How businesses can overcome the rising costs of produce

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All of us have felt the effects of inflation recently, and probably most notably in the food we buy. With inflation set to reach 5.4% by the end of 2025, it’s not just consumers who are feeling the pinch, hospitality businesses are also bearing the brunt of price hikes from producers and suppliers.

In fact, wholesale food prices are up 36% since 2020, with increases on virtually all food products due to political, environmental and logistical factors. This year alone, the price of beef has increased by 24.3%, coffee by 18% and butter by 19%. Prices are set to increase by a further 4.2% over the second half of 2025.

As well as financial pressures from increased minimum wage and national insurance, hospitality businesses are absorbing much of these increases. Still, the hikes will also inevitably have a knock-on effect on the price of eating out for consumers.

Why are food prices increasing?

• The Autumn budget.

The increase in the minimum wage and national insurance this year has not only affected hospitality businesses but also employers across the whole food system.

• Environmental disruption.

Long periods of drought in the UK have resulted in low yields this year, which in turn, has pushed up prices. Adverse weather conditions in other parts of the world have impacted other imported items such as cocoa and coffee.

• Political instability and tariffs.

This year has seen Donald Trump impose significant worldwide tariffs, resulting in significant repercussions for trade, including food products such as beef and canned goods. Brexit-related disruptions, political tensions in the Middle East and the war in Ukraine have also negatively affecting imports and exports worldwide, increasing the price of produce.

So, how can hospitality businesses address this cost increase and ensure their operations continue to run smoothly? Here, we explore how streamlined processes and specialist software can help.

Cut food waste
Cutting food waste is the quickest and most effective solution to reducing the amount your business spends on food. Track, measure and tackle the food waste that your business produces and ensure all staff are on board with your new processes. With food waste management software, businesses can implement simple waste routines without losing precious time. Track and record waste across multiple sites to identify trends and identify which dishes generate the most waste.

Why not challenge your chefs to get creative by experimenting with ingredients? Cross-utilising items across your menu to use up every product you buy not only reduces waste, but it also minimises over-ordering, keeping costs down.

Not only does reducing food waste cut your food costs, but it also strengthens your business’s sustainability commitment, appeals to eco-conscious diners and boosts your reputation.

Why not download our in-depth guide to tackling food waste here.

Accurate stock taking
To effectively reduce food waste, hospitality businesses need to ensure that produce is ordered only when necessary, and not in surplus. Inventory management software is ideal for this purpose and helps hospitality businesses stay on top of stock levels, without hours of labour-intensive stock takes.

Inventory management software not only minimises human errors but also accurately automates essential produce orders when needed, reducing food waste from overordering. Additionally, it provides businesses with full visibility of all stores, including fridges, freezers and cellars, from a single central system, reducing admin time so your staff can focus on what they do best – serving your customers.

Reduce food costs with menu engineering
Design your menu with a financial strategy in mind to ease the burden of growing food costs.

With menu engineering software, businesses can identify their best-performing dishes and those which aren’t returning a profit. Identify costs per item in real-time, based on your most and least ordered dishes and then delete the dishes that don’t sell. By using real data and tailoring your menu to your customers’ preferences, your business can maximise profits while minimising the impact of rising food costs.

Accurate reporting
Gain full visibility over sales and profits with accurate data insights. Reports from hospitality software allow for quick, proactive decision-making based on real-time data and forecasted sales.

Reduce the time and resources spent on admin and understand where your business is losing money, how much it’s spending on food, what is costing the most, and where it can make savings.

Procurement and purchasing software
Simplify purchasing by using software to compare costs and find the best deals from top suppliers.

With procurement and purchasing capabilities, your business can streamline multiple orders from different staff members across various locations into a single comprehensive order form, saving time and reducing costs. And all the while, maintaining the quality ingredients you buy from your excellent suppliers. This allows you to gain control over orders and build stronger relationships with suppliers through seamless order management.

Buying ingredients in bulk is also a sure way to keep costs down and secure stronger relationships with suppliers, who often provide discounts for larger orders.

To conclude
For hospitality businesses, these price increases may create an uncertain outlook for the coming months. But despite the challenges facing the industry, hospitality businesses can weather the storm and reduce the stress by better optimising their operations.

With clear processes in place, and specialist technology, like Kitchen CUT on hand, hospitality businesses can keep costs down and reduce the knock-on costs for consumers, to retain customers and boost profits.

Find out more about the software listed in this article, or the additional capabilities of Kitchen CUT, here.