Article

Commodity prices make this a great summer for LTOs and menu variety

Favorable commodity prices gives restaurants a chance to exercise their menu creativity with new offerings and LTOs.

June 16, 2016 by S.A. Whitehead — Food Editor, Net World Media Group

Shrimp could be very big as restaurant fare for the remainder of this year across the food service industry. That's because commodity forecasters predict the price for the seafood favorite is finally plummeting from recent record highs. For instance, representatives of restaurant supply chain management firm SpenDifference said the cost of the kind of shrimp most commonly used in restaurants nationally — medium peeled and deveined — has fallen substantially, making "this the ideal time for chains to lock in prices as they prepare for late 2016 promotions," according to a news release. 

In fact, the firm reports that this will be a "tremendous year" for chains who want to offer more menu choices for their guests because prices across the board for entree ingredients are either remaining flat or decreasing for the most part. 

So, what’s the deal with shrimp?

SpenDifference Director of Seafood Procurement Andy Beaty said the shrimp supply has rebounded finally after dramatically reduced harvests in 2013 due to a disease that killed huge numbers of farm-raised shrimp. That fact pushed prices for the medium peeled, deveined shrimp often found in restaurant kitchens up to nearly $7 a pound. In contrast, now the same quantity of that type of shrimp has fallen to approximately $4.25 a pound. Beaty said that price may hold or even drop since shrimp production increases in summer and prices are typically at their lowest level. 

"This is the time to stock up for year-end holiday menus and promotions geared to college football playoffs and the Super Bowl," he said. "Prices could begin to rise after summer when supply falls."

Other seafood and meat products also nicely priced 

Beaty also reported that prices for cod and pollock are "extremely affordable" at the moment and worth a look for restaurants considering limited-time offer specials and other additions to their menus. Likewise, the company reports that many other restaurant favorites are priced economically now as well, opening up the realm of menu possibilities across chains as the creativity of their chefs rises to meet the challenge of new menu possibilities. 

"This is a tremendous year for commodity purchases," said SpenDifference Vice President of Procurement DeWayne Dove. "Prices ... are all at levels where restaurant chains can add protein offerings at lower menu prices to generate more traffic."

The following commodities were spotlighted by the company as being particularly favorable for their pricing for the remainder of the year, according to a news release:

• Beef: Down 12-14 percent.
• Chicken: Down about 3 percent for chicken breasts, though wings could increase later in the year due to high demand.
• Turkey: Prices have fallen to pre-2015 avian flu levels.
• Corn: Down far below last year, under $4 a bushel.
• Cheese: Down 6 percent.

The company reports that two commodity price areas to watch include pork, which has risen 5-20 percent in price this year from record low prices last year, and soy oil, for which demand is keeping the cost relatively volatile. 

About S.A. Whitehead

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Pizza Marketplace and QSRweb editor Shelly Whitehead is a former newspaper and TV reporter with an affinity for telling stories about the people and innovative thinking behind great brands.