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Shortages & Price Hikes: Midway Vendors Caught in Food Fight Crossfires
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Will fairgoers be fed as the state fair season hits its peak in August and September? The answer is yes, but it will cost more and food concessionaires are working harder than ever to make it happen. Price increases and food shortages are plaguing the food vendors this year, a situation many expect to continue well into next year.

According to the National Restaurant Association, average wholesale food prices are 9.6 percent higher in June than the same month a year ago, which “represented the strongest 12-month increase since 2011. More alarmingly, the NRA found that, between June 2020 and June 2021, major commodities in the wholesale food price index saw large increases; fats and oils (42.2 percent), beef (41.4 percent), pork (32.7 percent), processed poultry (27.4 percent), seafood (18.8 percent), eggs (16.3 percent) and flour (12.7 percent).

Food price instability first became apparent by the end of the first quarter 2021 and grew steadily worse with little to no signs of any improvement this season.
Price Fluctuations

“The fluctuation in pricing we started seeing around March, which was when a lot of the restaurants started going back to business,” said Audrey Poole, Vice President of Business, Fare Foods. “The suppliers were not prepared for the jump in demand. We've been seeing price increases weekly, they go down but then they go up. It's a volatile market.”

“Things have started to open up again, not just the fairs but the restaurants and amusement parks, this has created a big demand,” said Carl Giordano, owner of Giordano' s Big G, a leading concessions wholesaler,. “The meat companies did not have enough kill to take care of the demand. It's not a real market increase, the demand is there and these prices are inflated. Everybody not having employees is causing problems. We've had some good fairs and people are coming out, but this problem is bigger than the fair industry.”

Food prices – especially on such iconic fair staples as funnel cakes, turkey legs and corn dogs can be compared to an EKG exam with – a jagged line of steep peaks and not very deep valleys with no visible plateaus. The end result is that higher food costs are the midway norm for 2021.

The inflationary trend is not limited to the edible, but also to presentation. Price instability is also occurring along with cost increases on resin products – utensils, cups, lids, straws, containers, etc. There are reports of shortages, although basically products can be found, not just in the needed volume. Backorders have become the norm, and while these orders do get filled, whether they'll be in time for the summer fair peak remains an open question, increasing the anxiety and stress levels of midway vendors.

COVID-19 has disrupted the entire network supporting midway purveyors of fair cuisine. The U.S. agricultural industry is being plagued by labor shortages, a problem all too familiar to the fair industry in 2021. Rising wages as well as fuel prices are compounding the problem, spurring on the inflationary forces many economists have warned about in recent years. Droughts in California and other states have cut into crop yields, which only worsen existing supply issues.

“There are a lot of supply issues, a lot of fluctuations,” said Poole. “Our main goal is to service our customers, but we've had to research alternative items when we can. Sometimes we've had to put a customer on allocation, where we can give them a little bit of something, which is better than nothing. At the end of the day, this industry is about seeing the smiling faces of the patrons at the fair and that's what is happening and everyone is working for. But it's a very challenging time.”

Across the Board

Prices are higher across the board, and some items can be unavailable at any price or at insufficient volumes to adequately feature at a fair. Instead of relying on one or two sources per season, vendors are forced to shop around – suppliers report a dramatic uptick in calls from new customers or customers who haven't ordered in several seasons. Vendors are paying prices that can be 30 percent higher or more than pre-COVID levels and sometimes resorting to measures in non-pandemic years that would unthinkable – paying retail!

Cooking oil is in such short supply that in July, Amanda Stine, co-owner of Primetime Carnival Company, having been placed on backorder, went to a Sam's Club to stock up on this essential item. The store had its own limit of seven of jugs per Sam's Club member. Primetime's employees signed up as members and she bought out the store's entire supply. “We're going through 20 jugs a week, cooking oil is liquid gold,” she said.

The store's manager objected, but the action did not technically violate any of Sam Club's regulations. It wasn't the only bulk purchase during this group shopping spree – plastic cups, lids, straws, utensils – everything she usually orders with no problem on a weekly basis -- she needed to stock up on. “Sam's Club places limits on everything you buy,” said Stine. “The manager complained but I showed him where in the member contract that allows each member to buy that limit.”

Due to persistent price increases in funnel cakes, Stine has increased the fairgoer price to $9 and $14. Her cost of apples have gone to $56 a case, up from $30. Forced to locally source pork chops, she could only find 50 where she needed 250.

Price volatility and supply inconsistency forced many to put up dry-erase menus because prices change for each event, depending on the sourcing. “We ordered new menus, and where the price is a small circle, we can dry erase the price, because we kept on putting stickers,” she said. “We are seeing different prices in the meats, the turkey legs, fruits, vegetables.”

Plastic Even Worse

“The plastic is the worst problem,” Stine continued. “You can't find fry buckets. Forget about finding printed stuff, you take what you can find. I have one case of clear cups with translucent caps. I've had to make a switch to Styrofoam cups, but you can't switch to Styrofoam for everything.”

Cups, utensils and a host of other complementary products involved in food service have jumped in price due to the crisis occurring in the global shipping industry, where the impact of the coronavirus pandemic continues unabated. According to Rob Berk of Berk Concessions Supply, container costs for his products have jumped from $3,500 to $20,000. “Most people don't realize the number of products that are imported from China. I've reached out to various congressmen to see if they can do anything about this monopoly on ocean freight but to no avail, I can get some products, but it's a premium price for shipping and they can't guarantee shipment.”

