Eggs & Energy
Two of many things messing with your margins
In the last year, egg prices have more than doubled. And remember the Great Lime Shortage of 2014? Both were the result of a variety of market factors. Hospitality pros know it’s part of the game and, minus menu changes, mostly out of their control.
Know what isn’t out of your control? Energy costs.
Just like the price of eggs, the energy market fluctuates and, lately, has been nothing short of volatile. And right now, there’s a big opportunity to take advantage of it.
Our Shared Roller Coaster Ride
This graph below shows everything. We reached almost $10/MMBtu — twice. The first five months of the year saw prices more than double. The extended closure of a liquified natural gas processing plant was unplanned and led prices to fall in June, but they rose again throughout the summer.
A fall sell-off was unexpected, but increasing production was viewed as bearish for prices. Finally, the lack of winter weather was the last domino to fall, and energy prices fell alongside it.
Looking Into the Future
You’ll notice we’re currently at an extreme low for natural gas prices. But what does this mean for the market going forward? Will the volatility of 2022 continue or was it a fluke?
None of us truly knows the answer to that question, but many in the industry believe that market volatility is here to stay. Ever-rising energy demand, increasing liquified natural gas exports, and electrification of vehicles are among the reasons why.
The Good News
Unlike eggs, you can lock in the price of your energy. And that’s a big deal because it’s 3-5% of operating costs for the average restaurant. The current low prices are a big opportunity. Adding certainty to your operating budget by locking your rate is not only doable but highly recommended, based on market trends.
IGS Energy offers plans of multiple lengths and proactively monitors and models the market to further optimize energy strategies for our hospitality partners.
A Free Energy Audit + A Simple Conversation
Start a conversation with our trusted energy expert, Andrea Wilkins, at Andrea.Wilkins@igs.com or 216.253.3207, and take advantage of the free energy audit you get as an ORA member to see how this volatility has impacted your business.