Eastern Iowa businesses cope with high cost of popcorn, ice cream and trucks

Businesses in the Corridor, as with everywhere around the country, have added inflation to their list of worries.

Throughout the COVID-19 pandemic, businesses of all sizes have been taking on various waves — from the continuing labor shortage and supply-chain disruptions.

On top of all that, Kelsie Hoth, owner of Frydae in Uptown Marion, had been dealing with construction from the city’s Seventh Avenue streetscape project that closed the street right in front of the year-old business for the first part of the summer.

Inflation, Hoth said, has affected the mainstay of her ice cream and french fry business — dairy.

“Dairy is the main source of our income,” Hoth said. “The dairy prices have skyrocketed. A good-quality, hand-scooped ice cream is also not priced the same as soft-serve you would get elsewhere.”

Hoth also noted the three-gallon ice cream containers they purchase have seen a 25 percent increase.

According to the U.S. Bureau of Labor Statistics, retail prices for milk are the highest ever. The average price was $4.20 a gallon in May, according to BLS data, an increase of around 10 percent from the year before.

The cost for the restaurant’s frying oil also has almost doubled.

“One jug last year was $46. We use a quality oil that isn’t smokey and has a longer life, and that’s now $89,” Hoth said. “We change our fryer oil weekly and filter it daily so we’re using four to six jugs per week.”

FilmScene Executive Director Andrew Sherburne said the not-for-profit Iowa City cinema has been seeing rising costs.

“We’re buying the same toilet paper as everyone else, so we’re seeing that sort of impact,” Sherburne said.

Theaters, whose main profits come from concession sales, also are dealing with issues surrounding other supplies such as containers and liners.

And as for that movie house staple, popcorn, some farmers nationwide currently are choosing to grow less corn in favor of more profitable crops such as soybeans, according to the U.S. Department of Agriculture.

FilmScene, known for bringing filmmakers to Iowa City for students, film enthusiasts and other members of the city’s arts community to meet, as seen a rise in those price tags, too.

“That’s gotten more expensive, but it’s something we want to continue to do,” Sherburne said. “We’re a nonprofit cinema, so we want to make sure we are making the arts accessible.”

The theater industry as a whole has been trying to find its footing again after being seriously hampered during the pandemic. Recent inflationary pressures have added more obstacles, but Sherburne believes FilmScene’s position as a not-for-profit operation gives it an advantage.

“It’s a learning moment as a film industry, but I feel good that we give people an experience worth leaving their house for and we’ve created a community through presenting film,” he said. “So I hope people continue to come out and make it part of what they do.”

One of the most noticeable price increases for all businesses has been at the gas pump. Prices have approached $5 per gallon around the state and surpassed that in other parts of the country.

Chad LaGrange, chief commercial officer for CRST, said fuel as well as the cost of equipment — and trucks themselves — have impacted the Cedar Rapids-based transportation company.

“The cost of a class-A truck is $101,000 compared to $53,000 a year ago,” LaGrange said. “The good news is hopefully that it peaked in March. The price of used equipment is starting to come down, but it’s been a big increase this year.”

Roughly 70 percent of the nation’s freight is transported by truck, according to the American Trucking Associations. Around the nation, diesel fuel has been approaching around $6 a gallon in June. Last year, it was about $3.40.

“There’s two 150-gallon tanks on our larger trucks, so it’s a significant cost driver,” LaGrange said.

“We have a fuel optimization program and fuel surcharge program that helps us manage through this pretty well, but some of those smaller carriers without the buying power of CRST are feeling that impact, too.”

Businesses seek to adapt

All three businesses, in different sectors, are making small changes. But all three businesses feel good about their current level of staffing.

LaGrange said CRST ended 2021 with 6,500 total employees, including nondrivers, and is expecting that number to climb throughout the rest of 2022. The company has added more parental leave and paid time off in an attempt to recruit and keep more employees in a competitive industry sector.

“We feel better than we did at the beginning of the year,” LaGrange said. “Our ability to recruit and retain drivers in the past few months has improved … . We’ve made adjustments this year to help incentivize.”

In Marion, Hoth so far has avoided raising prices at Frydae and she said she doesn’t intend to this year.

“I feel like we need to stick it out a little bit longer,” Hoth said. “With inflation, it’s been kind of hard to make any adjustments because I don’t want to offend customers … . Until we see price increases from distributors, I don’t anticipate any changes here.”

Hoth instead has trained her staff of mostly part-time high schoolers to eliminate waste, which in turn has helped offset some of the inconsistencies in supply orders. The type of utensils and cups they use, for example, can change weekly.

“Those little things go a long way,” Hoth said. “People are noticeably spending less, cutting back.”

Hoth added that having teenagers filling her staff — currently 30 employees — is an advantage.

“It’s fun and they’re working with their peers. They’re the best at referring their friends,” Hoth said. “They come in, work four to six hour shifts and make $12 an hour and it’s an advantage for us because we need several people on staff during the summer.”

In Iowa City, Sherburne said FilmScene has been supportive of the July 1 Johnson County minimum wage increase to $11.56 an hour, but it will increase some labor costs.

The theater did increase prices at the beginning of this year, but Sherburne said it is trying to hold prices where they are. A few strategies include setting the thermostat a little higher and ordering months’ worth of popcorn in bulk when possible.

“We do partly rely on folks in the community through our membership program, (and) donors and grants also help support us,” Sherburne said.

FilmScene also has around 30 employees.

“We haven’t had trouble getting new staff and we feel fortunate that people want to work here,” he said. “We try to make it an attractive place to work and, so far, we’ve been successful.”

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