Rising Ingredient Costs Eat Into Bottom Line For Some Small Food Businesses

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Some small food businesses in London say the high cost of ingredients are forcing them to get creative — and even close their doors.

Jocelyn Brock and Wayne DeGroot have been running zen'Za Pizzeria downtown for eight years. With the rising cost of key ingredients like olive oil and cheese, they've decided it's time to put the business up for sale.

⁘It really increases the cost to operate a small business,⁘ said Brock. ⁘The olive oil that we started purchasing when we first opened our restaurant used to be $17.99 for three litres. And for that same jug of oil, it's now $45.⁘

In Canada, the average price for one litre of olive oil has more than doubled over the past three years, to $15.93 in March 2024 from $6.62 in March 2021, according to Statistics Canada's recent report on monthly average retail prices .

Additionally, the price of cheese has nearly doubled, along with a 50-per-cent increase in the cost of pizza boxes, according to Brock.

Although the couple tried to keep menu prices low to stay competitive, Brock and DeGroot eventually had to raise the prices on the menu to stay profitable.

⁘I don't think people are really always that willing to pay that much for something that they might think of as a grab-and-go kind of food even though we're not really a fast food restaurant,⁘ said Brock. ⁘We have lots of friends that own restaurants that have had to close in the last year,⁘ said DeGroot.

⁘When we add rising costs on all the major expenses, an economy of customers struggling with affordability and high indebtedness, much of which would have been taken on through COVID, it all acts together to strain profitability and drive restaurants closures,⁘ said Kris Barnier, vice president of Restaurants Canada in Ontario. ⁘We've seen a surge in bankruptcies and restaurants are leading the way unfortunately, and we're seeing a lot of restaurants just close.⁘