MAYBE your favourite teh tarik has become more diluted while your regular noodle stall has been skimping on ingredients and taste. As inflation hits historic highs and food costs follow closely, the humble hawker understandably gets squeezed by his rising overheads and notoriously unsympathetic customers who live by the mantra 'you raise prices, I stop coming'.

Miang from Sweet Salty Spicy

On the other end of the dining spectrum, how are restaurants coping with rising food costs? In a recent Wall Street Journal article, restaurants in the US have been supporting their flagging bottom lines by offering more pasta dishes on their menus, turning beef trimmings meant for staff meals into fancy sushi rolls, cutting portions or raising prices. High-priced ingredients are replaced with cheaper and more profitable alternatives, while chefs stretch their skills to come up with creative dishes that look and taste good while putting a clamp on costs.

In Singapore, diners have yet to slow down on their spending habits, but that doesn't mean that rising food costs haven't led restaurants to do some number crunching of their own. It's just that they're doing it in their own creative ways.

At Saint Pierre, chef Emmanuel Stroobant says: 'The two biggest issues for us are the price of foie gras - up 10 per cent - and dairy products like cream and cheese which have gone up since the EU cut subsidies for the farming industry in France.'

Win-win situation

Saint Pierre, which is known for its good value set lunches, is not raising its prices. 'We are still offering a set lunch at $28 but using cheaper cuts of meat processed in a very different way, eg 36-hour braised lamb neck And next to this, we offer a top ingredient menu where the cost of ingredients is passed to the customer. It's a win-win situation where people can get a quick quality bite on a budget, or still indulge in caviar and lobster,' says Chef Stroobant.

At Wild Rocket, owner-chef Willin Low has vowed to hold off raising prices for as long as he can. 'Besides seafood, everything else has increased,' he says. 'Olive oil has increased by about 10 per cent. Beef has also increased by close to 20 per cent. Dairy products are the worst - cheese and butter have increased by over 20 per cent. We tried using different brands for our products but the taste is just not the same. For example, our strawberry cheesecake and dark lava chocolate gateau - a change in one ingredient results in a different end-product. So we decided to bite the bullet and continue using the same brands so that we won't compromise on our end product.'

Over at Thai bistro Sweet Salty Spicy in Upper Bukit Timah, chef-owner Christopher Millar says: 'We are looking at new ways to save money, like dealing more directly with suppliers. At SSS, my partner is Victor Chia, a vegetable provider who can get access to much better prices at the wholesale market. I import my own wines directly from Australia. This is more troublesome and time-consuming. But the cost savings are significant.'

Still, he says that you don't need expensive ingredients to make best-selling dishes, naming his silken tofu with pork and crab stuffing (a signature dish from Sydney's Sailors Thai) as an example. While the ingredients aren't expensive, it's labour intensive to make but 'is well worth the effort when we see the joy on the customers face'. It's the same for the miang of prawn and pomelo - again, made from inexpensive ingredients but still a best-selling item.

A big headache for Julien Bompard, owner of Saint Julien, is rising cheese prices, especially since he and wife Edith Lai also own the artisanal cheese shop Le Fromagier on Mohamed Sultan Road. 'We are looking at new challenges when it comes to costing and profit margins but there is nothing we can do about the product itself,' he says.

To combat the rising prices, chef Bompard is bumping up the retail aspect of the shop, with 'take-away fondue packs, olive tree salad bowls, handcrafted knives, corporate hampers and other gift ideas'. This way, 'we can maintain the cheese at current prices,' he explains.

Even if he can't control cheese prices, he has found a way to combat rising butter cost. 'There is a revolutionary process used by organisations like the armed forces and cruise lines which is now coming into gastronomy. It's butter of cacao in powder form - which is the excess of fat/oil derived from cocoa when making chocolate for retail consumption. The chocolate industry has been able to remove this cocoa product and convert it into powder form. I am using it to sear fish, meat and as finishing for my sauces. It gives all the advantages of using butter but in much less quantity.'

Lamb from St Pierre

In his kitchen at Saint Julien, he has also come up with other creative ways to work with relatively inexpensive ingredients. 'There are techniques which help us in our presentations, like espuma (foam) and lecithin. The espuma allows us to foam up cream-based sauces and give the guests an impression of larger volume on the plate. The lecithin also helps to stabilise a very airy emulsion.'

A best-selling dish that resulted from this 'which has satisfied a lot of our guests is scrambled egg with lobster emulsion and boutargue', he says. 'The dish gives a sensation of volume with the emulsion of our lobster bisque, as well as slices of boutargue (cured fish egg) from Taiwan. The boutargue is quite expensive in France and Spain, but in Taiwan we can find it at very good quality and reasonable prices.'

Sometimes, though, watching your cost can also result in better quality ingredients, says chef Marcus Lau, who took over the helm of Sebastien's Bistrot in Greenwood six months ago. A veteran who learned his trade in France, he says that going back to traditional kitchen practices can help save money and give you better quality. 'Right now, it's not uncommon for kitchens to use pre-prepared ingredients like frozen fish that has already been cleaned and portioned.' For this convenience, restaurants can pay a 30 per cent premium, but chef Lau instead orders a whole fish, fresh not frozen, which costs the same as the frozen pre-prepared fish but he can use the carcass for stock or other uses, and he enjoys better quality from the fresh fish.

As for beef, a general practice is to buy it frozen and in large quantity. 'But when you have an array of restaurants buying from the same supplier, you have a scenario where he can see the demand and dictate the price.' That's why he would rather source meat from other alternative avenues, at the same price, and he benefits from knowing the origin of the animal, when it was slaughtered, and he gets the meat fresh within a couple of days.

Armed with years of experience and deep understanding of his ingredients, chef Lau is able to prepare equally honest French staples like his highly popular duck confit and beef bourguignon, as well as his own creations like braised pork belly.

Besides watching prices, holding out against the competition is another challenge. 'It's the customer base you build up, the loyal regulars, that will see you through the years,' he concludes.

What most of this boils down to is that people are still eating out as much as they did before the economy started showing signs of instability. That business still remains good gives restaurants the leeway to keep prices unchanged or at worst, raise it marginally as in the case of Au Petit Salut in Dempsey which raised its already low-priced set lunch from $25 to $30.

Still good value

'But no one complains as it is still good value,' says chef Patrick Heuberger who adds that keeping prices low forces him to be more creative. 'Using black truffle and caviar is easy! For many years, I have been doing magic with my set lunch. I think we have been doing very creative dishes with cheaper ingredients all this while.'

Saint Julien's scrambled egg with lobster bisque emulsion and boutargue

Roberto Galetti of Garibaldi adds that as long as he can afford it, prices will stay the same, although he has increased set lunch prices from $32 to $35 'which is still affordable, given the quality and value'. But with dairy and foie gras prices going through the roof, 'sometimes we have no choice but to slightly increase the price while reducing the margin - a 50:50 understanding between us and our customer'.

Using seasonal ingredients is a way of saving costs without compromising quality, says Matthew Lawdon of Graze, using his lamb rack recipe as an example . 'It's always been relatively expensive but has gone up even more recently. We serve this dish with house marinated vegetables and hummus with vine ripe tomatoes. This adds the base of the dish without having to increase prices dramatically to serve it. We use vegetables in high season and abundant, and hence cheaper.'

So, as long as business stays good, restaurateurs are in a better position to keep prices stable. But being chefs, there's a limit to counting pennies. As chef Heuberger puts it: 'If I have to choose between a China walnut and a French - whatever the price of the French walnut, I will still use it!'

This article was first published in The Business Times on Mar 15, 2008.