PRICES TO FLY SKY HIGH……….

FROM KOSHER TODAY MON, MARCH 14, 2011

Kosher Consumers to Escape Steep Food Price Increases for Passover, but Watch Out for Post Passover Period
New York… Concern that steep increases in food prices will impact kosher consumers before Passover appear to be only partially correct, a survey of Kosher Today showed While there may be some increases in poultry and meat due to higher commodity prices, kosher consumers will largely escape a pre-holiday hike, namely because prices were already fixed long before the dramatic increases due to fuel increases and the unsettled situation in the Middle East. Laura Burke, National Marketing Manager for Streits, said that her company “had seen that increases were coming and planned ahead negotiating contracts with raw material suppliers to keep prices fixed for Passover.” She added: “There has not been an increase on price of Streits products we sell to our customers this Passover; they have remained the same as last year.” Some distributors and purveyors said that “consumers may have lucked out” because most of the supermarket chains tried to lock-in prices as early as September 2010. What that meant was that some manufacturers had “to eat” the higher commodity prices which were already skyrocketing months ago. Many retailers say they will not increase prices over last year, but how many follow this pledge remains to be seen. Israeli manufacturers are said to have taken somewhat “of a hit” since the government of Israel and the only Passover flour mill in Israel set much higher prices for flour in November, long after the matzah manufacturers guaranteed a lower price to retailers. One leading poultry producer told Kosher Today that he had no choice but to put an immediate price increase in effect as the cost of corn needed to feed the fowl soared.

If the overall Passover picture was brighter than expected, Kosher Today has learned that many prices will increase after Passover. One leading distributor told KT that “we plan to announce price increases that will take effect right after Passover and a second increase to be followed in about 4 months, bringing the total price increases of 2011 to anywhere between 20 to 30%.” He said that the increases on commodities, especially cooking/frying oils, wheat/corn, and sugar are so steep that even with 20-30% price increases, manufacturers will still be absorbing considerable part of the commodity price increases.” Some of the distributors felt that the full brunt of the increases would be felt during the Rosh Hashanah holiday.

However, as previously reported in KosherToday, consumers will increasingly find respite in Kosher Coupon and Groupon type sites. Web-based companies such as couponskosher.com, as well as several food manufacturers’ websites, offer print-out coupons for in-store use. Additionally, many consumers will seek out deals and specials in supermarket newsletters as well as via price comparison Smartphone Apps and social media. Industry analysts are predicting that a price increase may lead the kosher consumer to shift towards more wholesale buying, as wholesale stores such as Costco have significantly increased their kosher offerings and generally offer more savings than standard supermarket prices. The US Department of Agriculture recently noted that consumers could see food costs spiking to levels seen during the food crisis of 2008 as higher commodity and energy prices force companies to raise prices on products lining grocery store shelves. The USDA confirmed the KosherToday findings that the lion’s
share of the increase is expected in the second half of 2011 when the recent uptick for commodities, such as corn and soybeans, makes its way through the food system. Wal-Mart said it would work with suppliers to keep costs down as much as possible, and only pass along price increases when necessary. Wegmans Food Markets has said it will freeze prices on 40 products through 2011.