https://www.theguardian.com/food/ng-interactive/2024/mar/27/burrito-price-inflation-vaca-birria-san-francisco [p] Skip to main contentSkip to navigation Close dialogue1/1Next imagePrevious imageToggle caption Skip to navigation Print subscriptions Sign in Search jobs Search US edition[ ] * US edition * UK edition * Australia edition * International edition * Europe edition The Guardian - Back to homeThe Guardian [ ] * News * Opinion * Sport * Culture * Lifestyle ShowMoreShow More * [ ]News + View all News + US news + US elections 2024 + World news + Environment + Ukraine + Soccer + Business + Tech + Science + Newsletters + Wellness * [ ]Opinion + View all Opinion + The Guardian view + Columnists + Letters + Opinion videos + Cartoons * [ ]Sport + View all Sport + Soccer + NFL + Tennis + MLB + MLS + NBA + NHL + F1 + Golf * [ ]Culture + View all Culture + Film + Books + Music + Art & design + TV & radio + Stage + Classical + Games * [ ]Lifestyle + View all Lifestyle + Wellness + Fashion + Food + Recipes + Love & sex + Home & garden + Health & fitness + Family + Travel + Money * Search input [ ] google-search Search + Support us + Print subscriptions * [ ]US edition + UK edition + Australia edition + International edition + Europe edition * + Search jobs + Digital Archive + Guardian Licensing + About Us + The Guardian app + Video + Podcasts + Pictures + Inside the Guardian + Guardian Weekly + Crosswords + Wordiply + Corrections * + Facebook + Twitter * + Search jobs + Digital Archive + Guardian Licensing + About Us * Wellness * Fashion * Food * Recipes * Love & sex * Home & garden * Health & fitness * Family * Travel * Money Food How a viral $22 burrito explains inflation in the US A San Francisco taqueria owner made waves after raising the price of a signature dish. We break down the costs - and why economists say it could be justified Lois Beckett in Los Angeles Wed 27 Mar 2024 10.00 EDTLast modified on Wed 27 Mar 2024 14.20 EDT Share Ricardo Lopez's taqueria is famous for a melt-in-your-mouth birria recipe that takes three days to prepare. Every week, hundreds of customers flock to La Vaca Birria in San Francisco's Mission District for a taste of the slow-braised beef served over rice and beans or tucked into a crispy taco with a side of rich dipping broth. Lopez recently hiked the price of his signature birria burrito to $22, an eye-popping figure even in the pricey city. The move rankled some customers, with one posting a scathing review that expressed disbelief at how the burrito's price had doubled from $11 just two years ago. In a detailed response that quickly went viral, Lopez argued that the price tag was justified due to the runaway costs of ingredients such as beef and onion, as well as rising labor costs. His plea felt like a microcosm of the pain experienced by restaurant owners across the US as food prices remain stubbornly high despite cooling inflation. Many items have yet to return to pre-pandemic prices, leaving small food businesses - already operating on thin margins - with limited options beyond passing the increase to customers. Lopez, 31, talked to Guardian about the factors that helped push his burritos from $11 to $18 to $22, and why he hopes "every damn Mexican restaurant in the Bay area raises their prices". Rising costs When Lopez went back to his food order receipts from mid-2021, and compared them with his recent orders, he found many items whose prices had risen and, in some cases, almost doubled. He shared the receipts with the Guardian to verify the prices; for some items, he could not find receipts from 2021, so we relied on his memory of the price. (These prices are different from his Instagram estimates, since they're based on different dates.) An illustration of a beige colored tortilla laying open An illustration of a beige colored tortilla laying open with a layer of beef An illustration of a beige colored tortilla laying open with a layer of beef and white rice An illustration of a beige colored tortilla laying open with a layer of beef, white rice, and black beans An illustration of a beige colored tortilla laying open with a layer of beef, white rice, black beans, tomatoes, white corn and limes Tortillas The cost of Lopez's tortillas, which come from the family-run Ozuna Tortilla Factory, has remained relatively steady, at 33 cents each. The tortilla brand he used initially cost about 15 cents each. Beef The price of prime midwestern chuck that he uses for his grandfather's birria recipe rose from $5/lb to $6.60/lb within the span of two years. That's an increase of about $4,000 based on the 2,500lb of beef per month Lopez uses now. Cooking oil, white onions The price of their cooking oil increased from $20 to $35 a case, while a case of white onions rose from $15 to $80. The price of oil and onions alone he estimated at an additional $1,000 every month. "It's literally everything," Lopez said. "Beans are up, rice is up." A 50lb bag of beans was $20. Now it's $47. A 50lb bag of long grain rice was $25. Now, he uses jasmine rice, which is $42. An order of about 20lb of tomatoes had been $17; now it's $30. Fresh white corn went from $17 to $39. A pack of 200 limes went from $30 to $60. And it's not just the cost of ingredients that are up. Last summer, San Francisco's hourly minimum wage increased from $16.32 to $18.07. (Lopez pays most of his staff more.) With payroll tax, this translates to at least an additional $3,200 each month. Taken together, these factors alone cost nearly $10,000 a month more than they would have two years ago, according to Lopez's estimates. Behind the cost increases The rising costs of ingredients are driven by some major geopolitical events, from droughts in the midwest and Texas to Russia's invasion of Ukraine. Continuing droughts have encouraged ranchers to shrink the size of their cattle herds, said Ted Schroeder, an agricultural economist at Kansas State University, thus reducing supply and driving up price. At one point in recent years, "close to 60%" of US cattle grazing lands were experiencing significant drought, he said. The wholesale price of beef is up 46% over the past three years, Schroeder said, and beef prices are expected to remain near record highs. The Black Sea region, where Russia meets Ukraine, is a major source of the world's grain supply, but another major crop in Ukraine is sunflowers, which are used to make popular cooking oils, said Ricky Volpe, a food supply chain economist at California Polytechnic State University. The war has