If you’ve looked at the predicted restaurant trends for 2024, you’ve undoubtedly come across the ubiquitous plant-based menu. I have to say, at this point, I think we should take it off the “trend” list and consider it an integral part of our culture. Today, restaurants embracing plant-based and vegan fare are simultaneously supporting health-conscious generations and the planet. Meat production, after all, accounts for over 55% of the greenhouse gas emissions in the entire food production industry.
They’re also helping enhance their bottom line. Why? Because the price of beef is on an upward trajectory and is expected to continue to rise in 2024. Let’s explore where it’s been, where it’s headed, and what restaurants are doing, considering little relief.
The Price of Beef in 2023
It started with drought. Actually, it started with the pandemic, but that’s a story we’d like to leave behind as 2023 comes to a close. So, this year, ranchers faced severe drought that led to reduced production and herd size, resulting in soaring prices. Thanks to elevated prices and the increased demand as everyone fired up their backyard grills, the summer of 2023 saw some of the highest beef prices in history, as wholesale prices soared well above $300/cwt.
Currently, live cattle prices in Chicago are nearing a record at about $1.79 per pound, according to the Financial Times. And the western U.S. continues to face some of the worst dry spells seen in 1,200 years. At the end of December 2022, the stored hay in the U.S. had reached the lowest level since 1954. Add on the high global price of grains that accompany the war in Ukraine, and you can see why ranchers are reducing their herd size, particularly in states like Texas and Kansas.
The Price of Beef in 2024
According to the USDA, food-at-home prices are predicted to increase by 1.6%, while the estimated food-away-from-home prices see a 4.3% rise in 2024. Beef prices, however, lead the pack. In September, beef prices were up 28.6% year over year, while chicken prices were down 23.5%, as reported by Gro Intelligence. Pork prices are also down 10% year over year.
Some of the current conditions affecting beef and meat prices include Proposition 12, California’s animal welfare rule, and the decline in the cattle population. The forecast for 2024 is that the cattle market will hit a 60-year low as their numbers continue to shrink. And, as the economic certainty of supply and demand tells us, that does not fare well for beef prices in 2024.
The weather will also play a critical role in prices. Another year of drought and poor crop production could catapult prices come spring or summer. On the positive front, El Nino is anticipated to continue through the spring. This translates to drought improvement across the Southeast, Gulf Coast, and Texas due to wetter-than-average conditions. Unfortunately, drought conditions are expected to persist in portions of the central U.S., the northern Great Plains, and the Rockies.
Restaurant Business reports that the average price for a burger in America is about $16. As we know, at some point, consumers can no longer keep up with increasing prices, no matter the cause or how much they like their beef. As a result, restaurants are getting creative, looking to add additional vegetarian dishes, reducing portion sizes, changing recipes, or altering menu items.
One shift for some operators is turning to cheaper cuts of high-quality beef like flatiron steak or tri-tip instead of strip steak. Smoked brisket and short ribs are also popular items. The good news is that today’s customers value global cuisine and fusion flavors, making experimenting with different cuts of beef easier. According to Technomic, some of the most popular flavors incorporating beef include Lebanese, sriracha, Buffalo, mango, and Tex-Mex.
Others offer 7oz Certified Angus Beef Prime sirloin, elevating the top sirloin while still finding affordable prices. Many offer customers upgrades in menu items, such as a choice of a New York striploin or filet, for an additional cost. Reducing portion sizes may translate to a 7oz burger patty going to 6oz.
Today’s customers also care about the sustainable and responsible production of beef and how modern farming practices can reduce the environmental impact. They also consider animal welfare and socially responsible animal raising. In light of this, many restaurants share their sources and stories, such as the rancher who raises the beef they serve and their sustainable practices.
In light of the continuing price pressures and economic challenges, restaurants are expected to continue to use their creativity to come up with menu items that excite their customers without reducing demand due to escalating prices. For many, that may translate to more plant-based and vegan offerings.
Do you know how your local competitors are pricing their beef and the changes they’ve made to their menus? While it’s one more task on your manager’s plate, it’s an important one to consider. If you find yourself significantly outpricing other restaurants, you may find a diminishing demand. And, if you’ve yet to embrace some plant-based items, you may find groups going elsewhere due to their friend who’s a vegan.
Fortunately, F&B Insights makes it easy to monitor neighboring and national restaurants. With the world’s largest database of menus, you can always stay in the know and even receive notifications when a local restaurant changes its menu.
To learn more about F&B Insights or to schedule a consultation, contact F&B Insights today.