Pizza Prices Continue to Rise Due to Costly Raw Ingredients

Published May 8, 2023
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Pizza is quickly becoming a luxury food item as the price of this Italian dish continues to soar in many countries owing to the rising costs of ingredients such as tomato paste, flour, olive oil, and cheese. According to the European Commission, in March, the monthly inflation rate of pizza in the EU was 17.7%, compared to 3.8% a year ago. Many consumers have become frustrated with the elevated fresh pizza prices, leading them to prefer lower-priced store-bought frozen pizzas. Consequently, US frozen pizza sales are expected to rise to USD 11.3 billion in 2030, at a CAGR of 6.9%. Tridge expects pizza prices to remain elevated in the coming month as the fundamentals continue to support a bullish trend for pizza ingredients.


Pizza is quickly becoming a luxury food item as the price of this Italian dish continues to soar in many countries owing to the rising costs of ingredients such as tomato paste, flour, olive oil, and cheese. According to the European Commission, in March, the monthly inflation rate of pizza in the EU was 17.7%, compared to 3.8% a year ago. In the US, Dominos, the largest pizza chain in the world, raised pizza prices by about 4.6% in Q1 2023, including the cost of its Mix and Match Deal to USD 7 from USD 6, up 16.7%. Additionally, many leading stores that offered the USD 1 pizza slices, such as Halali and 2 Bros Pizza, raised their prices to USD 1.5 in March.


Source: Tridge, European Commission

Wheat flour, the most important pizza ingredient, has undergone a bullish trend since the invasion of Ukraine by Russia in 2022, a move that hampered wheat shipments from two of the leading global suppliers. According to the Federal Reserve Bank of St. Louis (FRED), in March, the global average price of wheat was USD 309.4/mt, 34.6% higher than USD 229.9/mt two years ago, before the escalation of the Black Sea conflict. As a result, in March, the average price of white flour in the US remained flat at USD 0.55/lb, similar to February, and a 21.9% YoY increase.

Tomato paste, along with olive oil, is commonly used to make pizza sauce. However, global tomato paste production has suffered due to adverse weather conditions in leading tomato-producing countries, from continuous floods in the US to consecutive years of drought in the EU. As a result, the average tomato paste (HS code: 20029031) export price in Italy went up to USD 2,047/mt in March, a 3.3% MoM increase and over 74% more than the previous year. In the US, tomato paste traded at USD 2,036/mt in April, similar to March, and 22% higher than Apr-22.

Another vital pizza ingredient is cheese, especially Mozzarella cheese, which has gained popularity due to its sticky texture and appealing taste. Based on Tridge price data, the price of mozzarella cheese in Milan, Italy, has risen significantly in 2023, reaching USD 6.6/kg on the 27th of March, a 2% MoM increase and 24.9% more than the previous year. In Paris, France, the case was similar, with Mozzarella cheese trading up 1.2% WoW to USD 14.8/kg on the 27th of Mar-23 and 49.8% more than USD 9.86/kg on the 21st of Mar-22.


Source: Tridge

Olive oil adds undeniable flavour to pizza dishes globally, making it a key ingredient. However, the lack of adequate rainfall has caused olive oil trees in Spain to suffer massively this season. Spain is the largest olive oil producer in the world, and these production woes have caused global olive oil prices to remain elevated. According to FRED, global olive oil prices rose 1.6% MoM to USD 5,989.7/mt in March, 36.2% more than USD 4,398.6/mt a year earlier, and the highest price in over 26 years. According to Tridge's wholesale price data, in the Seville market, Spain, olive oil traded at USD 6.1/kg on the 10th of April, up 3.9% from USD 5.9/kg on the 6th of March, and the highest price in 2023.

Many consumers have become frustrated with the elevated fresh pizza prices, leading them to prefer lower-priced store-bought frozen pizzas. As a result, in the US, frozen pizza sales rose by 11% YoY as retailers continue to increase their frozen pizza adverts. According to Vericast, frozen pizza brands have increased their promotions by 214% over the past two years. Consequently, US frozen pizza sales are expected to rise to USD 11.3 billion in 2030, at a CAGR of 6.9%. Consumers are also leaning more toward the four pizza giants, Dominos, Pizza Hut, Papa John's, and Little Caesars, which have more competitive prices, offering better discounts than other pizza outlets.

According to the European Drought Observatory (EDO), drought conditions are forecast to affect Spain, Italy, and France for most of the year, impeding olive oil, tomato paste, and cheese production, while continuous floods in California are expected to hamper tomato paste production in the US, the leading global supplier. As a result, Tridge expects pizza prices to remain elevated in the coming month as the fundamentals continue to support a bullish trend for pizza ingredients.


For related information, follow the links below:

1. The Tridge Spanish (Catalonia) Wholesale Olive Oil Price Has Risen €100 MoM to €5600/mt Over the Month

2. Global Olive Oil Production Is Forecasted Below Average on Stable Numbers in Non-EU Countries and Strong Decrease in the EU

3. Continuous Floods Set to Impact Production in America’s Salad Bowl

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