Stretched global supply chain means shortages on summer menus

Lotte

28/06/2021 13:00

By Lisa Baertlein and Hilary Russ
    LOS ANGELES/NEW YORK, June 28 (Reuters) - In the United
States, it's iced green tea. In South Korea, it's fries.  
    At least nine fast-food chains and restaurant companies
surveyed by Reuters said some of their locations have been
grappling with changing lists of brief shortages of key
ingredients and products, as supply bottlenecks plague eateries.
    The list of hard-to-find items has included summertime
staples such as wieners and chicken wings, and non-food items
like plastic packing material and paper bags.
    On June 14 the web site of South Korea's No. 1 fast-food
chain, Lotteria, alerted customers that its eateries would
substitute cheese sticks for its popular french fries, after
snarls in ocean shipping and pandemic-related product
inspections spawned an outage. 
    French fry shipments to the burger and fried chicken chain
were delayed due to a dearth of shipping containers and longer
health-related customs checks, a spokesman for Lotteria operator
Lotte GRS  004990.KS  told Reuters. 
    Supply bottlenecks could continue "well into 2022," St.
Louis Federal Reserve President James Bullard said on Thursday,
with reopenings in the United States followed by Europe and then
emerging markets.  urn:newsml:reuters.com:*:nW1N2FT04P
    The problem is not typically a scarcity of the product
itself. Rather, networks of cargo ships, trains and trucks are
buckling under the ongoing stress from the pandemic - which also
caused facility closures and reduced labor at farms, factories
and warehouses and contributed to shortages of everything from
meat and cooking oil to plastic and glass packaging.
    Similarly, the quick ramp-up of COVID-19 vaccines unleashed
a surge in demand for meals at restaurants, ball parks and other
venues that caught food producers and suppliers off guard. 
    If restaurants run short on core products for long enough,
they "risk disappointing customers in large numbers, and that
licenses them to go somewhere else," said Barry Friends, a
partner at food industry consultant Pentallect.
    On Thursday, a Wendy's  WEN.O  franchisee in the southern
United States said he received only half of the lettuce he
ordered, while a Subway location in New York City was missing
roast beef, rotisserie chicken, ketchup and spicy mustard. Some
locations of Yum Brands Inc's  YUM.N  KFC have occasionally run
out of paper bags, one franchisee source said.  
    Darden Restaurants Inc  DRI.N , parent of Olive Garden
Italian Kitchen, on Thursday cited a "few spot outages...
related to warehouse staffing and driver shortages, not product
availability." A spokesperson declined to say what items were
temporarily missing but said the outages were at "pockets of
restaurants, not our system, and we were able to quickly
recover."
    Shortages are temporary and vary by market and store,
Starbucks said. A Starbucks in Poughkeepsie, New York, said it
had been short many different items for months, most recently
iced green tea, cinnamon dolce syrup and spinach, feta and egg
white wraps.
    "We continue to work closely with our supply chain vendors
to restock items as soon as possible," the company said in a
statement. "We recommend customers use the Starbucks app to
check item availability." 
    A Chipotle location in New Jersey was out of barbacoa and
carnitas at lunchtime on Thursday, but another nearby location
was not. The company said some spot outages could last a "a few
hours" but that its network is not having supply problems.
    Suzanne Rajczi, CEO of family-owned Ginsberg's Foods in
upstate New York, scrambled to fill orders for hot dogs,
Canadian bacon and other popular menu items as restaurants,
cafeterias and other venues reopened or expanded service with
easing COVID-19 restrictions. 
    The upheaval affected almost "every single product we sell,"
said Rajczi, who is seeing sporadic shortfalls as suppliers
catch up. 
    In the UK, the pandemic and a crackdown on immigration
following Brexit contributed to unpredictable supplies of
fruits, vegetables and prepared foods in stores and restaurant
chains, said Shane Brennan, chief executive at the Cold Chain
Federation. 
    The return of immigrant workers to their home countries
created thousands of unfilled jobs across the supply chain.
Restaurant reopenings are amplifying the impact, said Brennan,
whose group represents UK companies that move and store
refrigerated and frozen goods. 
    "We've coped with the panic-buy phase, we've coped with the
uncertainties of the lockdown. Now, we're trying to do the job
without the people," Brennan said. 

 (Additional reporting by Joyce Lee in Seoul and Joyce Philippe
in New York; Editing by Dan Grebler)
 ((lisa.baertlein@thomsonreuters.com; +1 310-491-7241; Reuters
Messaging: lisa.baertlein.thomsonreuters.com@reuters.net))