Canadian Pizza Magazine

From the Editor’s Desk: January/February 2007

By Cam Wood   

Features Business and Operations Finance

Is there a need?

New Year’s always seems to bring a sense of needing: a need to change, a need to work harder, a need to do better.

Is there a need?

New Year’s always seems to bring a sense of needing: a need to change, a need to work harder, a need to do better.

Perhaps that’s why the Canadian Dairy Commission delivered yet another increase in mid-December – just in time to reinforce the philosophy that for every cheery festive soul there needs to be a Scrooge.


Perhaps the CDC needs to hike support prices. As to why, apparently those of us in the foodservice industry don’t need to know.

Perhaps the Canadian dairy industry needs to be Number One in the global economy. We’re not sure it needs to be because of the highest prices as opposed to efficiency.

But the one thing we are very sure of is that the foodservice industry and consumers needed some relief in 2007.

Costs have skyrocketed all around us for the past three years. Driven by unstable energy prices, goods and services have become more expensive, eroding the bottom line of many businesses. In addition, this economic shift has all but cleared out what was left of most Canadians’ disposable income.

The increase, while bandied about as a small 1.06 per cent, will arrive with a deeper impact once the provincial boards set their own pricing, and pass along those to cheese suppliers. However big or small that price shift will be, the end result remains higher food costs and smaller profit margins for independent pizzaiolos.

And, despite the costs of other goods and services increasing, this price hike just doesn’t make sense.

Canadians have shown for the past several years that they don’t need dairy products as much as the bureaucrats at the CDC think. Consumption has decreased 18 per cent since 1980, yet the cost of industrial milk – the milk used to make common dairy goods like butter and cheese – has risen 53 per cent, or twice the rate of inflation in Canada, according to the Canadian Restaurant and Foodservice Association.

Instead of reformation of their system, the CDC finds itself needing to make these annual increases in order to maintain consistent profit margins on declining quantities being consumed.

But the CDC isn’t about to change their ways. Despite aggressive lobbying by associations like the CRFA, they don’t see the need. Their mandate isn’t to look after the foodservice industry – nor do we suspect it even has anything to do with the dairy farmers. The CDC is there to ensure the dairy-processing sector thrives, even in the face of cultural, political and demographic changes.

The only solution left to the operator is balancing a food cost shift with consumer education. If Canadian pizzaiolos want to make a resolution this year it needs to be that of addressing their prices. The cost of a large pizza in most centres has remained almost unchanged since the 1980s. Other industries – including non-pizza restaurants – have recognized the need to change, and now so must we.

If our pizzaiolos don’t see this need, then there will be more than a few needing an updated résumé.•

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