AP

Smaller food cos. get set for a high-priced holiday season

Nov 13, 2022, 8:40 AM | Updated: 8:43 am

Maria Short poses in her bakery, Short 'N Sweet, in Hilo, Hawaii on Nov. 8, 2022. Higher prices are...

Maria Short poses in her bakery, Short 'N Sweet, in Hilo, Hawaii on Nov. 8, 2022. Higher prices are hitting everyone this holiday, but food vendors are seeing some of the biggest increases. (Maria Short via AP)

(Maria Short via AP)

NEW YORK (AP) — Holiday celebrants in Hilo, Hawaii, might notice something different about the traditional Yule Log cake from the Short ‘N Sweet bakery this year.

Maria Short typically makes her popular $35 bûche de Noël with two logs combined to look like a branch. This year, thanks to soaring prices for eggs and butter and other items, she’s downsizing to one straight Yule log.

“It’s the same price, but smaller,” she said. “That cuts down on size and labor.”

Higher prices are hitting everyone this holiday, but food vendors are seeing some of the biggest increases. Small businesses that count on food-centric holidays like Thanksgiving and Christmas are bracing for a difficult season.

At the wholesale level, egg prices are more than triple what they were a year ago, milk prices are up 34% and butter is up 70%, according to data from the U.S. Department of Agriculture. Businesses are also paying more for everything from packages to labor.

Many owners are raising prices to offset the higher costs. But raising prices too much risks driving away the crucial holiday shopper. So, businesses are adapting: adjusting the way they make products, changing gift basket components and adding free gifts instead of giving discounts, among other steps.

Maria Short says that even for Hawaii, where the cost of living is among the highest of any U.S. state, the price increases are “drastic.”

For example, she says, the Short N Sweet Bakery is paying $123 for a case of eggs that cost $42 in October last year. A case of butter that was $91 in October ago; it’s $138 this year.

Among the ways Short is cutting costs, she’ll use a generic box decorated with stickers instead of using a customized box for her desserts. And she ordered a cookie printer rather than having bakers hand-pipe frosting, to save on labor costs.

Sarah Pounders, who co-owns Nashville-based Made in TN, a retailer of locally made food and gifts, says the local vendors who make the items she sells are facing higher prices. The cost of butter needed to make cookies is five times the price from a year ago and cardboard packaging is double.

Made in TN has raised some prices and is selling other items for less profit. Customers are already paying more for things like gas, clothing and cars, as well as services like eating out and travel, so they’re not as quick to spend as they might have been in prior years. They’re noticing the price increases, she said.

“If bread is up 50 cents you will still buy bread,” Pounders said. “But if it’s an impulse buy or luxury specialty item — if chocolate-covered cookies are up $1 — you might think twice.”

Price increases aren’t an option for her popular gift basket business. Corporations often have a $50 cap and events at hotels like weddings can have a $20 sweet spot. So, Pounders has made adjustments. In some cases, she has replaced a $20 bag of coffee, which is up $3, with less expensive hot chocolate. Or she puts one less chocolate bar in the basket.

She’s also buying more items that could sell throughout the year and less seasonal inventory like peppermint bark and hot chocolate on a stick.

“Every year is a guess, and the economy makes it even more volatile,” she said.

Eric Ludy, co-founder of Cheese Brothers, an online purveyor of Wisconsin cheese and gift baskets, faces a tricky task this holiday season as he tries to offset higher costs for packaging, labor — and cheese. Half of his business comes in the weeks between Black Friday and Christmas.

Cheese Brothers has nominally raised prices for their cheese – a block of cheddar will cost customers $7.50 instead of $7, for example. Ludy says he’ll also rely less on discounts this year and more on gifts and other giveaways.

A bit of a gamble that Ludy is taking is upping the spending limit for free shipping to $70 from $59.

“People buy enough to get free shipping, it’s a huge motivator,” he said. He hopes raising the shipping price could push the average order up to $70. But it could also stop people from clicking the “Buy” button.

“We might start to see people push back and not buy as much,” he said. “It’s a delicate balance.”

Americans eat an estimated 40 million turkeys during the holidays, according to industry group The National Turkey Federation. But turkey purveyors are facing a double whammy this Thanksgiving: higher prices plus an avian flu epidemic that is shaping up to be one of the worst in history.

Kevin Smith, owner of Beast and Cleaver, a butcher shop in Seattle, Washington, gets his turkeys from small, local farms. He says he’s paying $6 a pound for turkey this year, up from $3.80 to $4.20 last year. In addition, he only plans to sell 150 turkeys this year, down from 250 last year, due to shortages caused by the avian flu.

Still, Smith doesn’t plan to charge more for turkey than he did last year: $9 a pound. He says he has a “solid base of customers” willing to pay for more local, sustainable turkeys, but there’s a limit.

“We don’t want people to have to pay $12 a pound for turkey,” he said.

He’s raising the price of other items, like ground sausage and pates, to offset the higher costs of poultry. And while the rush of panic-buying during the pandemic has subsided, he’s still expecting a good holiday season.

“We’re still very busy,” he said. “It’s just a more stable busy.”

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

A woman pauses while shopping at a Kohl's store in Clifton, N.J., Jan. 26, 2024. On Thursday, Feb. ...

Associated Press

Federal Reserve’s preferred inflation gauge picked up last month in sign of still-elevated prices

An inflation gauge favored by the Federal Reserve increased in January, the latest sign that the slowdown in U.S. consumer price increases is occurring unevenly from month to month.

10 hours ago

This undated image provided by Mikel Desmond shows his brother Marcus Tessier, who turned up in Dem...

Associated Press

Missing teen with autism found in New Mexico, about 200 miles away from his Arizona home

A missing teen with autism has been found in New Mexico — about 200 miles away from his home in southern Arizona.

11 hours ago

A newly released report on last year’s fatal crash involving a pickup truck and a group of bicycl...

Associated Press

Report suggests steering of vehicle that caused fatal Goodyear bicycle crash worked fine

A new report on last year’s fatal Goodyear bicycle crash has cast doubts about the driver’s claim the vehicle’s steering locked up.

1 day ago

Israeli Embassy...

Associated Press

US airman dies after setting himself ablaze outside Israeli Embassy in Israel-Hamas war protest

An active-duty member of the U.S. Air Force has died after he set himself ablaze outside the Israeli Embassy in Washington, D.C.

3 days ago

Biden and Trump to visit Mexico border Thursday immigration...

Associated Press

Biden and Trump both plan trips to the Mexico border Thursday, dueling for advantage on immigration

President Joe Biden and former President Donald Trump will make dueling trips to the U.S-Mexico border on Thursday.

3 days ago

Arizona and New York attorneys feud over extraditing suspect...

Associated Press

Why Alvin Bragg and Rachel Mitchell are fighting over extraditing suspect in New York hotel killing

Maricopa County Attorney Rachel Mitchell says she isn't into extraditing a suspect due to her lack of faith in Manhattan’s top prosecutor.

7 days ago

Sponsored Articles

...

DISC Desert Institute for Spine Care

Sciatica pain is treatable but surgery may be required

Sciatica pain is one of the most common ailments a person can face, and if not taken seriously, it could become one of the most harmful.

...

Day & Night Air Conditioning, Heating and Plumbing

Day & Night is looking for the oldest AC in the Valley

Does your air conditioner make weird noises or a burning smell when it starts? If so, you may be due for an AC unit replacement.

...

Collins Comfort Masters

Avoid a potential emergency and get your home’s heating and furnace safety checked

With the weather getting colder throughout the Valley, the best time to make sure your heating is all up to date is now. 

Smaller food cos. get set for a high-priced holiday season