Is your food cost really high – or does it just feel high?

Food prices have dominated conversations in catering for the last few years. Inflation, supply chain disruption and changing consumer demand have created an unpredictable market, leaving many catering teams questioning whether their food costs are where they should be.

But when your costs increase, how do you know whether it’s a genuine problem – or simply a reflection of the wider market?

Looking backwards only tells part of the story

Many organisations measure performance by comparing today’s figures with last year’s. While that’s a useful starting point, it doesn’t always provide the full picture.

Markets change, commodity prices fluctuate, supplier costs rise and fall, and purchasing patterns evolve. A food cost that looks high compared to last year may actually be perfectly in line with current market conditions.

Equally, a small year-on-year increase could still mean you’re paying considerably more than similar organisations purchasing the same products. Without external context, it’s difficult to know which is true.

Experienced catering managers often have a good feel for when prices seem too high. But instinct can only take you so far.

It’s easy to focus on the products making headlines or those with the most noticeable price increases. Meanwhile, smaller changes across hundreds of product lines can quietly have a much bigger impact on your overall spend.

Context changes everything

Imagine your food costs have increased by 6%. Is that good or bad?

The answer depends on what the rest of the market is doing.

If comparable organisations have seen costs rise by 9%, you’re performing well. If the market average is 2%, it’s worth investigating why your costs are increasing more quickly.

That’s where independent benchmarking can help. Rather than relying solely on your own historic data, it enables you to compare your performance against organisations with similar purchasing profiles and understand whether your costs are competitive.

Independent benchmarking helps answer questions such as:

• Are our suppliers’ prices competitive?
• Are there opportunities to reduce costs without compromising quality?
• Is this a market-wide issue, or something unique to our organisation?
• Do we need to act, or are we already performing well?

See the bigger picture

When budgets are under pressure, every pound matters. But before making changes, it’s important to understand whether your food costs are genuinely out of line or simply reflect the reality of today’s market.

Want to know how your food costs compare? Our independent benchmarking database analyses billions of pounds of foodservice spend, giving catering teams the context they need to understand performance, identify opportunities and make confident procurement decisions. Get in touch with our team here to find out more.

The Quenelles team