Mas Torito never thought he’d care so much about a few grams of rice.
And yet, there he was, engaging rather than ignoring a vendor of a machine that dispenses a precisely measured amount of piping-hot, steamed rice. At nearly $10,000, the cost may seem steep considering that a few morsels of rice is just cents at the grocery store.
But Torito runs Kokoro, the homegrown Japanese restaurant that his parents started in 1986. There are two locations, in Denver and in Arvada. They serve about 1,500 bowls of rice a day.
“It dispenses rice to within, I think, two or three grams or whatever amount you specify, and it drops it into your bowl,” Torito said. “It’s the exact amount of rice every single time.”
Restaurants have been operating in one of the more challenging economic eras in years, thanks to a mix of low unemployment rates, labor shortages and rapidly rising food costs. But those who serve rice may have additional headaches as the global rice industry struggles for stability, leaving restaurants like Kokoro figuring out how to save money on mere morsels.
The new fangled machine would not cook the rice. Restaurant-sized rice cookers would still do that. And then Kokoro employees must scoop rice into the new machine. But employees could push a button on the machine to automatically fill a bowl. No more measuring by hand. No overages, or deficits leading to customer complaints. If time and cost savings add up to 10% to 20%, he estimates it could take two years to pay off — an appealing investment.
“Who thought that we would get to the point where grams of rice would be so essential to your operation that we’d be willing to spend $10,000 more or less on a machine that gives you that accuracy,” Torito said. “But that’s where we are.”
The chaos of the rice
Rice has been having a chaotic couple of years. Besides all sorts of supply shortages that cropped up in the pandemic, the Russian invasion of Ukraine disrupted trade routes. In California, where some of the U.S.-supply of medium-grain rice used for sushi rice is grown, drought and water shortages limited planting. Last year, U.S. rice production was cut in half.
In July, Russia withdrew from the Black Sea Grain Initiative that provided safe passage for cargo ships carrying grain. That led to India, which produces 40% of the world’s rice, to ban the export of all non-basmati rice to conserve its supply for its own citizens.
“Food prices have been increasing steadily over the past year and that’s because of a combination of the war in Ukraine, negative weather and countries imposing policies,” said Amanda Countryman, an associate professor at Colorado State University’s Dept. of Agricultural Resource and Economics in Fort Collins. “India imposing export bans is a big deal. It has a dramatic effect on global markets because they’re the largest rice exporter.”
What that means for consumers — and food businesses — is a pound of white, long grain rice is up 46.2% since 2018, according to the U.S. Consumer Price Index. Globally, the United Nations Food and Agriculture Organization said that the rice price index was near a 12-year high in July.
The domino effect of export policies meant to insulate a country’s prices can be devastating for the rest of the world, especially for consumers who eat a lot of rice, Countryman said.
“Rice is a critically important food source around the world so when you have high rice prices, that really has a negative impact on low-income households,” Countryman said. “It’s an important source of calories.”
At least this year in the U.S., a wet season in rice-growing states like California and the south helped boost production. Prices should fall, said Tanner Ehmke, lead economist for grains and oilseeds for the Knowledge Exchange research division of CoBank in Greenwood Village.
However, prices of actual food can only drop so much, he said.
“There’s a lot of points between the farmer and the consumer,” Ehmke said. “And so even though rice prices are going to be coming down because of the bigger crops that we had this year, you still have a lot of cost in the system with labor and the supply chain. Grocery stores are struggling with labor shortages and so the consumer is going to see higher food prices at the grocery store as a result.”
Wheat, for example, has also had a productive growing season this year, he said. But he estimated that actual wheat makes up just 5 to 10 cents of the price of a loaf of bread. It’s all the other inflated costs that keep food prices high — labor, electricity, fuel, the cost of insurance, interest on loans, etc.
Chipotle Mexican Grill has regularly raised menu prices due to higher food costs — notably, guacamole. In the second quarter, the fast-casual chain that got its start in Colorado saw improved margins, partly thanks to lower avocado prices. However, it was offset by “inflation across several food costs, primarily beef, tortillas, dairy, salsa, beans and rice.” Last month, it announced it would raise prices again, due to inflation.
“So even though wheat and rice prices may be going up and down, you also have rising transportation costs, rising warehousing costs, rising labor costs, rising electricity costs, rising fuel costs. You have rising insurance costs, insurance is ridiculous, rising cost of funds to borrow, interest rate expenses are going up,” Ehmke said. “All the other factors are going up.”
Kokoro shares its costs
At Kokoro, rice by itself is barely on the menu. A bowl of steamed white rice is $2.75, about 31% higher than in 2018, according to an old menu captured by the Internet Archive. Rice plays a supporting role for the menu’s stars, like the spicy tuna roll, chicken curry bowl or inari, the seasoned tofu-wrapped sweet rice shaped like a log.
Meanwhile, the expense of running the restaurant is higher too. Takeout containers and lids have raised the cost of items up to 15%. Credit-card transaction fees eat up an average of 2% of the bill and may be going up even more, according to a Wall Street Journal report.
Labor, of course, is a big one for many businesses. It’s not just about higher wages, but new laws that require employers to contribute to policies, such as employee paid leave.
As for wages, those are up, too. Colorado and the city of Denver have increased the minimum wage annually for more than a decade. Every time that happens, all of Kokoro’s hourly staff get a pay raise. Denver’s minimum wage has increased 70% since 2018, and will increase another $1 per hour in January to $18.29.
“You’re paying all of your employees a dollar more an hour so everyone gets a raise, and that’s the way it should be on so many levels,” he said. “For employers like us, we’re so lucky to have them because I’m able to have this meeting in my home office because I have great long-term employees. (But) that means we have employees making $30 an hour because they’re getting that dollar raise every single year that they’re working.”
Reluctantly, Torito has raised menu prices — including for a bowl of white rice, which is up 10 cents since November 2022.
He’s tried to limit the increase on “regular” sized items because that’s what the most cost conscious customers purchase. He felt he had more leeway with items like unagi sushi (grilled freshwater eel) or super-sized portions since those are more expensive normally.
“Our number one tool, and this is the part that you hate answering because it never looks good for your business, but it’s to raise prices,” Torito said. “But because it’s all restaurants and it’s even grocery stores, it doesn’t feel like you’re losing market share. … And some customers won’t understand, but plenty of them do on some level.”
That understanding customer includes Terry Coke-Kerr, a regular who comes in at least weekly (“Usually twice,” she said) for her beef bowl fix, the thinly sliced beef and onion mix slow cooked in its own juices and served over a bowl of steamed rice.
Sure, she said during a recent lunch visit, menu prices have gone up. Not just at Kokoro but elsewhere. But the beef bowl still seems fair at $8.65.
“This is probably the best deal” around, she said. “It’s very, very reasonable. But I will pay more if I need to. It’s really because I like the food.”
Photos by Olivia Sun, The Colorado Sun. Design by Danika Worthington, The Colorado Sun.