How we are dealing with food inflation at Roselle
The past 12 months (make that past three years..) have been difficult for small businesses like ours.
We are a from-scratch pastry shop and we produce relatively small quantities using raw ingredients.
Like many, we have definitely felt the pain with the ever-increasing cost of our ingredients. As a smaller retail producer, we are unable to negotiate prices with our suppliers. The quantities we purchased are not deemed sufficient to qualify for volume discounts. We also do not have the benefit of getting better dairy pricing using the Special Milk Class Permit Program for wholesale producers. So we find ourselves in a bind with respect to our ingredient costs.
For perspective, we used to procure butter at $2.99/lb as recently as October 2020. Today, the best price we can find is $5.50/lb. That’s a steep 83% increase over a 36-month period. We use approximately 4,000lbs of butter per year, so we definitely feel it. And it’s not the only thing that’s been going up. We have seen comparable increases for all dairy products, eggs, chocolate, sugar and flour.
As a small business, we really only have a few limited tools for dealing with such a steep climb in ingredient prices:
Look for cheaper alternatives for our ingredients. This is absolutely not an option. We cannot and will not compromise on the quality and taste of our products.
Reduce the portion size of our desserts. I understand that some manufacturers have taken this approach, especially if you are an industrial-scale producer, slightly-reducing portion sizes can have a dramatic impact on your bottom line when you are selling tens of thousands of units. We don’t believe in this either. Shortening an eclair or reducing the size of a cookie by 5-10gs doesn’t make a big difference to our total ingredient cost. Our products are generally labour-intensive and that’s where the value comes from.
Increase selling price. Since we cannot compromise on quality, this is really the only tool left for us to use. In 2022, it was our first year ever where we had to increase the price twice during a calendar year. We certainly were not alone. This was a direct response to the Canadian Dairy Commission’s bi-annual price increase.
We have taken several measures to keep the cost of our products as low as possible:
We avoid delivery services for ingredients where possible and we pick them up ourselves from the warehouse or directly from farmers.
We have reduced our menu to include only the best-selling items. We’ve doubled down on seasonality and introduce special items for certain periods of the year. This helps to reduce waste while ensuring high product quality for the items that we do make. Offering strawberry items in the winter not only do not make sense financially, but it simply won’t be as tasty as when we have an abundance of local berries in the summer.
Reducing operating hours. This is a big one, and though many may find it peculiar to only open 3 days in the week, by shortening our hours, we can keep our labour costs lower. As a result, we have a much better work-life balance and we’re able to focus all our attention into producing exceptional goods throughout the week.
Please understand that when small businesses make changes or increase prices, it’s because it’s out of necessity. It’s entirely due to your support that we can continue what we’re so happy to do. Thank you, truly.