Wells Fargo’s Inaugural Super Bowl Food Report
What will it cost to put out that appetizing spread for the Big Game this year? It will cost about 8% to 14% more than 2021, depending on whom you draft to be on your team for one of the biggest food events of the year1.
You will need to work on your blocking and tackling for this year’s big game. Your offensive line of carbohydrates and vegetables will need to keep your rampaging snackers from sacking your quarterback of proteins. While the cost of chips and dips, vegetables and other appetizers are up approximately 2% to 5%, they represent your best value to feed those hungry feasters who are all fired up by the clever ads or big plays. The action on the gridiron will be tame compared with the action on the grill, where prices are up 12% to 18%. Who’s to blame? Just like an armchair quarterback, everyone has an opinion (sometimes powered by the beer or wine, up 4% to 5%). To say the least, it is as confusing as a broken play with three separate penalty flags on the field and instant video challenges.
Let’s work our way through your shopping list:
On the table
- Potato chips: In periods of increased supply disruptions and higher food inflation, the humble potato chip offers a stout defense. The U.S. Bureau of Labor Statistics’ (BLS) January pronouncement of inflation2 shows a subpar increase of 1% versus this time last year. We can thank American farmers’ and food manufacturers’ strong preparation and deft execution for keeping a lid on the price pressure.
- Guacamole/avocados: There is great news in the ever-popular avocado and guacamole category, with food inflation showing about a 1% increase from a year ago3. Most avocados and guacamole come from our Mexican and South American friends. They continue to expand production and execute, keeping the supply ample. Muchas gracias, amigos!
- Salsa: Salsa is an all-important complement to the guacamole. It will be more expensive than the chips and the guacamole in terms of price inflation. Salsa is up 6% from last year4. Once again, it’s due to labor, packaging, and shipping, rather a lack of chilis and tomatoes.
Make sure you stack your offensive line with vegetable all-stars. We’re playing “Moneyball” here for the win. Carrots, celery, and tomatoes (depending on your format and brand) are roughly the same price as last year. Between checking the BLS and Nielsen numbers5, we can see that there are lots of options that are flat (or slightly down). As a smart general manager, you should review your options to buy in bulk and prepare them yourself. This requires some prep time before the Big Game, but hopefully your diners will appreciate your Moneyball savvy.
Wings and things
The proteins are where the trouble has shown up in terms of price increases. The grill represents your spending point of pain. There are a lot of moving pieces to the price increases. Is it the “infamous Big Meat”? Or, higher feed costs for all the animals due to corn and soybean spiking close to 100% over that last couple of years? Maybe, COVID’s impact on processing and supply-chain are to blame? Of course, the answer is all those things and more. Your real question looking at the draft board as it stands is, who should you pick with your next draft choice?
- Chicken wings: There is nothing but pain in this category. The USDA6 says prepared chicken wings are up 14% to 26% (bone-in and boneless respectively). The IQF (individually quick frozen) chickens are up 26%. It would seem the IQF is the bigger loser, but that misses the point that they are still $3.57 per pound versus $7.24 (the average) for the prepared wings. Is that the sound of an air fryer I hear? A great call by the GM for drafting a diamond in the rough.
- Pork chops: I am moving pork chops up on my draft picks. The BLS is reporting that they are 7% more expensive than last year, but given protein inflation, that makes them a buy. They might not have the cachet of the next item, but steak is packing a world of pain on the pricing front.
- Steak: Steak has always been an all-star, but with a 23% price increase from a year ago, is it having a prima donna moment? The BLS shows $11.06 per pound for USDA choice sirloin (versus $8.98 a year ago). The cattle and beef industry is working both structural and temporary issues at this point. The Biden administration has announced initiatives and money to help and regulate the industry. Those could help, but they won’t help this year.
- Cocktail wieners: Here’s one that seems popular by different regions, and they are a crockpot powerhouse. The Nielsen data shows them 7% higher than last year. That moves them higher on my draft board. Maybe a couple of extra pounds in the crockpot will help you manage fourth quarter defense against those going back for seconds (or even thirds).
- Hamburger: The BLS says ground hamburger is up 17% from a year ago. It’s nation-wide price shows $4.60 a pound. This isn’t nearly as bad as the steak, but it still represents a real commitment. One of the differences for steak versus hamburger is the sourcing and the demand. The U.S. brings in meat to grind into hamburger from Australia and Brazil (to mention the big two), and the U.S. exports high-end cuts to Asia. These market dynamics led to less price pressure for hamburger versus the steaks.
Shrimp on the Barbie
I guess there are two ways to look at featuring shrimp at this year’s big game. It is up sharply from last year’s $3.60 per pound (at the wholesale import level, according to Urner Barry7) to close to $4.40 per pound (same index). That’s a 22% increase. However, last year’s price represented a multi-year low due to COVID reducing restaurant demand. Back in January 2018, the index showed the same shrimp being priced at approximately $4.40 a pound. That is about the same price range as today. Now, unless you are buying by the metric ton, you will pay much more at retail prices, but they should move in a relative strong relationship to what we see in the wholesale pricing.
In the cooler
- Soft drinks: Food inflation continues to rear its ugly head in the soft drink world. The labor, packaging, and transportation costs are crimping the industry’s ability to match last year’s prices. Here again your general manager skills will need to be applied. According to the BLS, the 2-liter bottles jumped the most by increasing 12%. In contrast, the 12 pack of cans is up 6%. Both represent big jumps compared to general food inflation. Even so, that 2-liter bottle represents a better value if you can get your attendees to agree on the type and flavor.
- Beer: The beer industry continues to struggle with modest demand strength and higher input costs. The BLS reports that beer prices are up 4% from a year ago. No doubt, the brewers are facing higher labor, packaging and shipping costs just like the soft drink segment, but the overcapacity in the industry has muted the price increase. Not a bargain like the carbohydrates and vegetables, but it helps the budget.
- Wine: The wine industry mirrors the beer industry with its woes. The BLS reports wine prices up 3%, just like beer. Our California wineries and vineyards continue to struggle with much higher labor, water, and transportation costs. However, global supply capacity is making it difficult to pass those cost increases along. This will definitely work in our favor as we prepare for the Big Game.
Tips for keeping costs low
- Go for the guac. With avocado prices holding nearly steady since last year, this is a good bang for your buck.
- Pick pork. Although prices are up 7%, it’s a bargain for your meat this year. Things to chew on: pork tacos, pork meatballs, and pork sliders.
- Bring on the beer. Prices are somewhat stable. Brews will be a good buy for your buck.
1Bureau of Economic Analysis retail food spending data series
2Consumer Price Index Summary – 2021 M12 Results (bls.gov) for all references to BLS
3Nielsen Scanner data as of early January 2022
4Nielsen Scanner data as of early January 2022
5Nielsen AOC incl Conv as of 1/02/2022
6Market News – Livestock, Poultry, and Grain – Retail Reports (usda.gov) for all references to Nielsen
7https://www.comtell.com/User/Dashboard – subscription based