- One of the nation's top catering and hospitality companies is adjusting its menus and ingredients to bring down food costs.
- Among the areas seeing the harshest pricing pressure: ballpark hot dogs and plastic packaging.
- Sodexo Live CEO Belinda Oakley said the company is expanding the number of value menu items it offers.
Those peanuts and Cracker Jacks may soon cost you more at the ballpark, thanks in part to food inflation, the CEO of a top hospitality company told CNBC.
"It doesn't matter what industry you're in, everybody is noticing prices going up, and scarcity being an issue in certain product lines," said Belinda Oakley, Sodexo Live CEO. "Of course, we were no exception to that."
Sodexo Live operates food, beverage and hospitality services at Seattle's T-Mobile Park as well as 200-plus sports, cultural and entertainment properties throughout the U.S. Oakley said the company's scale, and the fact that it has about $20 billion in purchasing power, is helping to mitigate some of the inflationary pressure.
Still, higher costs have forced Sodexo Live to get creative with its menus and food selection.
Sodexo Live is changing some ingredients, mixing up its suppliers, and sourcing more items locally to help reduce costs and avoid passing along 100% of the price increases to the consumer, Oakley said.
"It will still be a phenomenal experience for the fan, but might be more cost-engineered to make sure that we're not outpricing them from the market," she said.
At T-Mobile Park, the company is expanding the number of value menu items it offers, priced between $2 and $4, to a dozen items, up from seven last year.
One big item that could see sticker shock: ballpark franks, which also happen to be a top-selling concessionary item for Sodexo Live. Oakley cited higher supply chain costs, including packaging and labor, for driving up meat prices.
Location matters, though, according to Oakley, and prices vary depending on your geography. The distance between a ballpark and a vendor can make a big difference, as can market pricing. For example, if you look at pricing last year for the average price of a hot dog — it was most expensive on the West Coast, with the San Francisco Giants charging $7.50.
"You're going to see a higher cost impact in California than you're gonna see in Indiana," Oakley said.
Another area that is experiencing harsh pricing pressure, Oakley said, is plastics and disposables: materials in preparing food that's transportable.
"The Russia-Ukraine war has had a huge impact," she said. For example, the price of resin, a key ingredient in making disposables, has been hit particularly hard.
But when it comes to pricing, the company is keeping the long game in mind.
"We need consumers to continue to want to have these experiences outside of their day to day and to use their discretionary spend to actually go and enjoy hospitality," she said.