Spread of pineapples
Phoenix Han | Unsplash

Pineapples are one commodity in short supply because of recent weather patterns. 

Where Supply Meets Demand for Restaurants

Restaurants should be ready to adapt to incoming changes in the commodity market.

No commodity exists in isolation. Weather changes, government intervention, and consumer demand are just a few of the forces that push supply into unpredictability. Despite these stressors, 2019 has been a relatively good year for foodstuffs pricing.

“It’s been very sporadic in terms of commodities, but overall we’re not in a bad period,” says Bruce Reinstein, a partner with consultancy Kinetic12.

Some items could still teeter toward instability. Tensions between the U.S. and China put seafood at risk of price hikes as a result of tariff increases. Restaurants that use fresh and frozen seafood from Asia may bear the brunt. Cheaper fish, like pollock, could be more common in companies that can’t afford the upsurge.

For other products—especially produce—the deficits that drive up prices have less to do with trade and more to do with uncontrollable factors like weather. Pineapple, as an example, is currently in short supply due to meteorological changes that stunted its yield. But unless it’s something as sudden as a natural disaster, manufacturers can project the impact of price changes months in advance.  

“It’s when you’re surprised that it becomes very hard for the operator,” Reinstein says.

Adapting to market changes can be difficult, especially for restaurants that rely on niche tastes. Reinstein recalls a massive hit to breakfast concepts when egg prices increased. In these situations, substitutions can be difficult because the product has no simple swap. But that doesn’t mean operators are doomed to sky-high prices—it just takes more creativity. 

“Put the eggs a bit more towards the end, so the plate will be almost full and they’ll take up less space,” Reinstein says. “You have to adapt and make sure that you’re still providing what people are used to, but you’re also providing other things.”

Adaptable infrastructure is key to withstand the effects of commodity change. Many restaurants adjust by diversifying their offerings. More flexible menus also anticipate change and allow restaurants to be more in tune with customer demand.

But no matter how nimble a restaurant may be, knowledge is key in making smart changes. Reinstein recommends signing up for a weekly report that restaurants can obtain from food distributors to stay up to date.

“That’s the advice I give everybody: Don’t think it’s going to last forever, and prepare. When you prepare, you tend to be successful,” Reinstein says.