[Music] From the Toronto Star, I'm Sabayatizaz, and this matters. [Music] If you've been feeling sticker-shock at the checkout counter lately, you're not alone. Canada is bracing for what experts are calling a perfect storm, as inflation hits the food aisles and prices explode. [Music] Is a short trip to the grocery store becoming a high-stress situation? Do you find yourself buying a lot less and paying a lot more? Have you started avoiding the meat aisles for fear of the prices and seriously beginning to contemplate a vegan lifestyle? Okay, even if that last one's just me, Canadians are definitely feeling the pinch of skyrocketing food prices due to the terrible impacts of a pandemic plagued two years. And it's not over. We'll all be paying a lot more for food next year, since Canada's latest food price report. We can all expect our groceries to put a big dent in our budget and our yearly income, and yes, the pandemic is too blame, like I said, but there's more. Let's just say it's complicated. So I've invited our business reporter, Rosa Sabayatizaz, on the podcast, so she can tell us why 2022 is looking grim when it comes to food prices, what we should expect to pay more for next year, and she'll also share some tips for grocery shopping on a budget. Hi, Rosa, good to have you again. Thanks for having me. So how much more are we expected to pay when we hit the grocery store? So, yeah, the latest food price report out of Delha's University actually makes it pretty easy for you to figure that out. They have sort of estimations based on, you know, different family types, and that kind of thing, but probably speaking, if we're going to go with a family of four a man, a woman, and two kids, you could be seeing almost $1,000 increase in your annual food budget, up to almost $15,000. I think it's the biggest jump that this report is ever predicted, frankly. Yeah, $1,000 is a lot, and it all adds up as well. So what are the factors that are driving prices at these rates? Was it just the pandemic, or has this been an otherwise bad patch, basically? Yeah, so the pandemic for sure has caused, you know, a lot of supply chain issues. That's been issues throughout the pandemic as well. There's some difficulty hiring in the food sector, not just in restaurants, which we've talked about, but also sort of all along the food chain. Some people are blaming that on the pandemic. Others are saying it's people sort of realizing that they want, perhaps a better job or something. There's some contention there, but regardless, there's definitely some difficulty hiring in the sector. And then of course, climate change. So you only have to look to BC to see what a bad year it's been. And it's not just for Colombia that has had these difficulties. So climate change is making it increasingly difficult for a number of products. And because of that and because of some other general inflation, certain products are going up more than others. So that rise in inflation, in food inflation, which is supposed to be between, I think, five and seven percent, is going to be higher for certain things than others. And we also keep hearing about the global supply chain issue. Is that also one of the main reasons? Can you explain it a little bit like how that's contributing to this? Yeah, so I'm not a big supply chain person, but there's a sort of a variety of issues. Again, the pandemic has made it sort of harder to ship things. A shortage of workers, for example, there's a shortage of truck drivers, right? And that's how a lot of this food is getting around. There's also delays. So my colleague Jacob Lawrence wrote about how delays were causing a lot of problems for food wholesalers. And they're actually seeing a lot of food waste because of it because some food was going bad. Of course, any sort of climate-related disasters may be difficult to bring things around. So it's really just a whole storm of different things all happening at once, or things that have been happening over a few years that are all culminating. And is there a breakdown of this you talked about and a role increase for a family of four percent, let's say, a $1,000? Are there any variant factors here? Can you draw a bit of a picture of what this would look like for Canadians? Yeah, so it really depends on what kinds of products you're buying. So for example, dairy prices are expected to increase quite a lot. So if you're a family that doesn't buy a lot of dairy, maybe you won't be affected as much, right? That's one example. And there's other products that kind of oil has gone up a lot. Restaurant prices as well. So restaurant menu prices are expected to go up again, sort of because of food prices, but also because of the hiring difficulties and some other things. So it really depends how much you eat out. It depends what you buy at the grocery store. You know, it depends how old your kids are. It depends if you're pregnant. It depends what kind of household you have. There's all these different factors that go into it. And there's certainly things you can do to sort of lessen the impact on your household. So Rosa, you spoke about dairy as being one of those items that are affected. What other products are being affected more than others? I think you had a bit of a breakdown of the food forecasts that would impact us. The most can you tell us about that? Yeah, so the total increase in food prices, it's predicted by the report for 2022 is five to seven percent, but there is a breakdown for certain categories. So dairy and then restaurant menu prices are both predicted to go up between six and eight percent. That's what's driving the higher percentage, but also bakery is expected to go up five to seven percent. There have been some difficulties, you know, growing grain and that kind of thing. So that's going up fruit, three to five percent, vegetables, five to seven percent. Again, like a mix of supply chain stuff and climate