Is your restaurant’s supply chain prepared and resilient?
Even more than two years into the pandemic, operators need to be nimble to deal with the next crisis.
One of the big lessons from the COVID crisis is that food companies need to proactively ensure that their suppliers throughout the supply chain are prepared and resilient. We saw with our own eyes what happened when the world was not prepared for a global crisis, and we were shocked by product shortages, supply chain disruptions and rising prices.
Now that we have been through a global pandemic, we face a perfect storm of crises that are negatively impacting our food supply:
Climate change is drying up the Colorado River and Lake Mead – the main sources of water for food crops in Arizona and California – and they could soon run out of water. California generally produces an abundance of produce, but extreme drought conditions make regular cultivation difficult and will have a significant impact on these crops. Meanwhile, the Midwest faces the opposite problem, with frequent flooding washing away topsoil needed to grow corn. Given that the Midwest produces about three-quarters of the country’s corn supply, this is a major concern.
The Ukraine/Russia conflict means an additional 47 million people are likely to face acute food insecurity this year. Before the war, Ukraine exported 6 million tons of agricultural products (including cereals) monthly to the Middle East, Asia and Africa. Today, they export only 15 to 20%.
The Dutch agricultural sector is disrupted by a radical reduction of 30% in the number of head of cattle. Their government made this decision to achieve environmental goals. As a result, one in three Dutch farms could close.
Ongoing labor shortages are causing problems throughout the supply chain, including farms, packing houses, distribution, etc. Since many fresh foods are perishable, any delays or interruptions can lead to spoilage and waste. Crates of meat, dairy, fruits and vegetables are left to rot in shipping containers, warehouses and trucks because there aren’t enough workers to get them to their final destinations.
Therefore, food brands would be advised to:
Use technology tools to manage your supply chain. Today’s digital solutions allow you to audit and assess the sustainability and resilience of your supply chain. It’s essential to use innovative tools to better control your supply chain, organizing supplier certifications in a system you can see and manage.
Determine your suppliers’ backup plans. Ask your suppliers how they are preparing for climate change and other conflicts. What are their contingency plans for the western water crisis and the Midwest floods? If your suppliers haven’t started considering other options, that’s a red flag.
Rely on suppliers closer to you. As we have seen, the Ukraine/Russia conflict is disrupting grain exports, which has an impact on the world’s food supply. And a decline in California and Midwestern corn crops will negatively impact food supplies in many states. It’s a good time to rely on local farms – or grow your own produce – to ensure a continuous supply of fresh food.
Consider alternative options. Increasingly, companies are looking for alternatives like vertical farming, which pushes crops closer to their final destinations. Growing food closer to where it’s needed helps reduce food deserts, reduce safety and quality risks, and minimize food waste. In addition, vertical farms are usually temperature-controlled indoor spaces, which protect crops from bad weather, such as droughts, extreme temperatures, floods, etc.
Reduce food waste. There’s no sign of food prices stabilizing anytime soon, so cut down on waste and make every food count. Technology tools can help you implement programs to minimize food waste, make inventory more efficient, and provide predictive ordering and historical sales patterns so you can make more informed purchasing decisions.
Adjust your menu. Last year, 75% of restaurateurs changed their menus due to supply chain disruptions. If you’re always making complicated dishes or offering full menus, you’re probably overspending on food. Instead, streamline your menu. Go for cheaper products that can be used in multiple ways. Switch to cheaper cuts of meat. Offer more plant-based meals to reduce costs.
Be proactive. We didn’t know it at the time, but the 2020 toilet paper shortage was a sign of future supply issues. In hindsight, we should have been more proactive during the COVID crisis, developing contingency plans for the huge supply chain disruptions that were heading our way. At the time, we did not foresee the huge ramifications of a disrupted supply chain and did not understand the importance of having a backup plan in place. Today we have a more realistic perspective. We have to prepare now for future food disruptions by making continued efforts towards sustainability and resilience, finding alternative food sources and embracing a circular supply chain.
Focus on what you can control. As a restaurateur, you have no control over the weather or wars abroad, but it are things under your control. Prioritize waste reduction. Adjust your menu to feature local and affordable ingredients. Finding new suppliers. Stay up to date with industry trends and current events. And use technology tools to streamline operations and make important tasks more efficient and accurate.
It would have been nice to have smooth sailing after the disruptive few years of the COVID pandemic, but our industry continues to navigate huge curves. Now we know we need to be resilient, prepared and agile to face the next crisis.