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Food costs are way up, and Tampa Bay restaurants are feeling the crunch

Pandemic-related production lags are causing shortages in a reinvigorated restaurant industry.
Mee ae Wolney poses in front of her restaurant Anju in St. Petersburg where Korean-fried chicken wings are the speciality. Wolney said the price for chicken — and chicken wings in particular — has more than doubled since last year, forcing her to raise some of her prices at the restaurant. It's a familiar conundrum many restaurant owners are facing right now: raise their costs for customers or sweat the margin crunch.
Mee ae Wolney poses in front of her restaurant Anju in St. Petersburg where Korean-fried chicken wings are the speciality. Wolney said the price for chicken — and chicken wings in particular — has more than doubled since last year, forcing her to raise some of her prices at the restaurant. It's a familiar conundrum many restaurant owners are facing right now: raise their costs for customers or sweat the margin crunch. [ JOHN PENDYGRAFT | Times ]
Published Jun. 19

Crispy, spicy, stick-to-your-fingers Korean-fried chicken wings — that’s the dish that put Mee Ae Wolney’s business on the map.

Wolney credits those wings with helping her food truck Anju succeed, leading to her St. Petersburg restaurant of the same name. Those wings are still her top-selling item. But following a price surge on chicken — and chicken wings, in particular — Wolney is facing a conundrum: raise her prices or eat a big part of the cost herself. Taking the wings off the menu just isn’t an option.

Other local restaurant owners are facing the same dilemma.

Over the past year, Wolney has watched the price of chicken wings steadily rise, from $1.87 per pound last July to $2.12 in fall 2020. In December, the price jumped to $2.47 and has continued to climb. Last week, wings were going for $3.91 per pound at wholesale supplier Restaurant Depot — more than double what Wolney was paying before the pandemic.

That’s not the only staple that has undergone a staggering price hike: Fryer oil — instrumental in making Wolney’s hand-battered wings and her popular boneless “K-pops” — went from $18 per jug in spring 2020 to $43.95 this week at Sanwa Farmer’s Market in Tampa.

“It’s insane,” Wolney said. “It’s why some places have decided to stop selling wings — they don’t want to charge $20 for a plate. But there’s no way I can take wings off my menu — it’s basically what we’re known for.”

An order of Anju's signature Korean-fried chicken wings now costs $15, up from $13 after rising food costs for fryer oil and chicken wings forced the restaurant's owner to raise her prices.
An order of Anju's signature Korean-fried chicken wings now costs $15, up from $13 after rising food costs for fryer oil and chicken wings forced the restaurant's owner to raise her prices. [ JOHN PENDYGRAFT | Times ]

After holding out for several months, Wolney raised her prices. An order of six, jumbo-sized chicken wings now costs $15, up from $13. That price has caused some sticker shock for customers, but between the labor, overhead for rent and utilities, additional ingredients and third-party vendor commission fees, Wolney said her margins are still shrinking. She can’t imagine customers wanting to spend any more for a plate of wings, so — for now — her business is weathering the gap.

With price hikes and shortages reported across the board for high-demand food items, business owners are being forced to pass the cost on to the customer or sweat the margin crunch. Among the items contributing to the price surges are proteins like chicken, beef and seafood but also mayonnaise, liquor including Crown Royal whiskey and some vodkas, specialty wines and harder-to-source international ingredients.

Like Wolney, many restaurant owners source from food distribution giants like US Foods and Sysco or from smaller, local outlets, and prices vary depending on a restaurant’s purchasing power and their relationship to their distributor.

Food prices fluctuate regularly, but the current hike points to production lags and labor shortages caused by the pandemic, said Robert Hooker, an associate professor at the University of South Florida’s Monica Wooden Center for Supply Chain Management and Sustainability.

Early in the pandemic, a sudden halt in purchasing from restaurants and hospitality giants prompted the dumping of products and the premature slaughter of some animals, as farmers and food producers faced an unprecedented supply with almost zero demand overnight. Now, the opposite is happening, with restaurants across the country facing a surge of business from newly vaccinated diners eager to return to their pre-pandemic lifestyles.