disasters, but luckily meat and seafood are not expected to go up by much more than two percent. Now meat actually went up by almost 10 percent in 2021. So it's not like it's going to be cheap or anything, but at least we can sort of rest assured knowing it's not going to go up anymore, knock on wood. Right, and it's interesting, Rosa, that you mentioned how some of these prices have been going up for a while now and you talk about how food inflation has been faster than regular inflation, not just because of the pandemic, but it's been happening for decades now. That's very interesting. Can you tell me a little bit about that? This is not a new thing. No, it's not a new thing. I mean, that is inflation. Price is going up, right? But we do know, and I wrote about this in this upper piece, of course, that the prices of things like food and housing have gone up significantly more than regular inflation and certainly more than people's incomes have gone up. So that's the main problem here. You know, if the cost of buying groceries goes up, that's fine. As long as the amount of money I make for a year goes up as well, right? But that's obviously not happening. I mean, even if you just look at minimum wage, how are people supposed to afford a thousand dollar increase in their family's grocery budget if minimum wage is not going up at the same pace? So that's really the major issue is that some things are going up more than others, the input, the output, they don't match. And I think one of the experts that you spoke to for your piece talked about it and described it as a perfect storm, right? Yeah, so Michael Raiden, CEO of Food Health and Consumer Products of Canada, we're talking mostly about, you know, manufacturing, you know, you need to say that the cost of manufacturing food products has been steadily rising. So labor costs going up, they are having to difficult hiring, transportation costs have gone up as well because gas has gone up, right? And then of course the cost of ingredients and there have been some spikes. Canola, for example, that's die-rocketed in price in 2021. So the price of oil went up and he was saying that, you know, when all of the input costs go up for the manufacturer, you know, they can only absorb so much, right? And eventually prices do have to go up. So it all gets passed down the line when they can't absorb it anymore. We'll be right back. And how are growthsers, especially small businesses or independent growthsers, how are they dealing with this? Because it's automatically assumed that the difference in these costs will pass directly to customers and we're going to end up paying for this, but that's not necessarily accurate, as you mentioned. No, and I think that's a conception people have, first of all, that, you know, something gets more expensive on the wholesale side and then the groceries are going to take that and sort of apply it percentage by percentage to the customer. So they think, oh, if the price of canola goes up 20%, then the price of my bottle of canola is going to go up 20%. That's not necessarily the case. There are others who would say, well, that's how business works, and it is, but, you know, growthsers don't want people to have sticker shock. They don't want people to go to the grocery store and suddenly see the prices of things go up. So they look for ways to absorb the costs a little bit. They think, okay, right now we have, you know, such and such margin on canola oil. Can we afford to have a smaller margin? You know what I mean? Essentially, can we afford to make less money on canola oil? And they'll sort of adjust certain prices over time, but it's not like a percentage for percentage thing because, again, they don't want people to have sticker shocks. So it's not quite as simple as that. So this is going to be challenging for groceries as well, particularly the small businesses, right? As it take a lot of this hit on their own sales too. Particularly small ones for sure, because also small stores don't have the purchasing power that larger ones do. So they may be already paying higher prices. I spoke to Fiesta Farms, which is an independent grocery in Toronto. And, you know, they are going to try to look at their margins and take things slowly, but at the end of the day, you know, it's a business and they have to run it like a business, right? Yeah, it's a tough situation to be in. So we've talked about a number of factors. Is there anything that I'm missing? Any factors that might make things worse in future when it comes to food prices and inflation? One factor I think that is really worth talking about is that labor force questions. I'm friend about this a lot over the pandemic. Some call it a labor shortage. Other call it a shortage of good jobs, but generally speaking, you know, overall employment Canada has reached pre-pandemic levels, which is a good thing. And yet in the food industry, restaurant, manufacturing, etc, they are still short workers. And so I think we're going to continue to see that not only affect prices, but also it could affect what the jobs in those industries actually look like. You know, as they try to attract workers. And again, it's obviously a positive thing if people start making more money or having more benefits, but that also costs the business more, and that could also impact food prices. So we'd be really interesting to see where that goes in the new year and also climate change and natural disasters like
