Going Up!

      Over the past month I have received a number of press releases and announcements, as well as having had several conversations with ingredient suppliers, concerning their need to implement rather large price increases for 2009.. For as long as I can remember, ingredient suppliers have been getting beat up by their customers to maintain or reduce the cost of ingredients as part of their efforts to maintain profit margins while not passing on heavy price increases to the consumer. For the most part, flavor and ingredient suppliers have "gone along to get along" with this system, especially with their larger customers.  .I think those days may be coming to an end.

      The recent economic downturn, compounded by years of suppressing prices, now find flavor and ingredient suppliers facing  a double edged sword...... they must implement large price increases and  risk long standing business relationships with long time customers, or continue the "go along to get along" routine of past years and face severely declining profits and further internal budget cuts.

      So, the next time one of your current preferred flavor or ingredient suppliers arrives with a hefty price increase, don't automatically throw your hands up and start talking about changing suppliers (there always will be a lower cost supplier), but instead listen closely to the explanation, check their pricing history against recent across the board increases in the cost of manufacturing and then weigh that against the quality of that suppliers' product, service, and dependability over time. You may discover that even with the price increase, that supplier is still your best bet.