Higher costs could mean higher pizza prices

Cheese-only pizzas at Pizza Hut now cost the same as
one-topping pizzas.

STAFF/WIRE REPORTS

Filomena Riccioni puts the escalating prices of cheese in terms we can all understand.

“It’s going up faster than gasoline,” said Riccioni, one of the owners of Fernando’s Wedgewood Pizza in Austintown.

Both Wedgewood and Belleria Pizzeria raised prices at the start of the year because of the increase in the state’s minimum wage — but now they are considering upping prices again. Officials at both say they may not be able to absorb the rising price of cheese any longer.

“It’s embarrassing to do this to the public,” Riccioni said.

The price of mozzarella cheese has increased from $1.70 a pound to $2.75 a pound in the past two months, she said.

Feeling the strain

Wedgewood, which also has franchised locations in Boardman and Howland, puts one pound of cheese on a 16-inch pizza. Riccioni said it’s tough to make a profit if the cheese costs in a pizza are nearly $3.

Bill Liberato, Belleria president, said company officials met last week to talk about cheese costs. They decided not to raise prices for now but may have to later.

The company’s supplier said the price increases are expected to continue throughout the rest of this year.

“That’s the scary part,” Liberato said.

Belleria has a company-owned store in Hubbard and 17 franchise locations.

Pizza makers around the nation — from family-run pizzerias to national delivery chains — are feeling the pinch from escalating costs for an essential ingredient in a hotly competitive, $30 billion-plus industry.

Raising prices

Industry observers attribute the price surge to strong demand and higher production prices — from the cost of milk to the cost for dairy farmers to feed their herds.

Some big pizza chains, which use mountains of cheese, already have responded.

Both Pizza Hut and Papa John’s International Inc. have raised the price of their cheese-only pizzas to the same amount as one-topping pizzas at company-owned stores.

The higher cheese prices have exacerbated pressure companies already face from higher wages and fuel costs, said Chris Sternberg, spokesman for Louisville-based Papa John’s.

Papa John’s uses about 100 million pounds of cheese each year, and the cheese typically makes up 35 percent to 40 percent of the food cost in making a pizza, he said.

And cheese-only pies cost the company more, requiring an extra cup of cheese, he said.

Pizza Hut and Domino’s

Dallas-based Pizza Hut, part of fast-food giant Yum Brands Inc., which is headquartered in Louisville, goes through 300 million pounds of cheese each year, spokesman Chris Fuller said. The chain’s cheese-only pizza has 50 percent more cheese than a one-topping pie.

At Domino’s Pizza Inc., spokeswoman Lynn Liddle said the Ann Arbor, Mich.-based delivery chain has seen plenty of ups and downs in the cheese market over the years.

For the most part, she said, the chain has “managed to work around these peaks and valleys.” But if the price of cheese and other items continues to rise, Domino’s will have to boost its prices, she said.

A market analyst with Downes-O’Neill, a dairy brokerage firm in Chicago, said continued strong demand, along with a typical summer decline in milk production, could keep cheese prices high for a while.