“We’ve got this weird, bullwhip effect that’s going on in the supply chain right now,” Hooker said. “Our food supply is not designed to really deal with pandemics and these sorts of crises. Post-pandemic, people are demanding different things, and they’re not demanding it in the same quantities.”

At King of the Coop in Seminole Heights, owner Joe Dodd said he is considering new ways of bundling combo meals for fried chicken sandwiches and baskets to help offset some of the rising food costs.
At King of the Coop in Seminole Heights, owner Joe Dodd said he is considering new ways of bundling combo meals for fried chicken sandwiches and baskets to help offset some of the rising food costs. [ LUIS SANTANA | Times ]

Rising gas prices and an ongoing shortage of long-haul truckers also are partially to blame for the price leaps. And now, farmers and processors are facing a new dilemma: a shortage of people to work as farm hands and in processing, packaging and transport positions.

Hooker said he doesn’t know when prices might start to balance out, but that consumers can expect the current surges to ebb and flow for a while, depending on what turns the pandemic takes.

Joe Dodd, who owns Nashville-style fried chicken restaurant King of the Coop in Wesley Chapel and Seminole Heights, said the price surge on key products, including chicken and mayonnaise, has been “exponential.” He dropped the Mississippi catfish he once sourced from his menu, because the catfish farm in question hasn’t been able to find workers to harvest the fish.

In the meantime, Dodd said his team is reconsidering how to tweak and bundle menu items to offset costs for in-house diners. They’ve already raised prices on items specifically ordered through third-party delivery apps like Uber Eats, because the services charge restaurants up to 30 percent in commission fees.

Figuring out how to educate customers on the difference between a dish’s perceived value and what it actually costs the restaurant owner can prove difficult, Dodd said.

“You look at something like chicken tenders, and you’re like, ‘Oh, it’s just a chicken tender,’” Dodd said. “But you can’t pay someone $15 an hour if your costs have gone up 30 percent and people aren’t willing to pay that for a chicken tender. You’re not buying a chicken tender — you’re buying the value of the people that are making it.”

Restaurants that rely on gourmet international ingredients are finding that shipments stuck on barges overseas often lag for weeks, sometimes months, and that once products arrive, they’re coming at a much steeper cost.

A broiled octopus dish is one of the most popular menu items at Fado, a new Portuguese restaurant in St. Petersburg. Delays in shipments from overseas as well as labor shortages have caused the price of octopus and several other imported items the restaurant relies on to skyrocket.
A broiled octopus dish is one of the most popular menu items at Fado, a new Portuguese restaurant in St. Petersburg. Delays in shipments from overseas as well as labor shortages have caused the price of octopus and several other imported items the restaurant relies on to skyrocket. [ MENGSHIN LIN | Times ]

At Fado, a new Portuguese restaurant in St. Petersburg, owner Sandra Andrade said they’ve seen the price skyrocket for two of their signature proteins: octopus and salted codfish. Andrade and her husband source their seafood and wines directly from Portugal.

“It’s like a snowball effect,” Andrade said. “People weren’t working, so they couldn’t produce anything, and now that things are back and running, the prices are going up.”

The wholesale cost for octopus has gone up $3 per pound, Andrade said. To make up for the gap, they’re raising the menu price from around $33 to closer to $40 per plate. As a new restaurant still looking to attract customers, they can’t afford to raise prices much more, Andrade said, for fear that might alienate diners.

“It wouldn’t look good for business,” Andrade said. “On some items, we’re just going to have to take the loss for now, and wait and see what it’s like a year from now.”

At Gangchu in Seminole Heights, owner Noel Cruz said sourcing specialty liquors like Japanese sake and Korean soju has become increasingly difficult, something he attributed to fewer shipping containers making overseas trips. The same goes for perilla leaves — an anise-scented herb often used in Asian cooking — and other niche products.

“When they run out, they run out,” Cruz said. “It’s not like you can switch to another vendor.”

As with Anju in St. Petersburg, the focus at Gangchu is on Korean-fried chicken. For now, Cruz said his team has decided to cover the cost of the price hikes for chicken and hope the surge doesn’t last too long.

“There’s a little bit of a roller coaster (effect)” he said. We don’t want to raise prices unless it’s just an insurmountable cost.”