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The Impact of the Lettuce Shortage on Restaurants

We’ve experienced, more than once, the rising demand for chicken wings and the resulting shortages and higher prices. Then, just in time for football season, chicken wing prices dropped to pre-pandemic levels—a win for the restaurant industry that has faced its share of losses. Unfortunately, we are not so lucky in the lettuce department. Let’s explore how restaurants are handling our latest crisis.

The Cause of Our Current Lettuce Crisis

As with most current upheavals, we have, in part, the pandemic to blame. Due to supply chain issues and the volatility in the market, farmers readjusted their usual crops, planting less lettuce than normal. As we made our way out of the shutdowns, demand rose, but there was not enough lettuce to fill it. Hence, rising prices. 

Then, Impatiens Necrotic Orthotospovirus (INSV) struck the Salinas Valley crops preventing a significant quantity of lettuce from maturing. As of mid-October, production was down by as much as 50%. Of course, you’ll see many other explanations for our current lettuce crisis on the internet, including climate change and the resulting drought conditions. Australia’s lettuce shortage has been caused, in part, by devastating floods that wiped out farms. 

What we do know is that the result of farming practices, plant pathogenic viruses, and changing weather has resulted in less romaine and iceberg lettuce. 

The Cost of Lettuce

According to KOLD News in Arizona, one of the main regions for lettuce production, romaine lettuce usually costs about $5,000 an acre. Today, that acre costs anywhere from $30,000-$50,000.

According to Restaurant Business, in 2019, the average box of iceberg lettuce cost about $14. Today, that box is $67. Romaine has gone from $22.75 to $63 a box. Red leaf lettuce is in the $45 range. In addition to higher prices, restaurants are facing reduced quality. 

These prices are particularly hard on restaurants whose menu is focused on healthy salads. Green + The Grain in Minneapolis is giving customers a suitable option: Substitute spring mix in their salads or pay a surcharge for salads with romaine lettuce. Another example of changing times is the menu at Disney’s popular Be Our Guest Restaurant, where they switched the Country Seasonal Salad out for the Country Pear Salad.

The Good News, Maybe?

This, too, shall pass. As the seasonal lettuce production shifts from California to Arizona, the amount of lettuce and quality should improve, and prices should start decreasing. At least, that’s the consensus of some market predictions. The challenge Arizona faces is the current water shortage. The U.S. Interior Department is cutting Arizona’s water allocation from the Colorado River by 21%, and agriculture uses 72% of this allocation.

Some suggest it may be time to go back to seasonal eating, as many restaurants have done. Somewhere along our industrial timeline, we got used to eating lettuce in the winter, no matter what our area of the world could produce. Eating seasonally and locally offers many benefits, including supporting neighborhood farmer’s markets. Maybe, this is the year of the root vegetable, or maybe not. 

The potato harvest was also recently affected, resulting in a shortage and higher prices. The latest data from the Consumer Price Index shows potatoes costing about 3.5% more in September 2022 compared to August. This, however, is lower than the 6.1% increase from June to July 2022 and the 21.8% increase from July 2021. Lettuce was up about 7% from August to September.

Get on a Produce Contract

Fresh Concepts, a third-party produce management company, assists thousands of restaurant locations with their food cost through aggressive contractual programs. Under these agreements, specifics are determined at the onset to help limit the overall impact of such events. Also through their vast procurement efforts, they can help guide you to alternate varietals, growing regions, shippers, etc. to help limit your exposure. In other words, having a produce contract in place is almost like a mini insurance policy. For more information about Fresh Concepts or F&B Insights click here.

F&B Insights

At EMERGING, our goal is to help our restaurant partners flourish, despite economic challenges and changing times. Recently, we developed F&B Insights to help them overcome the changing landscape brought on by inflation and market trends. The world’s largest menu database gives you the competitor and market pricing information that can help you make informed decisions and price items with confidence. To learn more about F&B Insights Menu Pricing or to schedule a consultation, contact EMERGING today. 

FAQS

Why is lettuce so expensive?

There are many reasons for the rising lettuce prices. Market volatility always plays a part and includes increased demand and a shortage of supply due to planting practices during and after the pandemic, damage brought on by a plant pathogenic virus, and weather conditions.

When will the price of lettuce decrease?

As with most products, that is a difficult call to make. However, many in the industry believe prices will settle once the shift from the growing season in the Salinas Valley in Central California to the Arizona-California desert is complete. The production in Salinas ends in mid-November. 

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