COVID-19 is forcing a lot of operators to get back to basics.
When the pandemic first struck, much of the attention on foodservice centered around the restaurants. But as the weeks of quarantine ticked by with no real end in sight, supply chain disruption also entered the public discourse. Meat and animal proteins were in an especially precarious position with grocery stores and even major chains like Wendy’s struggling to meet demand.
Although these early shortages have leveled off to a degree, all stakeholders along the supply chain (manufacturers, distributors, and restaurants) have had to learn how to push products in an uncertain environment.
On the restaurant end, operators are finding creative solutions to ride out the supply chain rollercoaster. In Southern California, NORMS Restaurants benefited from having saved $2 million worth in meat inventory. Without that stockpile, the micro-chain would have been in big trouble as far as its meat offerings were concerned, says corporate executive chef David Cox.
But NORMS still had to figure out how to move an unexpected surplus when two truckloads of eggs arrived with no dining room to serve them. Following approval from the Department of Agriculture, Cox used a limited-time offer to sell eggs through a breakfast care package deal. Each package comprised bulk products: 30 eggs, a pound of bacon, a pound of sausage, three pounds of hash browns, orange juice, and fruit.
“It’s been like a bunch of crazy swings trying to keep up with it all. You want [menu] coverage, but you don’t want too much coverage, and that’s been the real challenging part,” Cox says.
This is just one of the myriad ways restaurants are adapting, as John Davie, CEO of Buyers Edge Platform, can attest. The group purchasing network leverages the purchasing power of smaller foodservice operators to negotiate contracts with distributors and manufacturers. Through the company’s national footprint, he witnessed immediate changes in the supply chain when the pandemic arrived.
“With the abrupt stop in the whole industry, there was a lot of scrambling going on,” Davie says. “The manufacturers saw a complete stop in order flow. Not to mention, manufacturers couldn’t staff their facilities well during the immediate aftermath of the shutdown. So you had basically no demand.”
As restaurants slowly began to reopen, demand increased accordingly—but not consistently. Since March, a cyclical pattern has taken root wherein demand is high when dining rooms are open and low when restaurants close again.
To offset the surplus during periods of low demand, Davie says large distributors are appealing to grocery retailers as a possible avenue of product, while smaller distributors look to local avenues like charities. But, the biggest problem will come when demand surges to pre-COVID levels. Davie says shortages often occur because manufacturers—particularly those in livestock—can’t keep up.
“[Meat] demand has come back a lot faster than anybody really expected it to come back,” Davie says. “But because of the labor issues and the amount of staff they’re allowed to have to manufacture products, especially in the protein world, we’re seeing high prices and shortages on certain protein products.”
Manufacturers are addressing shortage issues by focusing on key items that have a higher demand. Suppliers are selling fewer specialty items, such as truffle oil, compared to unfussy favorites like french fries, which are not only popular in the restaurant, but off-premises, too.
These pivots have proved successful in Davie’s eyes, who says he’s impressed with the strength the supply industry has shown since March.
“I was really worried about our smaller supply chain partners and distributors, whether they could make it through,” Davie says, adding that those businesses sold produce boxes to offload their inventory—not unlike NORMS’ egg care packages. In fact, the special was so popular that it spurred the restaurant to develop packages for other surplus items, such as salmon and burgers.
Nevertheless, this solution was only a temporary fix; when grocery stores caught up with consumer demand, the popularity of the care packages waned, leaving the chain with the original problem of surplus. To implement a more permanent solution, NORMS mirrored the supply chain strategy of limiting its menu offerings.
The chain’s reduced menu eases the products it needs on hand at a given time and allows locations to focus on safety and sanitary practices.
“There’s a lot of things that the server was doing—making milkshakes, scooping pie, and things like that—that we figured we probably should not do until we figure all this out,” Cox says.
Unexpected supply changes have rippled into chain restaurants—even ones as small as NORMS—differently from single-location independents. In Nashville, Tennessee, Fable Lounge didn’t have a large amount of products to move when the pandemic hit. For its chef, Kraig Hansen, the biggest problem was the slowdown of products once the cocktail bar reopened.
“Six months ago, I could place an order Saturday at 9 o’clock and get a delivery Sunday by noon,” Hansen says. “That changed drastically. It’s been something where the planning part of it has to be 72 hours at a minimum.”
Hansen says communication is more important now than ever, especially in menu planning. The bar initially closed its doors in March with a spring menu planned, only to reopen with summer-focused offerings.
He says though the bar’s small menu didn’t suffer too much from supply chain disruption, Fable Lounge is preparing for future uncertainties by reducing ingredients and using local commodities whenever possible.
“[Local ingredients] give us: one, the opportunity to help out the local farmers by ordering more of their product; two, it’s readily available for us as we need it,” Hansen says. “Three, it minimizes the amount of new products and extra products we’re bringing in.”
While the return to basics seems to be a trend throughout the entire supply chain, Hansen says fewer ingredients doesn’t have to mean boring dishes. Instead, he sees an opportunity, where the challenge of fewer ingredients pushes kitchens to get creative.
“Right now, there really aren’t any food trends to follow as there would be in the past,” Hansen says. “So if anything, it’s been a testament to my chef de cuisine’s [ability] to really think outside the box.”