What does the price of cardboard have to do with your Shabbat dessert? Fluctuations in commodities prices are a natural part of the production cycle. But today, everything is rising in price with no downturn in sight. That babka you want for Shabbat includes cocoa, flour, eggs and shortening. The ingredients are becoming more expensive as they get caught in the global gridlock of container ships waiting to leave one port and get unpacked at another. When each of those products continues to go up in price—including the cardboard and plastic packaging—the result is an unavoidable price rise when the babka gets to the shelves.
Adam Steinberg, co-owner with brother Josh of Zadies Bake Shop in Fair Lawn took the unusual step of sending a letter to customers about the continuous rise in his costs and why he has to increase prices at the bakery. In the last eight to nine months, he has had to raise prices several times. In the past, price increases at most happened annually.
“We have never experienced this before, ever,” said Steinberg. “That’s why we wanted to share our story. What’s happening now is hyper-inflation. Goods and products become unavailable or scarce. That causes a chain of events. One item goes up and then everything we touch goes up. It’s a scary time for business.”
Steinberg said cardboard and plastic packaging have risen 30% – 60%. Raw materials such as oil, flour, eggs and shortening have risen between 50% – 100%. On top of that, labor costs have risen 30%.
It’s not always apparent what the raw ingredients are in a product. Oil is in the cardboard boxes in which products are shipped and in the cake boxes Zadies uses. There have been five or six price increases in oil in as many months.
Steinberg gets ingredients through suppliers. Since he can’t buy products like cocoa directly from growers overseas, he has to contend with price increases all along the supply route. Even products grown in the United States are caught in the transportation gridlock—there’s a shortage of truck drivers.
Small “mom and pop” shops like Zadies are at a disadvantage without room to stockpile ingredients. “Some items go up seasonally; we contract flour in advance for yoshon season. If I see the price of flour going up, I want to buy extra but I can’t because I don’t have the capacity,” said Steinberg. “We order mostly week to week. Now, it’s almost to the point where we have to worry, what will eggs, sugar, flour, etc. cost next week?” The salesmen from whom Steinberg purchases have been warning that they don’t know what prices will be next month. They are forecasting a 10% -15% percent rise in prices next quarter.
With Thanksgiving coming soon, Steinberg is worried about the shortage of aluminum. The connection? Pie tins. What’s Thanksgiving without apple or pumpkin pie? “We have a good sales rep who saw that they were running short and sent us a pretty good shipment to get through the holidays. But what’s going to happen five months from now? I use aluminum tins for our pull-apart challahs, among other items. Will I have to change sizes or even worse, not be able to make them at all?”
One thing that won’t change is Zadies’ standards. “We will never stray from quality,” said Steinberg. “We built our name on quality. When you start skimping and use cheap chocolate or put less in, it will catch up with you.”
Labor shortages are starting to ease up as government-funded lockdowns have ended, and vaccinations have made workplaces safer. At Zadies, lines are getting shorter as more counter help becomes available. Baking talent isn’t a problem—Josh Steinberg does all the mixing and baking for everything but bread.
The Steinberg brothers have the utmost gratitude to their customers and are grateful they have stayed loyal. “We have a great business product and customers, and we’re extremely grateful for that,” said Steinberg. “We want people to stick with us and ride this out.”
By Bracha Schwartz
