Welcome to the Great Bagel Boom, a series celebrating the vast creative expanses of bagel culture across America—because yes, you can find truly wonderful bagels outside of New York now.
When you spot the line snaking out of a tiny brick house on Forest Avenue in Portland, ME, you’ve reached Rose Foods. The shop is a neighborhood staple, one that Chad Conley opened in 2017 to bring Ashkenazi Jewish food and the charm of an NYC Lower East Side bagel shop to Portland. The design and vibe of the space evokes the nostalgia of an old-school New York deli, with black-and-white penny tiling and wire baskets filled with bagels. But when it comes to price, Rose Foods—and other craft bagel shops emerging across the country—can’t do things the old-fashioned way. Making great bagels with high-quality toppings and schmears is more expensive than ever.
One of the most impressive bagels that comes out of Rose Foods is the Rivington, which features smoked sable (black cod), beet and horseradish cream cheese, capers, and cucumbers. At $20 for an open-faced sandwich, it’s also the shop’s most expensive bagel. That might feel like a shocking amount to pay for a bagel, but Conley says the restaurant is actually making less money on this dish than on other bagels that are less expensive but cost less to produce. Conley says the Rivington would cost a whopping $30 if he was trying to make a significant profit.
At this point it’s pretty much impossible to ignore: Whether it’s $7 cold brew, $30 shrimp cocktail, or a $20 bagel sandwich, food prices are rising at the fastest rate in decades. And it’s not just the cost of ingredients that’s driving these prices up—costs of labor and rent are piling up too, especially as restaurants increase wages in an attempt to attract workers in a competitive labor market.
Beyond the inflated costs of hard-hit staples like eggs and bacon, Rose Foods also faces rising prices for specialty ingredients that grace its creative bagels, like oyster mushrooms and golden beets. “The alternative is to figure out how to cut costs,” says Conley. “But you can only do that so much before your quality starts to suffer.”
Here’s how Conley breaks down the cost of the $20 Rivington.
- The dish: The Rivington
- The price: $20 (open-faced)
- The components: Sable, beet and horseradish cream cheese, capers, cucumbers, and your choice of bagel.
The ingredients: $8.70
- Bagel $0.68
- Beet and horseradish cream cheese: $0.80
- Sable ($40/lb), open-faced portion of 75 g: $6.67
- Cucumbers: $0.30
- Capers: $0.25
The making of Rose Foods’ bagel dough, which uses both sourdough and yeast, is inexpensive. Ingredient costs are low for other important ingredients, too, like cream cheese, cucumbers, and capers.
But of course fish is expensive. “I don’t know that there’s another bagel shop in Maine where you can get sable,” Conley says of the smoked black cod he ships in from Brooklyn’s legendary Acme Smoked Fish. “That stuff is probably the most expensive product we buy. We measure it very, very carefully. We know down to the gram how much each customer is getting.”
Labor Costs: Slightly less than $10 per open-faced Rivington
Expenses like labor or rent might be more difficult to factor into the final price of a bagel than that of cream cheese or flour, but Conley says staffing is one of the shop’s most significant costs. The cost of paying Rose’s team has increased by about 50 percent in the past three years as Conley raises hourly pay. About 45 cents of every dollar spent at Rose now goes to staffing costs. “If that number is higher,” Conley says, “then we don’t have a sustainable business, and if that number is lower, then it’s a sign we have room to increase wages.” Whether it’s a half-dozen bagels or an open-faced Rivington, about half of any item’s total cost to customers goes toward paying the shop’s workers.
Hourly pay for the kitchen staff is variable, but starts at $18 an hour. Hourly pay for service staff is also variable, but starts at $8 an hour plus tips. “It's the restaurant's largest expense category by far,” Conley says, “so it has a huge impact on our menu prices.”
Rent and other fixed costs: Variable, and dependent on balancing other costs
Rent on Rose Foods’ space currently costs around $4,000 each month and increases annually. There are other fixed costs such as insurance, utilities, and security. When it comes to rent, Conley says the situation differs business to business, depending on the lease agreement reached with the landlord. “Every business is different and your goal as the person operating the business is to make sure those expenses stay reasonable,” he says. As expenses like rent go up for the business, bagel prices go up, too.
Balancing the costs
When considering the price of ingredients, labor, and rent, the $20 Rivington is practically being sold at cost. That leaves no room for other shop expenses—things like construction or equipment replacement, loan payments, or his own salary. Conley says that he would charge at least $30 if he wanted those costs covered.
So why does he charge $20 and not more? Other bagels on the menu are more profitable, and offset the Rivington.
The most popular sandwich at Rose Foods is the Classic Nova—a bagel topped with Nova lox, cucumber, dill, onion, capers, and plain cream cheese. Because of its popularity (the shop sells about twenty times more Classic Nova than Rivington bagel sandwiches), Rose Foods can purchase the smoked salmon in bulk, which contributes to a higher profit margin. It costs $15 for a bagel sandwich and $18 for an open-faced version—still not cheap, but with lower ingredient costs.
Rose Foods also sells retail items like a baker's dozen of bagels and tubs of cream cheese for people to take home with them. The margin isn’t as high on these bulk items, since the shop can’t charge as much for retail as they do for restaurant menu items like the Classic Nova or the Rivington. But the volume is much higher, and customers who purchase these items spend less time needing service in the shop. That also helps with costs.
“This isn't one of our top sellers,” Conley says of the Rivington. “It's okay for us to have an item like this on the menu as long as it gets balanced out by items with better margins. Our customers probably don't see it this way, but we subsidize the price.”