🔒Friday Food Insider: Food and beverage firms brace for impact of rising gas prices

As gas prices continue to increase, many businesses are bracing for the ripple effects, watching closely to see how their operations might be affected. Jon Stein, owner of Fogtown Brewing in Ellsworth, told Mainebiz he is now adding gas prices to the growing list of challenges he's been forced to reckon with over the past couple of years. He's wary of what rising costs could mean for the road ahead. "These recent acute gas price increases are having largely the same effect on Fogtown as the past few years' inflation and rising raw materials and shipping costs have had," said Stein, a 2024 Mainebiz 40 Under 40 honoree. "These fluctuations highlight the tenuousness of our reliance on materials from all over the world, many of which come to us cheaply only at the expense of ecological or social degradation of some sort. The more we can rely instead on the amazing farmers and growers in our own backyard, the better off we are." The U.S. average price of gasoline is $3.912 per gallon, according to recent AAA data as of Friday morning. The spike comes amid rising tensions and military conflict in the Middle East, which are pushing global oil prices higher. Here is what business owners, from restaurants to brewers, are saying about how this is affecting their businesses.

Delivery impact

Rising gas prices are putting serious pressure on Hilltop Boilers Maple Syrup, a small farm in Newfield — especially on its delivery operations transporting maple syrup to restaurants, food distributors and retail stores, while their fuel budget is increasing. It's the latest strain in a growing list of challenges the business has had to absorb in recent years. Owners Michael and Jennifer Bryant said they're also feeling the impact on the supply side, as other companies are passing along higher fuel surcharges. They cited a significant fee on a recent fertilizer order for the summer hay crop. "Together, these rising costs are putting added financial pressure on our farm from both delivery and production angles," the Bryants said in a joint email. "As a small business, it is especially challenging to pass these increased costs on to customers without risking the loss of relationships or reduced sales, forcing us to carefully balance pricing decisions with maintaining customer loyalty."

Downstream effects

Energy prices across the board are all seeing significant increases. “The Iranian conflict has had massive implications on global energy markets from heating oil, natural gas and electricity,” the Maine State Chamber of Commerce said in an email promoting an April 8 webinar on the issue. Tyler VanScoy, owner of Catface Cafe in Biddeford, said, "As for an immediate and direct effect, we run all-electric kitchen equipment, and that's where I would imagine the biggest burden would be." "I am sure there are downstream effects, like shipping costs increasing, thus food costs and dry goods costs increasing," he added.

Cost changes

Bobby Guerette, the marketing director of Gelato Fiasco, says the team has created a recipe database that helps forecast price changes on a range of ingredients. "We stock about 300 different ingredients and supplies in our inventory, some local and some from far away," said Guerette. "It's easy to imagine rising energy costs impacting many of those items. "This tool should help us maintain awareness of cost changes that are truly impactful. Occasionally, we offer flavors that are so expensive to produce that they really don't make much sense; that's okay sometimes, but they can't be all the flavors."

Reader feedback

Has your business been affected by the rising gas prices? The Friday Food Insider wants to hear from you! Contact Alexis Wells at awells@mainebiz.biz