A Favorite Investment Is Home-Cooked Food

by | Nov 23, 2022

Well, I got married.

I consider myself fortunate after learning that 41% of first marriages result in divorce. I was able to meet a partner that is intelligent, humorous, responsible, and caring.

He also enjoys cooking!

During my time in high school and college, I learned several fundamental cooking techniques. I know how to cook grilled cheese, scramble an egg, and make a killer chocolate cake for a birthday. But I stay fairly close to those simple techniques and recipes.

However, my spouse is the family member that prepares the majority of our meals. He is the one who can describe the various cuts of beef at the market and who is adept at knowing when to use rosemary and when to use dill. (I make an effort to fully avoid the spice rack.)

If food prices continue to fluctuate as they have over the past year, I believe that more individuals would prepare amazing meals at home rather than go out to eat. If you know where to look, this will lead to some fantastic investment opportunities.

Return to the kitchen

In contrast to economists' expectations, the government just declared that the consumer price index (CPI) remained steady for June. The 12-month CPI is now 1.6% instead of 1.9%, which is much below the 2.7% five-year high recorded in February.

There is a lot of commotion right now on whether the Federal Reserve will increase rates once more this year and whether the Fed's claims that the inflation slowdown is just temporary are true.

However, I don't care about the Fed at the moment. There are a lot of data sets that will be released between now and December that could sway the Fed. If the Fed does act, it's unlikely to be until December.

If you look a little closer at the CPI report, you'll find a nice piece of information that nobody is really talking about, which presents a fantastic opportunity for savvy investors.

According to government statistics, domestic food costs decreased in June. Since reaching a peak in September 2015, the cost of groceries and prepared meals has progressively decreased. Earlier this year, there was a brief run-up, but it now seems like prices are rolling over and declining once more.

In contrast, the cost of eating out has been continuously increasing over the same time frame and shows little prospect of abating.

By boosting crop output, technology has helped to lower the expenses associated with producing food. Transportation costs have decreased as a result of low gas prices. The eventual result: Food at the grocery store is now less expensive than it was in 2015.

It has also become significantly more expensive to dine out due to growing labor costs and skyrocketing rents that have pushed many eateries to raise their pricing in an effort to turn a profit.

According to the United States Department of Agriculture, costs for food consumed at home decreased by 1.3% in 2016 compared to 2015 levels. In 2017, prices are predicted to increase by 0% to 1%. Prices for food at restaurants increased by 2.6% in 2016 and are continuing to rise in 2017.

Market Trends Have Changed

The race to turn a profit off the food that will be served to you for supper has begun. Meal delivery businesses like Blue Apron, HelloFresh, Plated, and Home Chef have increased over the previous few years. These businesses serve families, especially millennials, who like to prepare their own meals at home while still receiving a wide selection of meals — much more than just my amazing grilled cheese sandwiches.

Amazon announced plans to purchase Whole Foods earlier this summer. Consider how costs could be reduced and more customers would be drawn in if Amazon could streamline Whole Foods the way it has done its other businesses.

Of course, Wal-Mart and Amazon are competing against one another, which may lead to a pricing war that benefits customers.

The grocery store has gained ground on restaurants in the market. While grocery store food prices are down, restaurant charges are rising solely to cover operational expenses. The decision is clear because most Americans' incomes are stagnant in the meanwhile.

Investors can steer clear of eating establishments, take a fresh look at supermarkets like Kroger, or even keep an eye out for millennial-driven prospects.

Warm up the oven. Clean up the knives. Bring out the recipe book. Dinner must be prepared at home now.