Thomas Haas has never experienced such high food prices in his more than 40-year career.
“We calculated and [the price increase of our ingredients] between 28 percent, the lowest, and 71 percent, the highest, in one year,” said the founder of Thomas Haas Fine Chocolates in Vancouver.
He adds that over the past year they’ve seen price increases of over 30 percent for dairy ingredients, chocolate and fruit and a 71 percent increase in the price of eggs due to bird flu.
This week, he says, they’re estimating an average 20 percent increase in ingredient costs.
Haas is one of several bakers in Vancouver to report annual cost increases of 30 to 40 percent since the pandemic began — a big difference from previous years, Haas says.
Now they are speaking out hoping to draw attention to the issue and let customers know what’s behind the price hikes.
In the past few weeks, Haas has shared his frustration publicly on Instagram.
“[Cost and price increases] will just affect everyone and especially them [customers] we value it.”
Cut profits, cut costs
Sergio Salamonovitz, pastry chef and co-owner of Trafiq Cafe and Bakery in Vancouver’s Riley Park neighborhood, says the increases are “steeper than [he’s] ever seen”, although he has been in the industry since 1999.
“It’s not making it easy for us, or our margins are obviously as tight as they are,” he said, adding Trafiq took a different approach to the problem: cutting their profits rather than raising prices.
He says the majority of Trafiq’s customers are regulars from the neighborhood.
“Because of the economic challenges we’re all facing, we want to be a place where people don’t feel like they’re being pushed into buying something for more,” Salamonovitz said.
“We’re not here for a year, we’re hoping to be here for another 20 years,” he added.
“So not every year has to be the most profitable.”
Haas says he’s tried not to raise prices, but items like a standard croissant have recently jumped from $3.40 to $3.80 — still not enough to cover the jump in costs.
“It is a [11-per-cent price] are increasing, while our ingredients are up an average of 27 percent,” he said, adding that they have reorganized production processes to be more efficient and save costs.
“A New Way of Working”
Haas says he attributes the continued rise in costs to a lack of competition among vendors.
He adds: “Once [prices] go up, they never come down again, although everything else has taken care of itself.”
James Vercammen, a food and resource economist at the University of British Columbia, agrees that the increases are likely due to decisions made throughout the transaction process.
“You have wholesalers, retailers and big food manufacturers, and it seems like they might all get a bigger slice of the pie than they have in the past,” Vercammen said.
He says once inflation kicks in and costs start to rise, suppliers start getting used to high prices.
“It’s like we have a new way of working and it’s difficult to go back to the old way because [companies] don’t want to stay behind,” he said.
Vercammen hopes prices will eventually level out, but notes that continued price increases may require a more drastic solution.
“We shouldn’t hope for a recession… [but] The Bank of Canada has been telling us all along that if we’re going to bring inflation down really fast, we might need something serious.”
Vercammen explains that while high prices fall in a recession, the risks to other aspects, such as employment, outweigh the benefits.
He adds that the price of flour in 2004 was about the same as it is today, but of course those prices went down in a slow, gradual decline.
“I don’t know if we will see a decline [in prices soon]. We can just hope for less pressure [to commodity markets].”
Meanwhile, Haas says he will continue to speak out on the issue, which he fears will affect his customers.
“We are working hard to ensure that the increases have minimal impact on these customers.”
