Last updated on June 15th, 2023
Finally some good news for senior living. Occupancy rates are bouncing back, with steady increases for three quarters. The average senior living occupancy rate is now 80.6% in independent and assisted living communities.
At the same time, the US is seeing the highest rates of inflation in forty years. Food prices are a large contributor to this shift, with at-home food costs rising 10.8% over last year. Likewise, energy costs, including fuel oil needed to transport food to and from processing plants and also to consumers, rose at an unprecedented rate of 30.3%. Food service is an essential component for senior living communities and with occupancy rates returning to pre-pandemic levels, it’s essential to work with the right partners to manage these expenses and remain financially stable.
What’s Driving Food Cost Inflation?
There are two ways to measure inflation in the US, the Consumer Price Index (CPI) and the Personal Consumption Expenditures Index (PCE). The CPI measures the out-of-pocket consumer costs for food, housing, and other items, while the PCE index measures the cost of things people consume but may not pay for directly, like health care, which insurance and government benefits help to cover. According to the Consumer Price Index, consumers are paying 8.6% more for household goods today than in 2021.
What’s driving the increase? The rising cost of gas is a big influence. The US transports most of its food by truck, and while gasoline prices fell by 1 percent in April, they had hit a record high of 18.3 percent in March. But here are some factors you may not have thought about:
1. The Price of Corn
In April 2022 trade corn futures topped $8 a bushel, the highest price in nearly a decade. In hopes of limiting the gas spike stemming from Russia’s invasion of Ukraine, the Biden administration said it would allow for high-ethanol gas to be sold this summer.
Ethanol is made from the same corn used for animal feed. Feed is 60 percent of the cost associated with raising livestock. So for meat and poultry, those higher costs are passed on to the consumer.
2. The Avian Flu
Poultry prices are also being affected by the worst avian flu outbreak since 2015. To control the outbreak growers have killed 29 million affected birds, three-quarters of them egg-laying hens. Causing egg prices, a usually affordable protein source, to triple. Experts believe chicken and turkey prices will remain elevated for the rest of 2022.
3. California’s Ongoing Drought
California produces a quarter of all the United States’ food. The state is entering its third straight year of what’s known as a megadrought. Water agencies contract with the federal government for certain amounts of water each year. This year the government has said it has no water to give to farmers, causing many to scale back plantings or plant nothing at all. Less water, higher fertilizer, labor, and seed costs are causing many farmers to say they can’t make a profit even with consumers paying a higher price.
Ways to Save in Senior Living Kitchens
While there isn’t much that can be done to lower inflation. Here are some ideas to maximize your budget and keep food costs low in the kitchen.
Prioritize Scratch Cooking
There’s a reason why we prioritize scratch cooking here at Culinary Services Group. Not only is it healthier for residents, there’s also a natural cost savings to doing prep work in-house. Prepared food is convenient, but may have added sodium and preservatives and usually has added cost, especially during times of high inflation.
Prep fresh meats and vegetables in the kitchen to reduce food waste. Buy larger cuts of meat and have your kitchen team break them down into portion sizes. Scraps can become stock for soups and sauces. Leftover bread can become freshly made croutons for salads. A good food service director and chef manager can find many ways to maximize raw ingredients while maintaining a budget.
Make the Menu Work
Your menu likely controls your entire kitchen operation. Using a recipe management system like the one Culinary Services Group uses can also help waste less food by managing the yield needed for every recipe. Cook only what you need! Our partnership with US Foods provides us with many tools to help us to understand what is driving the cost in your community and identify savings. While it’s still important to have plenty of selection, there’s no need for your kitchen to be the Cheesecake Factory. Consider consolidating your menu where possible.
Compliance is Key
Practicing proper food storage and food safety keeps your kitchen compliant and ready for inspection. It can also stretch your food budget and make it go further! Simple things like labeling all perishable ingredients with the date they’re received, the date they’ll be considered expired, and the servings per container, makes sure that food gets used when it’s at its best. Your food service team should also practice First In First Out (FIFO) to reduce spoiling. Using a recipe management system can also help waste less food by managing the yield needed for every recipe. That way you only cook only what you need!
How Partnering with a Food Service Provider Can Manage Costs
Partnering with a food service company like Culinary Services Group can offer many communities peace of mind during times of high inflation. One way we are able to do this is through guaranteed costs. No matter which contract style you select, we guarantee that raw food costs, supplies, and corporate service fees will stay the same for the length of your contract. Our full-service contracts also enjoy guaranteed labor costs for the length of their contract. While some food service companies do pass rising costs on to their clients, we believe offering guaranteed costs on these items provides a level of transparency that helps our clients maintain their budgets. If you agree that’s the right way to do business, contact us.
