Thai Ha started selling super-crisp chicken wings and boba tea in clear plastic cans out of the red, boat-shaped Pho Bac restaurant in Little Saigon in April 2020. Pho Bac had closed that location due to the pandemic, and Ha, who’d been setting up his businesses Mangosteen and Boba Bar at farmers markets and music festivals around Washington, worked out a deal to take over the space.
Things went well at first. Customers filed in and out, leaving with containers filled with wings covered in fish sauce and chili peppers. And people came to love the boba milk tea, fresh sugar cane juice and mango slushies in the signature, branded Boba Bar cans.
And though running the business had its costs, Ha could buy wings for only $1.99 a pound, and he was making a good profit. But then the prices for wings started going up.
As the pandemic dragged on, wing prices increased by leaps and bounds, spurred by the myriad supply chain issues caused by the coronavirus — such as the several times Tyson Foods (a meat producer that estimates it butchers around 45 million chickens per week) shut down operations at major meat processing plants due to COVID-19 outbreaks, hurting supply. Ha’s margins grew slimmer and slimmer. In the last few months, his wing prices have gone up an additional 75 cents per pound to $4 — double what he used to pay.
Ha found himself losing money on every box of wings a customer carried out the door, but he was too afraid to lose business by raising prices or taking wings off the menu.
But after a few months, unwilling to keep bleeding money, Ha shut down operations at the boat restaurant on July 24. He’s now just selling drinks and food at music festivals around Washington — at a higher price than he says he could get away with at a permanent location.
Ha’s struggle to manage increasing ingredient prices has become common in the restaurant community in the Seattle area, and wings aren’t the only thing that’s gotten expensive. Restaurant owners and chefs say prices of many ingredients — from sushi-grade fish, to cucumbers, to cooking oil — have shot up, especially in the last few months, as restaurants across the country have reopened and demand has spiked. Like Ha, these chefs and owners say customers balk at significant price increases, so in many cases, restaurant owners have been absorbing the extra costs. In other cases, chefs say they can’t get certain products at all, regardless of price, and are forced to take items off their menus.
The labor shortage has also made reopening at full capacity impossible for some restaurant owners, and increasing wages are another major contributor to their overall cost increases. In the near future, many say they will likely have to increase the prices of their menu items, and dining in the Seattle area will become more expensive.
Economic experts say supply issues tied to COVID-19 outbreaks at factories, increases in gas prices, higher labor costs, extreme weather affecting crops and even a shortage of shipping containers are among the reasons for the price increases and shortages of restaurant necessities.
But Debra Glassman, a professor of finance and business economics at the University of Washington, says a big driver of recent food price hikes is increased demand generated by chefs restocking freezers and pantries as restaurants reopened with fewer pandemic restrictions.
At the same time, the labor shortage is driving up transportation costs. For example, Glassman says many truckers, who tend to be older, have been reluctant to return to spending long hours behind the wheel, causing a trucker shortage that has driven up trucking costs.
Glassman says it’s unclear if and when food prices will go down, but she doesn’t expect the labor shortage to be resolved soon. And in the cases where wage increases are causing price hikes, they’re unlikely to go back down because people don’t take pay cuts easily, especially when the market is flooded with jobs.
Ingredient price increases drive up prices for consumers
Price increases Seattle restaurant owners are seeing in fish and shellfish — important commodities in a city known for its seafood — reflect the cost of recent increases in demand.
Taichi Kitamura, the chef and co-owner of Sushi Kappo Tamura, says he didn’t see huge price increases in seafood during the beginning of the pandemic, but more recently, the price bumps have been devastating to his bottom line. In early May, his purveyors started charging as much as $22 per pound of wild king salmon — more than double what he was previously paying. Spot prawns, a Sushi Kappo Tamura specialty that Kitamura serves laid on rice for nigiri or steamed with a sake-butter dipping sauce, also cost twice as much this year, at $30 per pound instead of $15.
Kitamura has recently raised prices a little to combat rising costs: The price of the king salmon nigiri went from $6 to $7, and the spot prawn sashimi from $6 to $8. But with the prices of the fish and shrimp doubling, he says he’s making less money, even with the menu price increases.
Similarly, Steven Ono, owner of Ono Poke in Edmonds, recently increased the prices of his poke bowls, most of which range from $12.50 to $19.50, by a dollar.
