Behind the curtains: What goes into the decision of a price increase

Behind the curtains: What goes into the decision of a price increase

Prepped Adventures: #1 The oven watchers Reading Behind the curtains: What goes into the decision of a price increase 4 minutes Next Prepped Adventures: Designing our oatmeal bowls

One of the least favourite things we like to do as a business owner is to announce price increases. 

We love talking about new dishes we’re launching, the launch of our subscription service, and new partnerships we’re involved in. But announcing a price increase? As consumers we don’t like it – as a business owner on the other side of the fence, it’s actually equally unpleasant to have to talk about price increases as well.

We’ve shied away from increases – since we launched Prepped four years ago, we’ve only had one price adjustment – while navigating the choppy waters of chicken shortages, pandemic supply chain shocks, and hearing just about every supplier, from our paper label printer to our kimchi ahjusshi  telling us apologetically that their prices are going up over the past year.

In the midst of all this, I’m proud that we’ve managed to keep making great Prepped meals, and I’m proud that we haven’t caved to market pressures to compromise our quality.

However, as we look to 2024, we realized that for us to continue to uphold the standards that we’ve committed to you, we will have to raise the prices of our kits.

Here are some numbers that have contributed to our decision:

  • Delivery cost: It now costs us around $10-$12 per address to deliver your Prepped meals to you, not including wet weather surcharges. Back when we first started, delivery fees were as low as $5 - $6 per address. We’ve been subsidizing the difference all this while as we’ve learnt that good delivery drivers are expensive for a reason (no more misdelivered meals and wasted food!), that said the almost 100% increase in delivery costs have made some of our small orders loss makers.

  • Pork: The price of our pork has increased twice in the last 6 months alone. First increase (October 2023): an average 20% increase across all the SKUs we buy (some specific cuts increased by 9%, some others went up by a whopping 30% overnight). Second increase (December 2023): prices went up another 10% to 22%.

  • Chicken: The 2022 chicken shortage was a shock not just for the chicken rice sellers. Then, the price of fresh chicken and chicken breast increased by 50% overnight. We chose not to increase our chicken prices during the shortage as chicken is the backbone workhorse protein that we all depend on and we value price stability and dependability for our customers. While it has come down slightly since, the price has settled at ~30% of what it used to be and looks to remain that way.

  • Beef: In 2023 the price of our chilled beef increased by 33% due to increased freight costs and supply shortages. Unfortunately, our suppliers have indicated that these elevated prices are here to stay.

  • Veggies… should I go on? Just a random sample of our veggies shows me that carrots, red and green peppers, cilantro, chillies, and spring onions cost more today than they did even just a year ago.

At Prepped, our mission continues to be to make cooking easy, while allowing you to save that 1 hour a day to do the things you love. We believe a large part of cooking being “easy” is also about bringing value (i.e. time savings) and being an “easy” choice to make, compared to other options in the market.

And that’s why we’ll always be committed to making Prepped meals accessible and affordable for as many as possible, while continuing to deliver the value and convenience that has brought us this far.