How Restaurants are Handling Costs Amid Rising Tomato Prices

With continuous surge of the price of tomatoes and other vegetables, restaurants are gradually feeling the pinch of high operational cost and sales margin. Restaurant India spoke to restaurant owners to find out what’s cooking behind the kitchens these days.

Customer is at the Top

“Although our costs have increased, we have not passed on that cost to our guests yet because we are waiting for the situation to get better and the prices to stabilize, we are waiting for the government's intervention for the situation to get better,” shared Sharad Madan, Director and Co-founder, Khubani by pointing that Khubani is a luxury dining space and our eminent priority has always been on getting the best produce for our cuisines. However, this has become a challenge due to the limited supply of good quality tomatoes as they are highly perishable and essential commodities.

The tomato crop is currently undergoing a seasonal shift after growers reduced planting due to losses incurred last year. Also, rain in key producing states has severely caused a supply and demand gap. These fluctuations in tomato prices have led to an increase in our overall operational cost. Last week, QSR chain McDonald’s has removed tomato from its burger menu and other key items on the menu.

Quality is Priority

"Amidst the tomato woes, restaurants find themselves grappling with soaring prices and a restricted array of choices! As a chef at Cafe Delhi Heights, we understand the predicament all too well. We strive to navigate these challenging times by sourcing the finest ingredients available, exploring creative alternatives, and crafting delectable dishes that continue to tantalize taste buds, added Chef Ashish Singh, Culinary Director, Cafe Delhi Heights who has not done much changes in the menu.

Although the prices of tomatoes have skyrocketed and restaurant owners have no idea how long it will last, they are still trying their best so that it does not affect their standard of service and serve customers their favorite dishes at affordable prices.

Driving Biz on Relationships

“We take these things as routine. Such situations are temporary and last sooner. We don’t compromise on its use for any of the recipe preparation as we don’t want our customers to face the results. This increases our costings but then this is what we call hidden expenses and there is always a room for it. This has not affected sales so far,” mentioned Akash Kalra, Founder at the famous United Coffee House Rewind.

He also added that since the brand has multiple locations, they have settled vendor base to work out the ingredients even at higher price. “Our pricing in the menu are same as of as now, and we don’t intend any change till the situation becomes absolutely beyond control,” he clearly pointed.

Sharing his view on the same, Amit Bagga, Co-Founder, Daryaganj shared, “There is impact on our business but we haven’t changed or modified the menu as yet. We had done a signed an annual supply contract for our vegetables with Hyperpure by Zomato and they are honouring the same price and specifications. We are not facing any issue as of now.”