Pepperoni prices are skyrocketing as meat packing plants struggle to keep up with Americans' insatiable appetite for pizza
- Independent restaurant owners told Bloomberg that they're paying up to 50% more for their pepperoni than they were paying before the pandemic.
- The rising cost of pepperoni is largely due to two factors: lower supply from meat processors and higher demand from customers.
- While most meat production facilities are operating at vastly reduced capacity, Americans are eating more pizza than ever.
- The costs of pepperoni will likely not be passed on to the consumer, and big chains are mostly unaffected.
Supply and demand issues have conspired to create the perfect storm of pandemic pepperoni problems.
Pepperoni prices are up by as much as 50%, Bloomberg first reported. The issue for pizzerias is a two-pronged one: pork processors are making less pepperoni, and people are eating much more of it.
The rate of meat production remains significantly lower compared to pre-pandemic levels. Cramped working conditions led some meat processing plants to become hotspots for coronavirus outbreaks. Roughly 32,630 cases of COVID-19 have been tied to meat processing plants, and at least 123 meat processing workers have died from the coronavirus.
Due to the reduced labor capacity at plants, meat processors are producing fewer labor-intensive products like pepperoni, instead focusing on easy-to-produce large cuts of meat. As a result, many processors are charging more for pepperoni.
Coincidentally, Americans are eating more pizza than ever. While most restaurant chains have reported a decrease in sales over the pandemic, pizza chains are flourishing. Domino's announced on Monday that it would hire 20,000 new employees to meet rising demand for its pizza.
Independent pizza restaurant owners that spoke to Bloomberg said they do not intend to raise prices to recuperate the rising cost of pepperoni. Instead, owners told Bloomberg that they decided to eat the cost.
The rise in pepperoni prices represents yet another hurdle independent restaurants face when competing against larger chains during the pandemic.
Domino's, Papa John's, Pizza Hut, and Little Caesars have not an increased their pepperoni prices either, Bloomberg reported. However, large chains often have pre-negotiated buying contracts with suppliers.