Staff

Supply Chain Disruptions – Not Just Restaurants Are Struggling

We have all read the headlines about it. We all probably have experienced it. Finding labor right now has been brutal for the restaurant industry. Restaurants and businesses are struggling to fill open positions, but all through the supply chain: growers, farmers, and trucking companies are all experiencing labor shortages.

Labor Shortages in all Segments

While many still scramble to find ways to attract employees, what if those employees have nothing to prepare and serve? As we work our way into the new normal, part of the concern is that many industries are competing for labor. In the June Agriculture Barometer from Purdue University, 66% of farm operations surveyed expressed having difficulty hiring suitable employees. Compared to only 30% in 2020. Owners and operators have expressed concern about attracting workers that may opt for other jobs at warehouses or restaurants where starting pay may be higher or include additional benefits. Additionally, according to an article from Transport Topics, delivery companies are struggling to fill driver openings. With supply high and driver labor low, there simply isn’t enough delivery drivers out on the roads for the demand.

What does all this mean for restaurants? Well, potentially higher prices or no supply at all. Bloomberg News reported on the United Nations Food and Agriculture Organization’s 33% increase in their food price index compared to this time last year. They go on to state that labor shortfalls have been dire for food producers around the world. Crops cannot be picked in the fields. Dairy farms have been dumping milk because there are no drivers to transport the milk. Some restaurants are having orders canceled because deliveries cannot be delivered on time or there is no product to be delivered. As consumers get back into the marketplace and demand food from restaurants, getting that supply there with a lack of labor throughout the supply chain is incredibly challenging.

What can restaurants do?

Find alternative suppliers.

If you are only using one supplier for all of your ingredients, it may be a good idea to branch out. Look for small-scale farms that may be able to provide seasonal produce. A backup supplier is always a good idea.

Be flexible.

Easier said than done. However, if you rely on a supply chain for certain aspects of your business and this channel is disrupted, you still need to provide your service. Have a flexible menu so that if you cannot get a shipment of lettuce, for example, you can still serve something in place of a salad.

Be patient.

We are all coming out of COVID into this new normal together. Demand is way up. Supply is potentially still low. It is going to take some time for our economy and supply chains to balance out.

Author:
Categories:
Staff
Tags:
  • Subscribe to our latest insights

chatsimple

Are you capital raise ready?