It seems every new year brings price hikes from product manufacturers and indications are this year is no different. We're all still reeling from the knee-buckling period from June 2010 to June 2011 when coffee prices climbed like a Sherpa up Everest. Thankfully, coffee prices have stabilized the last several months. Now it seems that syrup, frappe and smoothie manufacturers are planning their annual Christmas gift of price increase to all of us. I can't explain why this is the case. Oil prices, which affect everything, have been fairly stable and even sunk a little the last several months. I don't know enough about the sugar, dairy and cocoa markets to speak with authority but rising costs in these areas are the usual culprits of price increases.
I'll post updates on this subject as they become available. The question is how should a retailer respond. Many of you have updated your menus recently with increased drink pricing after absorbing a year's worth of product price increases on your end. For now, I recommend a wait and see approach. If the cumulative effect of ingredient costs is significant enough I would consider another revision of drink costs, as difficult as that might be.
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