Berk has been frantically researching other suppliers but cost remains a persistent issue. “I am able to find some American manufacturers but there's been massive price increases in plastic globally. There was a spike in business that no one was prepared for, so everyone is scrambling to fill insatiable needs, and because all my competition is also raising prices, concessionaires are just glad to get product. People should be prepared for more increases. There's no other option.”

Supply Scrambles

The situation is frustrating up and down the supply chain. Ordering, now almost a daily task, is more time consuming and disheartening than ever before. “When you find somebody who has something it costs more. I'm hauling more products, like a little warehouse,” Stine said. “And my spots are way up. I'm running out of food every week.”

“Some beef has gone up almost double,” said Giordano. “Some prices are starting to come down, but they go down slowly. We're fully stocked, but not as far in advance and it's not been easy. We are buying from more suppliers than ever before and we are getting more calls from new customers and customers we haven't heard from for a while.”

As could be expected, the company prioritizes loyal customers, with other customers having to go on allocation. Due to demand, the company is also carrying more funnel cake and corn dog mixes. “If I can get it in and stock it, I can sell it. There's a huge demand for it because it's just not as available at decent prices anymore. We're using a lot of sources, I had one company where we were buying a pallet of the golden dip funnel cake mix and the company couldn't find boxes to put it in.”

Dominic Palmieri of Odyssey Food and Past President of NICA (National Independent Concessionaires Association ), now spends countless hours scrambling to get supplies for each of his spots. In a non-pandemic year, ordering a week in advance was standard, but now it's “farther out than a week, and I'm spending more time finding supplies. It's been a train wreck. I'm also sending out trucks more often, where before I used to be able to rely on deliveries. The suppliers are getting overwhelmed. Everything has gone up and prices are still rising.”

Palmieri is seeing price increases across the board. One of the strangest is what's happening with the fair cuisine staple, the turkey leg. Not only has the price per pound increased by .40-.50 cents, only the larger turkey legs are available, further increasing the costs. “Turkey legs are a double whammy,” he said.      “We are seeing a shortage of turkey legs,” Poole affirmed. “Because of the amount of time and effort in growing raw product, the birds were bigger and the legs were bigger. We're working fearlessly to service our accounts.”

Turkey legs are not the only popular poultry item affected. “Chicken wings, have totally went out of sight,” Poole added. “It comes to a point where you can't absorb these costs. Some prices are increased for items at the fairs, because it's not just the product, but the gasoline and cost of labor too.”

Prices Still Rising

At the end of July, “prices are still rising,” said Palmieri. “What's more difficult is not knowing if there will be enough moving into the end of August and into September. Instead of focusing on the rest of the business, we're calling up different suppliers chasing products and we're going to Sam's Club and Costco.”

The severity of the food supply disruptions can also be regional – are you close enough for a delivery or in what's becoming more the case this year, concessionaires picking up instead of delivery. “What part of the country can determine if you get product,” he said. “It's extremely difficult to find a trucking company because of the labor shortage, and it's not worth it to them to just pick up a palette.”

According to Palmieri, there have been rumors of price gouging by some suppliers. “People are seeing some predatory pricing. Some companies are taking advantage of this economic situation. They're not creating the shortages, but they are making it worse in some cases.”

Due to the increases, vendors have been forced to simply remove some signature dishes from their midway menus. Palmieri ceased his “Big Rib” - 2-lb. hand-cut beef rib dish whose wholesale cost increased by more than 38 percent. Usually, the midway price is $19.99. “I would have to sell it for $35, and we would have people screaming to high heaven about that price.”

Luckily, the Big Rib was the exception. Palmieri was able to hold the line on exorbitant increases for Turkey Leg, Funnel Cakes and other staples. But even that has not been an easy path to navigate. For instance, the turkey legs are grilled over mesquite charcoal, which jumped from $13 to $17 per bag. “At this one fair, that was $2,800 off the bottom line.”

Pre-pandemic, vendors were able to set a menu price for the entire route. “You have to stay profitable, so the changes are coming from week to week. You have to take every event separately, assess what the problems will be and adjust your business accordingly.”

On the midway, business is booming and fairgoer enthusiasm has never been higher. “I am seeing fairs at max capacity, there's a greater urgency, which has driven up the length of people's stay, which has went from 4.5 hours to 7.5 hours. People are planning to spend the whole day, which means more meals, more sodas, more snacks. People have money to spend, our per-caps have increased.”

It's paradoxical -- after being shut-down for a year, getting by with drive-thru events – food vendors are experiencing record setting demand. Yet, getting food to fairgoers has never been more costly or aggravating. For these concessionaires, the solution has been to keep their fair and supplier partners informed.

“You're business is only as good as your struggles,” said Palmieri. “The key this year is communications, with your fairs, with your suppliers. Everyone is going through similar problems of cost increase and labor problems. They're very understanding.”

“My word of encouragement is plan ahead, order early,” said Poole. “It's a difficult season, but customers are so thankful for us to be in business again and that gives us hope.”
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