According to an internal report, the owner of Burger King and Popeyes sees prices for key ingredients like beef, mayonnaise and bacon increasing.
Reports by the Restaurant Brands International Inc. can see significant inflation across all regions on protein and oils' compared to historical five-year averages, according to a Bloomberg News report on commodities dated May 17.
The company said in the report that '' price inflation across the protein market complex has even exceeded our most bullish forecasts.
The company, which also owns the Tim Hortons chain, said that while dining out is returning high to pre-Covid business levels, grocery sales are also high. That, at the same time, is driving up supply chains as an extremely tight labor market, including truck driver shortages, has incurred travel expenses.
For a number of reasons the world is facing increasing commodity costs -- and we are managing these like we always do, Restaurant Brands wrote in an email. We have a number of strategies to mitigate cost increases and as a practice, we don't talk about them for competitive reasons.
The Toronto-based company also said that it takes a 'long view' when developing and managing the purchasing strategies to help smooth commodity markets out.
The restaurants are raising prices amid inflationary pressures across the industry, with Chipotle Mexican Grill Inc. last week announcing it increased the prices across its menus. The climb is not isolated to restaurants Consumer goods makers have cited many of the same dynamics that play in their own recent round of price increases.
Mayonnaise is one of the ingredients that is risen in price due to higher prices for soybean oil, a key input. It worked to reduce processed oil, but noted that the availability of processed oil is becoming a 'big risk, it replenished its mayonnaise with a higher hedge price in order to ensure supply for five months.
The upward trend of beef prices is expected to continue in North America during the second half of 2021. Restaurants Brands, which is almost all finished, projects an increase of 8% in brand prepared beef goods for the first half of this year versus the second half for store owners. At the same time, pork prices have risen amid stronger demand from China, higher dining costs and an increase in feed costs.
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