I got married well.
After seeing the recent data that 41% of first marriages end in divorce, I consider myself lucky. I was able to find a partner who is smart, fun, responsible and compassionate.
And he loves to cook!
I picked up some basic cooking skills during high school and college. I can make grilled cheese, boil an egg and bake an evil chocolate cake for someone’s birthday. But I don’t stray too far from those easy recipes and skills.
On the other hand, my husband is the one in our family who makes up the bulk of our meals. He is the one who can explain the different cuts of beef in the food, and he is the one who knows when to use dill and when to use rosemary. (I try to stay completely away from the spice rack.)
If food prices continue to change the way they have over the past year, I think we will see more people like my husband cooking amazing meals at home instead of going out to eat … and this will create fantastic investment opportunities if you know where to look .
Back to the kitchen
The government recently announced that the consumer price index (CPI) was unchanged for June, while economists expected inflation to reach 0.1%. The 12-month consumer price index fell to 1.6% from 1.9% and is well off its five-year high of 2.7% reached in February.
There are a lot of problems going on right now about whether the Federal Reserve will raise rates again this year and whether the slowdown in inflation will be more than temporary, as the Fed claims.
But right now I don’t care about the Fed. If the Fed is going to act, it’s unlikely to be until December, and from now until December, a lot of data will be released that could shake the Fed.
If you dig a little deeper into the CPI report, there was a great set of data that no one is actually talking about … and that creates a great opportunity for smart investors.
The government reported that food prices (food at home) fell in June. The price of food bought at the supermarket and prepared at home has been steadily falling since the peak in September 2015. Earlier this year, we experienced a small stagnation, but prices seem to be rolling over again and moving lower.
In contrast, the price of food bought in restaurants has been steadily rising over the same time period and shows no small sign of a concession.
The technology has worked to reduce costs in food production by increasing crop production. Low gas prices have also reduced transportation costs. The end result: It is now cheaper to buy food in the store than in 2015.
Meanwhile, rising labor costs and rising rents have forced many restaurants to raise prices just to make a profit, making them far more expensive.
The U.S. Department of Agriculture reports that food prices at home fell 1.3% in 2016 from 2015 levels and are expected to rise between 0% and 1% in 2017. Restaurant food prices jumped 2 .6% in 2016 and didn’t slow down in 2017.
The market has changed
The race is to make a profit from what hits your dinner table. Over the last few years, we have seen a sharp rise in meal delivery services such as Blue Apron, HelloFresh, Plated and Home Chef. These companies serve families (especially millennials) who are looking for the comfort of cooking at home, while getting a unique variety of food – far more than my awesome grilled cheese sandwiches.
Earlier this summer, Amazon announced plans to buy Whole Foods. Imagine if Amazon could target Whole Foods the way it did its other businesses, reducing costs and attracting customers.
And of course, Wal-Mart is going along with Amazon, which could create a price war that benefits consumers.
The market has shifted in favor of the grocery store compared to the restaurant. Food prices are falling in stores, while restaurants are raising prices just to exceed business costs. Meanwhile, wages for most Americans are stagnating, making the choice obvious.
Investors should be wary of restaurants and look at new grocery stores like Kroger or even watch out for new millennium-driven opportunities.
Preheat the oven. Sharpen the knives. Bust out the cookbook. It’s time to prepare dinner at home.