As meeting professionals, setting customer expectations is key. We have a responsibility to educate our customers on the reasons for the increases in cost, how those increases directly impact our ability to drive savings, and what we’re doing to budget and plan for these increases in the future.
Reasons for cost increase
The average price of food in the United States has increased by 10.6%, according to the latest inflation data. As food inflation hits the highest rates since May 1979, this means that more consideration needs to be taken when considering catering options for your meeting or event. Specifically for meetings & events, the index for “Food Away From Home” (restaurants, hotels, carry-out meals) increased by over 12% since November 2021.
There are several reasons why food prices are still on the rise:
- The war in Ukraine continues to have a significant impact on the export of wheat – which is used to process flour and starch. Exports have decreased by 92% between and with the world needing to find other solutions to overcome wheat shortages, production and infrastructure costs being passed to consumers have increased.
- The uncertainty of global tariffs on imports and exports have created uncertainty of future costs of imported ingredients.
- The weather has had a major impact on growers; from unseasonably cold conditions to excessively warm conditions that sparked wildfires that have destroyed crops, warehouses, and production facilities.
- Energy prices continuing to be unstable. Customers are likely feeling the pinch in their own food costs, however, hotels/restaurants are facing shrinking margins with higher food, fuel, labor, and transportation costs.
Impact to savings
As meeting planners, we are always looking for opportunities for cost savings for our customers. Historically F&B was a place where we could make an immediate impact by removing bottled water and pre-packaged snacks, opting for buffets over plated meals, or reducing the number of banquet staff.
Budgeting for the future
While we might not be able to control costs, we can still be better prepared and informed. Here are some suggestions for F&B budget management:
- Subscribe to Consumer Price Index (CPI) reporting and monitor food cost trends that will impact your meeting budget.
- Account for a 3-5% YOY increase in the actual cost of your F&B from the previous year, i.e. a $100 dinner in last year would be closer to $117 in the current year.
- Consider your market; when meeting in a high-cost market, account for a 20% increase by market, i.e. that same $117 dinner in Detroit would be $140 in New York.
- Work with your hotel catering partners by locking in F&B menu pricing when possible.
Discover more about attendee management and how this can be key to nailing your food and beverage choices.