That's only going to have more of an impact. You know, when the story came out, obviously, I got some emails from people saying that that was all propaganda, but it's not, you know, my home province has been flooding and on fire, intermittently for like three years now, and that's just one province. So I think that that's absolutely something that's going to continue to have an impact. Yeah, I think the visible impact of that would be quite difficult to deny at this point. So let's talk about implications. What are we looking at if the rates continue to hike in this way, what would be the consequences of this? Well, as with anything, you know, the people who are going to feel this the most are people who are low income, people who are making minimum wage. Statistically speaking, you know, a lot of perhaps newer immigrants, a lot of racialized communities, single-parent households. I mean, anyone who is already struggling in any way is going to have trouble with this. Because again, $1,000 is a lot of money, you know? And so I think we're probably going to see more reliance on food banks quite frankly. That's something that you're going to see more and more demand for. And then people are going to look for ways to save money at the grocery store as well. So we could see more interest in the brands like PC and compliments, the brands that are slightly cheaper and that are made by the grocery store. Earlier in the year, I actually, you know, wrote about this another report by Dalhazi saying that people might be more interested in brands like PC and compliments. So the brands that are actually made by the grocery stores that are slightly cheaper. So we'll see more interest in that, maybe more interest in, you know, the buy tonight, enjoy tonight, meet products. We could even see more people interested in sort of buying less meat, less dairy, you know, going more plant-based. But the plant-based is always cheaper, but it can be. So they were going to see more and more of that. But yeah, like this is going to cause a lot of food insecurity. It's going to exacerbate food insecurity that already exists. And we should expect to see the effects of that in our most vulnerable populations. Yeah. Unfortunately, the same population suffer, impacted disproportionately by the pandemic. So that story repeats itself again. So what can we do about this if anything, any tips for someone who might be trying to shop on a budget you did talk about those special products or, you know, that special brands that people can look to to save? Yeah. So my colleague, Jacob Lawrence, read about this recently. There's a bunch of different things you can do. As I mentioned, you can turn to alternative products. Now, some of the more sort of processed plant-based products can actually be just as extensive. But things like lentils and chickpeas, which have protein and other things in them that you're often looking to get when you're looking for a meat replacement, those are quite cheap. So you can try looking at things like that. You know, one of the experts in his piece said that you can actually try buying in bulk. So if you can afford to do that, again, that's not something that everyone can do. Not everyone has a Costco membership, not everyone has a car. But if you can, you know, you give a friend of the Costco membership, go with them, actually do that. You like to go to Costco, buy a bunch of fish meat and freeze it. So that's a really good way of sort of saving money. Big wealth stores like Walmart, Costco, you know, they often have cheaper options. Obviously, I always like to support local, but at the end of the day, you know, going to a no frills or a fresh co that's going to help you save some money as well. And there isn't a growing interest in all those alternative proteins that cost less. It's chickpeas, lentils, and that kind of thing. There's also even some startups that are trying to address this. So there's one called Remarkable Reject. It's a GTA-based business that offers discounted vegetables. Like grocery stores were what accept, you know, there's a lot of food at grocery stores that go to waste because of what it looks like or something like that. So that's a way to sort of help that cause and also save some money. And of course budgeting, meal planning, not buying things you don't need. And have a good meal before you go to the grocery store or you'll end up like me coming home with a bunch of things that were not on your list. So yeah, that, and of course the usual coupons, fine grocery store brands looking for reduced products. It takes a bit of work. It takes a bit of planning, but it's not impossible. Right, like you, I think I felt a bit attacked. I'm like, I don't do any planning. I think that would definitely go a long way. And from what you're saying, you might see some changes in like how we view food in our eating trends as well. Yeah, I think that also, you know, this is something that's all about Charlotte Boat, you know, the lead author of the report said, food is perhaps becoming more culturally important to some people. You know, we've been doing a lot more cooking at home, so that's part of it. But also, when you spend more money on something, you start thinking about where you're putting your money. And then you start thinking about those who can afford to make these decisions might be thinking more about buying local. You know, they might actually be spending more money by choice because they've decided, you know, what food is such a big part of my budget? I'm going to really put my money where I believe. So that's something else that we could see sort of in the group of people who can afford to make those decisions. But for others, you know, I think it's going to be a lot of budgeting, a lot of meal planning and sort of looking for alternatives. That makes sense. All right. Thank you so much, Rosa. As usual, you've been very insightful and informative for us. Talking to the store's business reporter, Rosa Sabah. That's it for today. Thanks so much for listening. I'm your host, Sabah Tazaz. The Dismatters team is Brian Bradley, JP Foso, Matt Hearn, Morgan Bucknick, Raju Motto, and Sean Pattenden. Our music is by so-called Mike D'Angeles and Sean Pattenden. We want to hear what's joys matter to you. Please send us comments, questions, or ideas to
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