Pizza & Inflation - Part 2

Pizza & Inflation - Part 2

Last week I had the honor of leading a “Pizza Crawl” for Gotham Networking, an impressive organization of experienced New York-based like-minded business owners, who do great things for the community in addition to referring business to each other.

Earlier this month, I embarked on my annual summer California trek, which brought me to Redding, Northern California.?My good friend, Shannon Hicks, invited me to his cigar club called “The Grindstone.” He said it was pizza day, “You will Love it!”?It turns out that pizza day consisted of his fellow Grindstone member, Jay Webster, slinging personal pies made to order out of a modified keg that was cut out in the middle.?Surprisingly, they were good!

Jay and his wife Michelle were serving the pies in 108-degree weather in the club’s backyard to thank the Grindstone Brotherhood for their support, while Michelle was fighting and beating cancer.??I gave them my business card and said if they were ever in NYC, I would be happy to take them out for Great Pizza.?Usually, when this occurs, you rarely hear from them again.

Not this time!?Two weeks later, I received a text from Jay saying his family had landed at Newark airport and were staying in Staten Island, where they would be participating in a weeklong 500-mile cancer charity bike ride upstate.?My response was, “Wow, I am doing my pizza crawl walk-through tomorrow, why don’t you come into Manhattan, get your carbohydrate load and we will ‘crawl’ together?”

So we did!?Our first stop was at Famous Ben’s Pizza in Soho, followed by a walk to Prince Street Pizza, then onto Lombardi’s for a full sit-down dinner.

I was immediately taken aback by the $6 price of Ben’s “Sfincione” slice, called “The Palermo.”??Very few people (including Italians) are aware of what “Sfincione” is or what it represents.?The name is derived from “Sfincia,” which is loosely translated as “thick sponge.”?It originated in Palermo (The Capital of Sicily) on its northwestern side in the early 17th?century.

Sfincione was initially created as a special bread for Christmas Eve, and it has the characteristics of Palermo Street Food, meaning it is soft, tasty, and inexpensive to prepare.?

I call “Sfincione” the paella of pizza, as it was a common meal for the poor back in the day.?Now, I have seen paella dishes for $25+ at restaurants and $6 for a Sicilian square slice with no cheese!??Because the poor couldn’t afford cheeses, “Sfincione” is made with dough, sauce, onions, and breadcrumbs instead of cheese.

When I led the same exact pizza crawl in 2019, the charge was $65 per person.?After my walk-through crawl with Jay Webster and family, the cost has increased to $95 per person!?

Since the early 1960s, the price of a regular New York slice has mirrored the price of a subway token.?This was called “The Pizza Principle” or the “Pizza-Subway Connection.”?Now, since inflation has been hovering around 8.5%, there is an ever-expanding gap between these two costs.?

This has me thinking about the root causes of prices running rampant.?Basic economic supply and demand are what cause inflation.??

Some of the reasons for the pizza inflation are:

  1. Cheese Prices:??As per the Bureau of Labor Statistics, cheese prices have risen over 20% while grocery prices have risen by 13.1% during the last 12 months.?Dairy plants were hit hard by the Omicron variant, leading to decreased production.?Milk prices have also risen.
  2. Trucking and Shipping Costs:?Shipping container costs have multiplied.?About 90% of the goods we consume in New York City are trucked in. The price of diesel gas has skyrocketed, and demand has risen leaving industries struggling to keep up.?There is also a shortage of drivers as they are leaving for higher-paying jobs, causing trucking companies to raise wages which raises delivery costs.?California just lost approximately 70,000 truckers during the past 18 months.
  3. Tomato Shortages:??California produces 90% of America’s tomatoes and 25% of the world’s tomatoes.?California is in the middle of its worst drought in over 100 years.?Reservoirs at Lake Mead (I have seen this in person) are at their lowest levels since their construction in the 1930s.?Due to the lack of water, California is on pace to produce 40% fewer tomatoes this year.

Having spoken to several pizzeria owners, they are concerned about the rising prices of olive oil, flour, and cardboard boxes in addition to the increasing tomato shortage.?The 99-cent slice places are raising their prices to $1.50 or more.?Pizzeria owners deserve our empathy instead of complaints about rising prices.?Now, let’s eat!

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