For the first time in 10 years, Portland foodmaker Brazi Bites is increasing prices in some of its sales channels.
The move is a result of rising costs of ingredients and supply chain problems, said co-founder and Chief Marketing Officer Junea Rocha.
The company makes gluten-free frozen foods with its flagship product a frozen Brazilian Cheese Bread based on a recipe developed by Rocha and inspired by a favored snack from her native Brazil. The company has been fast growing for several years and in 2018 sold a majority stake to private equity.
The small business navigated the onset of the Covid-19 pandemic but this year a new challenge emerged as prices for ingredients jumped at the beginning of the year. A second wave of increases hit about 60 days ago, said Rocha. Products are sold in 16,000 stores nationwide.
Where the costs are rising
Here’s what the company is contending with for year-over-year price increases:
- Eggs: +50%
- Cheese: +37%
- Milk: +30%
- Tapioca flour: +13%
- Freight: +10%
“It’s been very hard to navigate,” said Rocha. “In the first wave of increases we were able to navigate through efficiency gains. We had recently invested in equipment, in efficiency on the production line and packaging. We thought we were going to be able to gain, that we would gain and be a healthier business (based on those investments).”
Brazi Bites production is outsourced to three different co-packers, and the company helped those businesses invest in new equipment for efficiency gains, Rocha said. She added that labor costs have also gone up significantly and the labor shortage has also hit the company. There are times, she said, when there aren’t enough people to run production at the co-packers.
With the equipment upgrades Brazi Bites was able to maintain, but once the second wave of price increases hit the company was forced to pass some of that to consumers.
“Consumers need to know every food producer is trying as best they can while passing as little as possible (on) to stay in business,” she said, adding that the company has been thoughtful on where and how to increase prices.
How inflation affects consumers
Consumers can expect to see the price changes this month.
“Retailers require 60 to 90 days to execute (pricing). We received the massive cost increases overnight, then (it’s) 90 days for the price increases to go on shelves.”
“We trust the brand has the value that consumers can handle that,” she said.
Brazi Bites has 20 employees and expects to do $25 million in revenue if it hits its plans for the year.