The prices of most of the fish Ono buys have gone up by around 25% since the pandemic started. And the price for ahi, one of the main types of fish he serves in his poke bowls, went up 30% just in July from a price point that was already 10% higher than before the pandemic. Since fish is the most expensive ingredient in a poke bowl, a $1 increase doesn’t come close to covering the added costs.
But Ono says he’s afraid to raise prices any more. “People get up in arms when you raise prices,” he says. “We had a slew of negative reviews for raising our prices by $1.”
Ethan Stowell, who owns over a dozen restaurants in the Seattle area including How to Cook a Wolf, says he’s trying to keep prices stable at his restaurants for the same reason, because “customers don’t understand price increases.”
Along with seafood, the price of oil used for deep-frying has spiked dramatically. Bobby Palmquist, the executive chef of Sea Creatures, a group of Renee Erickson’s 10 restaurants in Seattle, says the cost of canola oil has doubled in the last three months, forcing him to increase the price of an order of fried oysters at The Walrus and The Carpenter by a dollar.
And Ono says the prices for vegetables like green onions, white onions and salad mix have also gone up, with the price of English cucumbers doubling since the pandemic started.
Price increases haven’t just been tied to food products. Chefs in the Seattle area report price hikes on nitrile gloves and to-go boxes, which they’ve been running through like crazy throughout the pandemic.
Sometimes, these price increases cause restaurants to lose money. In other cases, chefs are forced to find alternative ingredients.
Kitamura says he used to “take pride in not serving farmed salmon” at Sushi Kappo Tamura, but recently started offering farmed salmon from New Zealand to give customers a less expensive alternative to king salmon.
At Rhein Haus, a Bavarian beer hall with locations in Seattle, Tacoma and Leavenworth, chef Kelly Wilson says he switched from using dry-aged fresh ground beef for his burger patties to regular frozen ground beef due to rising costs.
And though it’s not exactly a menu change, Ha, of Mangosteen and Boba Bar, stopped using the signature Boba Bar branded cans for his drinks — which he was directly importing from a producer in China — when the transport cost for a shipping container filled with 100,000 cans jumped from $3,000 to $16,000. Ha says this is due to the shipping container shortage.
Many reasons for shortages
Beyond price increases, instances where food purveyors tell chefs in the Seattle area they’re completely out of ingredients are becoming more common, forcing restaurants to work with reduced menus for days or even weeks.
For most of July, Sushi Kappo Tamura didn’t serve seaweed salad because Kitamura says he couldn’t find hijiki, the seaweed he makes it with, anywhere.
Ono says that until recently, in the five years Ono Poke has been in business, his suppliers had never once been out of a fish he’s asked for. But in the last couple of months, his vendors have run out of salmon, hamachi (yellowtail) and ahi, three of the most important fish on his menu, on different occasions.
And for seafood, an unusually hot summer has exacerbated the pandemic-related supply issues. The heat wave that hit the Pacific Northwest in late June baked clams and oysters alive on some beaches and made other oysters unsafe to eat due to bacterial infestations.
Palmquist says there have been days this summer when he’s had only two varieties of oysters on the menus of Sea Creatures restaurants because local oyster farmers weren’t harvesting.
Shortages have even spread to foods as mundane as tater tots, which Wilson’s food purveyors have periodically run out of during the last month due to supply chain issues. He says some of his customers get frustrated at the servers in his restaurants. “I mean, who could understand that you don’t have tater tots?” Wilson says.
When Wilson went to a nearby outlet of U.S. Foods Chef’Store, a popular place for chefs to buy wholesale ingredients, to try to find tater tots during the first weekend of August, he found the freezers devoid of tots and the shelves mostly empty.
A spokesperson for U.S. Foods said that in early August, Chef’Store locations in the region were out of some products due to a COVID-19 outbreak that shut down a United Natural Foods, distribution center in Centralia, which supplies many Chef’Store products.
A video Ha took Aug. 8 at the Chef’Store in the Seattle area shows a produce section completely empty besides a pile of carrots stacked on a pallet. Due to the outbreak, Ha said Aug. 16 that U.S. Foods hadn’t delivered any food to him since the beginning of August.
Ono says ingredients are becoming harder and harder to come by as more restaurants open up.
“I’m sure that sometime soon, there’s going to be a day where we’re going to have to close because we can’t get any fish that day,” he says.
And the prices are still going up.
“There’s no end in sight,” Ono says. “Unless things change in the next couple of months, we’re going to have to increase prices again.”