried not to pass the increased costs onto his customers, but eventually felt he had no choice. “We consider ourselves a local place, part of the community, and we’ve always taken pride in keeping our prices down. But when your profit margins are already thin and you’re paying more then double for some items from last year, you have no choice,” he said.
The rising cost of ingredients can be traced to two things: the acute spike in gasoline prices and the increased demand for ethanol fuel, made from corn or sugar cane, a demand driven by state, federal and international tax incentives and environmental regulations.
Some jurisdictions now require ethanol be blended with gasoline to comply with anti-pollution laws. Meanwhile, record high oil prices are driving up the cost of corn, as the value of ethanol is pushed up by the value of the fuel it replaces.
And while the surging corn prices may be good news to the nation’s farmers, more of the harvest is going into gas tanks rather than onto dinner plates. The result is higher prices for chef’s ingredients.
Food costs are up across the nation, but the state of Massachusetts has been hit especially hard. Data from the federal bureau or labor statistics show the cost of food items purchased outside of home in the Boston area up 5.1 per cent from April of 2007 to April of 2008, the biggest increase since 2001.
And because the Vineyard is literally at the end of the supply chain, restaurateurs here are getting hit especially hard. Besides paying higher food costs, they are paying higher delivery costs, often in the form of a surcharge from suppliers who deliver food here. Across the board, restaurateurs are paying a $3 to $5 surcharge on top of all deliveries to the Island.
Janice Casey, co-owner of the Martha’s Vineyard Gourmet Cafe and Bakeries in Oak Bluffs and Edgartown, said the cost of everything from nut syrup to chocolate is way up. Last year she paid $11.07 for a 50-pound bag of pastry flour, while this year she is paying $21.39. Meanwhile, a 30-pound bag of walnuts cost $94 last year is now going for $183.
“We used to be able to pre-buy a bunch of flour at the start of the season, but now our supplier won’t let us do that because the price is so volatile . . . the prices seem to change every day,” she said.
Ms. Casey said the owners held off opening the Edgartown store until later in the season to try to offset the increased cost of ingredients, and they have gone to greater lengths to cut down on waste and extraneous food costs. And while they have made slight increases in the prices of some items, they were being very careful not to alienate customers.
“The problem is you can’t just double the prices. If you do, people just won’t buy from you,” she said.” We have to take care of the customers but also take care of ourselves, which isn’t easy.”
Christian Thornton, owner of Atria in Edgartown, agreed. He noted the average profit margin for most restaurants is between five and 15 per cent, which makes it impossible for restaurants to simply absorb the increase in the cost of ingredients.
“I don’t think anyone takes increasing their prices lightly — I know we don’t,” Mr. Thornton said. “[At Atria] we aren’t increasing prices by $20 a plate, absolutely not, we would never do that; it’s more like a dollar here and a dollar there. But even [that increase] was something we did only after careful consideration,” he said.
Mr. Thornton agreed the most basic ingredients that have seen the highest increase in costs. A container of canola oil that sold for $19 last year, he said, is now selling for over $40, and a surcharge of $1.50 for some deliveries last year now has ballooned to $5.
When asked if any ingredients didn’t increase in cost, Mr. Thornton takes a minute to reflect.
“Let me think . . . the cost of wine from California has increased three-fold, eggs are way up, so are mesclun greens and onions and propane for the stoves. I really can’t think of anything that hasn’t increased,” he said.
The one good thing, Mr. Thornton said, is that people are still eating out at a healthy clip.
“Business has been good, Memorial Day was especially good,” he said. “I’m confident the Vineyard will have a great summer, but I’ve always been an optimist.”
Gates Rickard, who owns an Island bakery with his wife that specializes in bread-baking, said he is paying double the price for a bag of flour over last year. And the only reason he isn’t paying more than that is because he changed suppliers to get a better price.
As a relatively new business, Mr. Rickard said he and his wife have been reluctant to make drastic increases to their prices. But he concedes the ever-increasing costs of ingredients has made if difficult to hold the line.
“We’re still sort of new and we want to stay competitive, so we are trying really hard to hold our prices. I think people have almost come to expect increases in things like oil and gasoline, but they are still a little caught off-guard by an increases in the cost of something like bread . . . but it’s all connected,” he said.