Page 117 - New Employee Onboarding
P. 117
Confidential and Privileged
For the Audit and Finance Committee's Review
Work-paper #2:
Pancake Market Basket vs. Modified Producer Price Index:
Commentary on 2015 Performance for All Categories
Category Contribution to performance Commentary
Our strong partnership with our Liquid Egg supplier enabled us to re-negotiate our Liquid Egg contract. While
Eggs 96%
our costs increased 12% on Liquid Eggs, the PPI showed a 47% YOY increase.
Forward coverage secured during a soft Q1 gave us very favorable YOY pricing on our pork items. Though the
Pork 70%
marketplace (PPI) also showed decreases, our coverage timing resulted in a strong benefit.
Oils 9% Softer markets and timely forward positions enabled us to outperform the PPI indices tied to our items.
Our strategy of fixed pricing on key beef items has protected and brought benefit since markets began their
Beef -48% move up in 2011. We took significant increases for 2015 after benefiting from very market competitive prices
in 2014, while beef markets hit their plateau in 2015 and were essentially flat.
Underperformance to Coffee market due to forward positions taken during 2015 against a market that
Beverage -20%
moved significantly lower in the back half of 2015.
As with the Beef category, CSCS has utilized a strategy of fixing pricing for annual agreements. Markets in
Poultry/Seafood -8% 2015 for further processed chicken moved down significantly during the last half of 2015 due to a higher
growth in supply than forecast, as well as softness in export demand due to the soft $US and political issues.
