Just in Time for 4th of July: Wells Fargo Food Report Reveals Home-cooked Burgers Three Times Cheaper Than Dining Out

Presented by Dr. Michael Swanson, Chief Agricultural Economist; Courtney Schmidt, Sector Manager; and Robin Wenzel, Group Head, Wells Fargo Agri-Food Institute (Reprinted with permission from Wells Fargo.) July 2, 2024

For many, the Fourth of July is all about the summer heat and backyard grilling, and this year, Wells Fargo’s Agri-Food Institute calculated exactly how much hosts of the classic backyard get-togethers will save as they build the hamburger of their dreams. With the worst of food inflation in the rearview mirror, consumers will be delighted to learn that the home-cooked burger will cost three times less than a burger purchased away from home.

The mid-June 2024 Consumer Price Index (CPI) for Food at Home rose by 1 percent compared to mid-June 2023 when this same index was rising at 5.9 percent. In contrast, the mid-June 2024 CPI for Food Away from Home rose by 4 percent, as the industry continues to pass along the cost of higher restaurant worker wages to the consumer. The longer this mismatch in inflation for Food at Home versus Food Away from Home continues, the more incentive Americans will have to consider home-cooked food for big savings.

Just how big can the savings be? Wells Fargo looked at the price of ingredients for a home-cooked, quarter pound hamburger versus the average cost of popular fast-food restaurant quarter pound burgers. The cost savings for home cooking are substantial, especially if you are feeding a hungry group. The current cost of ingredients to prepare a quarter pound hamburger with cheese, tomato, and lettuce at home is $2.16 per burger.1 Of course, those doing the preparation and cooking are supplying the labor and overhead, but that’s part of the joy of being with friends and family on the Fourth.

In contrast to the home-grilled burger, a sample of five popular Quick Service Restaurants (QSRs) shows the average price of a quarter-pound burger is $6.95.2 Bottom line, the restaurant labor and overhead make the QSR burger 3.1 times more expensive. For a party of 10, the home chef will save nearly $50 ($47.90, to be exact) on burgers by firing up the grill. One might say, “Build a burger at home, save a fortune.”

This is right in line with the USDA’s Food Dollar Series which shows the average amount of the restaurant-provided expense in 2022 to be 70 percent.3 In other words, if one spends $100 at a restaurant before taxes and tip, only $30 of that total is actually for the food ingredients.

So, how are other typical food items looking for the Fourth? Let’s start with a favorite side dish and tick through the cookout menu.

Star-spangled Potato Salad

Potato salad should get a place of honor on the plate, particularly if you are willing to prepare it at home. The Bureau of Labor Statistics (BLS) reports show that white potatoes can be found across the nation for $0.96 per pound.4 That’s a 4.4 percent price decrease from this time last year for potatoes.5  Supermarket prices for potato salad are down 0.7 percent from a year ago.6 So, whether you prepare the potato salad at home or go with store-bought, savings are there to be had.

My Country, ‘Tis of Chips and Dips

The mid-June price for potato chips increased 2.7 percent since this time last year, a fairly modest increase.4 Given the total cost of a bag of chips, they are still a good buy for appetizers and a side for burgers. Why not make things fun and explore some of the newest potato chip flavors that manufacturers are offering. Potato chip bar, anyone?

As for dips to accompany the chips, it’s a split decision. Salsa prices are up 2.5 percent from a year ago,6 but guacamole declined by 1.1 percent.6 Looks like tortilla chips and guacamole will also be a smart snack choice for this year’s celebration.

Give Me Liber-tea (and Other Beverages)

Another Fourth of July favorite is iced tea. Ready-to-drink bottled iced tea prices have risen 2.4 percent,6 which is in line with the beverage category as a whole. Preparing your own iced “liber-tea,” however, will save big money, and it also helps reduce packaging and transportation involved with bottled tea. Beer prices are still rising at a 1.2 percent rate, and wine posted a 3.4 percent increase from a year ago.4 Overall, beer pricing has risen more steadily since COVID-driven food inflation. Soft drinks are seeing a bit of a Dr. Jekyll and Mr. Hyde food-inflation moment with 12-ounce cans up 4.8 percent and 2-liter bottles down 6.5 percent from a year ago.4 This discrepancy can be explained by the fact that the price of aluminum for the cans has risen 7 percent from a year ago.7 This cost is passed along to the consumer, and will have an impact on one of America’s favorite dessert floats.

Sweet Treats of Liberty

Let’s not forget something sweet to finish off the meal. Ice cream prices will be more expensive this year with a 3.3 percent increase.4 If you like to build a root beer float for the Fourth, you’ll feel a double whammy since root beer prices have jumped 8.8 percent from a year ago,6 reflecting the cost of sweeteners and packaging.

In the bakery section, prices continue to climb with cakes up 1.6 percent from this time a year ago,6 and cupcakes climbing a strong 5.6 percent.6 This reflects the increasing wage rates that bakeries and supermarkets continue to face. So, why not pay yourself by baking at home for the big celebration? Even though cake mixes are up 6.6 percent,6 there’s still opportunity to give your wallet some relief by employing your baking skills since most other ingredients are already in your pantry and refrigerator. 

Yankee Doodle Went to Takeout?

Without question, the greatest savings this year will be realized by those who build burgers and fixings at home. That said, there is hope for the consumer who needs to capitalize on convenience, since a number of the most popular fast-food restaurants are rolling out “value deals” as restaurants fight for consumer dollars. So, while the home-grilled burger may be the better route for your group gathering on the Fourth of July, it appears that consumers will still be able to grab that “burger to go” without emptying their wallet when there’s just no time for cooking and cleaning. Either way, the day will surely be delicious for those celebrating the birth of our nation.

About the Wells Fargo Agri-Food Institute 

The Wells Fargo Agri-Food Institute is a team of national industry advisors with a high level of sector expertise who, along with the team’s chief agriculture economist, provide economic insights, analytics and research across the food and beverage spectrum. With a keen understanding of the challenges and variables inherent within the industries, Wells Fargo Agri-Food Institute’s insights are highly sought after by business leaders and the media. Follow the Agri-Food Institute’s most recent research, blogs and updates at Agri-Food Intelligence.

SOURCES:

[1]USDA Food costs (Mid-June) and Walmart online shopping portal Build a Burger Save a Fortune (Quarter pound burger with cheese, lettuce, tomato)

Quarter pound of 100 percent ground beef USDA $5.15 per lb. = $1.29

Hamburger bun – Seeded, white (Walmart online price-mid-June) = $0.43

Slice of cheese (0.6 ounces) USDA cheddar $5.55 per lb. = $0.21

Iceberg Lettuce USDA $1.69 per pound (one ounce) = $0.11

Tomato USDA $1.86 per pound (one ounce) = $0.12

Total ingredients = $2.16

[2]Average cost for five fast-casual/quick-service restaurant burgers: McDonald’s Quarter Pounder, Burger King Whopper, Wendy’s Single, Five Guys Burger and Smash Burger CLASSIC SMASH® BURGER

[3]USDA Food Dollar Food Dollar Application (usda.gov)

[4]Bureau of Labor Statistics (BLS) Mid-June data

[5]Federal Reserve Economic Data (FRED) data as of 6-2024

[6]NielsenIQ – Data reported by NielsenIQ through its Discover Service for the categories of fresh produce, bakery, deli, and non-alcoholic beverage for Q2 to date ending 5/18/24 for the United States. The data consists primarily of compilations and/or estimates based on data from various sources and is for informational purposes only.

[7]World Bank Pink Sheet for monthly commodities Commodity Markets (worldbank.org)