pushed the price of kitchen oil up, as well as having effects on global supplies of wheat and petroleum. The jump in Lopez's estimated onion prices was a bit of a head-scratcher, Volpe said, and might be specific to a particular supplier, since overall onion costs weren't up that much. The broader reasons behind price inflation continue to be debated, with some US researchers and politicians arguing that the country is experiencing "greedflation", propelled by companies deciding to turn customers' willingness to pay higher prices during the pandemic into ongoing profits. "After Covid, everything skyrocketed first, and then everything lowered," Lopez said. But "nothing has gone down to pre-Covid pricing, which is hard to understand being anything besides greed". How do you solve the price of a burrito? While overall food prices have gone up sharply in the past few years, Volpe said, they haven't jumped as much as the 100% increase in La Vaca Birria's burrito. One possibility, he said, was that Lopez's small business might have been charging too little in the beginning and operating at a loss. Lopez said that Volpe was right: to attract people to his recently opened business, he had tried to keep the price of his food as low as possible, worried that people would not try something new that was also pricey. In November 2023, Lopez wrote on Instagram, his business account was overdrawn. Then, just days later, a San Francisco Chronicle reviewer crowned La Vaca Birria the best burrito in the Mission district, the heart of the city's Mexican food scene, and customers tripled overnight. The first thing Lopez did after the glowing review wasn't raise his prices: it was lower the commission he was offering to food delivery apps in exchange for displaying his restaurant more prominently on their sites. But in December 2023, still feeling the squeeze, he raised the burrito price from $18 to $20. Then, in early March 2024, he raised it again. taco on a plate on a floral tableclothView image in fullscreen The rising cost of ingredients has affected items across the La Vaca Birria's menu, including its popular quesabirria taco. Photograph: JooksMedia/courtesy of La Vaca Birria As one commenter pointed out, $22 is not the price of a burrito you can eat every day. And that's "completely correct", Lopez said. "We do not see ourselves as an everyday burrito." Higher-volume businesses in the Mission such as the burrito-slinging institution El Farolito might have a smaller profit margin per burrito, but they reliably serve thousands of customers a day. Lopez is serving closer to 200 customers on a good day and is still building name recognition. There is no way a small business, especially a one-location store like Lopez's, can compete with big chains on the cost of their food, Volpe, the food chain economist, said. So deciding to offer a more expensive, high-quality product is the most rational choice. Another unique factor of La Vaca Birria's burrito math is that Lopez has a Muslim business partner and the restaurant serves all-halal meat. That means they attract enthusiastic Muslim customers from as far as Sacramento, but also that they don't serve pork, which, at about $2 a pound, is substantially cheaper than beef, Lopez says. While other Mexican restaurants can make higher margins on their pork al pastor or carnitas burritos, he said, La Vaca Birria doesn't have that option. What is good Mexican food worth? The debate over the $22 burrito has raised questions about whose cuisine is allowed to be expensive. With Italian food, customers "don't have an issue" with paying $22 for pasta al pomodoro, Lopez pointed out, even though the dish is relatively cheap to make: canned tomatoes, dried or fresh pasta, and just a few other ingredients. So when it comes to a $22 burrito, Lopez asks, "What's the difference?" Preparing his birria is an intensive, three-day process, based on a recipe inherited from his grandfather. It takes an hour just to clean the seeds and the stems from the dried chillis for the spice mix that flavors it. The beef is marinated overnight, then braised in the oven at a low temperature for six hours, and then has to chill in the fridge for a full day. At the end, scrubbing the beef pans can take another hour. Lopez says he's seen many Mexican and Chinese restaurants avoid raising prices because the cuisine is valued for offering cheap and takeout meals. "The Chinese and Mexican restaurants have not been increasing prices along with inflation," he said. "I'm barely seeing some restaurants where the burrito is $15. It should have been that two years ago." After multiple television stations did segments on La Vaca Birria's $22 burrito, Lopez says, the restaurant received angry phone calls including one who told them to "get the f*** out of his country" and another calling him an idiot. Some of the backlash appears racist: Lopez said that a Black baker in San Francisco who sells $18 loaves of sourdough talked about facing similar criticism after being named one of the country's most creative new bakeries by Bon Appetit. Lopez says that in the eyes of some, restaurateurs of color may be allowed to innovate, but "people don't think it should be worth any more than a certain price point". But many of the comments on Lopez's Instagram posts about rising costs have been unexpectedly positive, with people across industries saying that the challenges of inflation have resonated with them. He said the controversy had doubled the number of customers coming in to try La Vaca Birria's specialties. "We've seen a lot of business," he said. "People, at least in San Francisco, have definitely come out to support." * Illustrations by Rita Liu; development by Andrew Witherspoon Explore more on these topics * Food * San Francisco * US economy * Inflation Share Most viewed Most viewed * Wellness * Fashion * Food * Recipes * Love & sex * Home & garden * Health & fitness * Family * Travel * Money * News * Opinion * Sport * Culture * Lifestyle Original reporting and incisive analysis, direct from the Guardian every morning Sign up for our email * About us * Help * Complaints & corrections * SecureDrop * Work for us * * Privacy policy * Cookie policy * Terms & conditions * Contact us * All topics * All writers * Digital newspaper archive * Facebook * YouTube * Instagram * LinkedIn * Twitter * Newsletters * Advertise with us * Guardian Labs * Search jobs Back to top (c) 2024 Guardian News & Media Limited or its affiliated companies. All rights reserved. (dcr)