Ice cream prices skyrocketing
By Shayna Coleon
Advertiser Staff Writer
Mary Pratt, co-owner of Lappert's Ice Cream and Coffee, doesn't want customers to faint when they find out how much a single-scoop ice cream cone costs at her store in Waikiki.
Kyle Sackowski • The Honolulu Advertiser
But since July 1, it's cost almost $3.
San Francisco residents Shawn, left, and Afsaneh Massihpour help their daughters, 4-year-old Diba, left, and and Dorsa, 6, pick out waffle cones at Hilton Hawaiian Village's Lappert's Ice Cream Store.
Pratt and her husband, Terrill Pratt, had to raise the price by 10 cents in their five stores when the price of milk fat, the principal ingredient in ice cream, increased, Pratt said.
"Milk fat is the thing that makes the ice cream taste really good," Pratt said. "We use up to 16 percent of milk fat, and that makes the ice cream richer and creamier. It's what makes it taste great, and what makes it much more expensive."
Since January, the cost of milk fat has soared 71 percent to $2.22 a pound at the end of June. The industry blames a new government pricing system, while Agriculture Department officials point to a seasonal slowdown in milk production.
Whatever the reason, retail ice cream prices nationwide are up about 4 percent from last year, manufacturers say. And that, in turn, has triggered a 3 percent drop in consumption.
Pratt said she and her husband hated to raise their ice cream prices, but the cost of ingredients skyrocketed in March.
"We're already pushing the limits," Pratt said.
The Pratts are not alone. Other ice cream makers are feeling the pinch, too.
"The cost of ingredients usually never fall, they always go up," said Keith Robbins, owner of Bubbies Homemade Ice Cream and Desserts. "So we always have to re-evaluate and keep adjusting our prices to make them better."
So far, Robbins has not raised his ice cream prices this year. But, he said, when Bubbies raised its ice cream prices last year, business suffered. A new pricing system, adopted in a 1996 bill, went into effect in January 2000. It was designed to bring uniformity to how much dairy farmers earn. The government tied the cost of milk fat to the price of butter, which has soared from $1 per pound in March 2000 to $1.90 per pound in May 2001 on increased demand.
Cathy Nobriga, a manager of Roselani Ice Cream at Maui Soda and Ice Works, said that although ice cream ingredients like butter and milk fat are high-priced, local ice cream makers have no choice but to deal with the high costs.
"We use unsalted sweet butter from California," Nobriga said. "I can remember when a 25 kilogram box of that stuff was 86 cents. Now, it's around for $1.43, and I even saw it for $2.81. But that's what we use, unsalted sweet butter, it's our standard. We can't substitute it or that will change our flavor."
Since Roselani Ice Cream is part of Maui Soda and Ice Works, a Coca-Cola franchise, Nobriga said the company is able to share costs with its beverage division, which keeps the ice cream prices steady around $5 for half a gallon.
Other ice cream makers, however, are not so lucky.
"I know I've talked to a half dozen companies who've told me they don't want to but that they're going to have to raise the prices of their ice cream creations because of the increased cost of milk fat," said Donald Buckley, executive director of the National Ice Cream and Yogurt Retailers Association, which represents independent store operators. U.S. Department of Agriculture officials say there are other factors at work besides the price regulation changes.
"What you're seeing is dairy supplies are down, compared to last year, and demand is up," said Agriculture Department spokesman Jerry Redding.
"Across the board, dairy prices are very high. It's strictly supply and demand. Prices tend to go up in summer, because there's more demand and because cows don't give as much milk in summer because of the heat."
Despite the pressure, some retailers have absorbed the wholesale price increases because they fear losing customers if they pass them on. But even if price hikes are passed on, some local ice cream makers say that will not stop people from buying.
"People still like to indulge," said Dave Leong, owner of Dave's Hawaiian Ice Cream Factory in Pearl City. Leong so far has been able to keep his ice cream prices steady. "They want something creamy and good. I mean, they want to put something good in their mouths when it's hot, right?"
An Associated Press report was included in this story.
