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Hurricane Season: Will your supply chain be impacted?

With the world watching Hurricane Dorian’s path along the Southeastern seaboard, restaurant operators are bracing for a storm of their own. In the world of food costs, Mother Nature is often the one x-factor that no one can control.

While commodity experts have projections on what they think will happen with crops each year, nothing can put a wrench in those plans quite like drought, floods, hurricane’s, freezes, or any other natural disaster.

So, when it comes to risk management, having a contingency plan for weather-related challenges should be top of mind, especially now. Citrus crops, avocados and anything else that grows in moderate temperate climates, specifically in Florida, are at risk. However, operators can pass through these unavoidable implications if they take the necessary steps to protect themselves and their supplies. Here are some ways to prepare and minimize the impact:

citrus
  1. Create an acceptable list of substitutions for key / high volume ingredients that are critical to your menu. Examples of this include using blueberries in place of strawberries, plum tomatoes in place of layered tomatoes, and citrus grown in other markets.
  2. Identify an alternative / limited menu in anticipation of certain products being unavailable. These can be used as limited-time offers until your original ingredients become available.
  3. Pre-determine alternative sourcing for your top five to 10 critical items.
  4. Adjust par levels and confirm the right pack size being used to minimize waste.
  5. Utilize every and all local produce programs at your disposal.  The window of opportunity may be limited so work with your produce supplier to determine best opportunities.
  6. If you can, use a frozen product in recipes that can easily accept them.
  7. If you have room, plant a small garden inside your restaurant and capture the “grown here” flavor. While it may take some time for these plants to grow, you can always buy something that has a crop readily available.
  8. Look to use greenhouse type products in your menu. This can definitely be done where herbs or other hybrid varieties of produce can be found.
  9. Maintain flexibility whenever possible on menus. Avoid specifying particular vegetables or fruits whenever possible.
  10. Look at alternate pack sizes that may be more cost friendly.

Nobody can truly predict what Mother Nature has up her sleeve. But by having a plan before the next natural disaster occurs you can better protect your ingredients, menu items and customer expectations. In regard to Hurricane Dorian now, have an alternative plan of action so your menu items and customer base have little cause for concern.

Supply Versus Demand: Popeyes’ Chicken Dilemma & What Should Restaurant Owners Take Away

It appears that Americans will long remember—at least until the next hot topic makes the headlines—the war that erupted as the 2019 summer season winded down. It was a war that resulted in exhaustion for some, irritation for others and, as most wars are prone to do, great wealth for big business followed by tragedy. Yes, you guessed it, we are referring to the “Chicken Sandwich War.”

It started with a tweet. On August 12, Popeyes announced via Twitter that their long-awaited buttermilk-battered chicken breast sandwich on a brioche bun was on the menu. Their rivals, namely Chick-fil-A, Wendy’s, and Shake Shack, felt the first rumblings and knew their market share was at risk.  

Chick-fil-A responded with a tweet of their own which, of course led to another tweet by Popeyes—and the war had begun. Suddenly, according to Google Trends, Google searches for “Popeyes chicken sandwich” grew almost 1000 percent. Wow.

Millions of Dollars in Free Advertising

According to Forbes and Apex Marketing Group, Popeyes would have had to pay an equivalent of $65 million dollars in marketing for the attention it received. Not bad. Restaurants reported selling over a thousand chicken sandwiches in a day—with long lines and irritated customers creating havoc.

Just two weeks later, on August 27, the fatal announcement was made: Popeyes had run out of chicken for their newly claimed-to-fame chicken sandwich. Really? Just how did this extraordinary demand lead to a supply chain crisis? And is this a sign of the times when social media gone viral can disrupt the best laid plans? Originally, Popeyes believed their chicken inventory would last until the end of September, instead, they went through two months of chicken breasts in just two weeks.

In typical supply-versus-demand economics, someone even tried to sell a Popeyes’ chicken sandwich on eBay for $7,000. Only in America.

Disrupted Supply Chains

Mind you, supply-chain tragedies are a worldwide phenomenon. In February of 2018, the United Kingdom experienced the closure of 600 branches of Kentucky Fried Chicken due to a chicken shortage. According to The Sun, KFC’s new supplier, delivery giant DHL, faced challenges getting fresh chicken out to the 900 restaurants across the country.

Recently, when KFC tested a plant-based version of their fried chicken—Beyond Fried Chicken—at a location in Atlanta, they sold out in just five hours.

So, one wonders, just who was supplying the 2,400 Popeyes’ locations across the country with their chicken? (Currently, Popeyes is not divulging that information). And, why is there a shortage when the U.S. is expected to process a record 43.3 billion pounds of this poultry in 2019?

It comes down to the specifications of a certain product. Restaurant chains, particularly fast-food enterprises, don’t head to the big conglomerates, such as Tyson, and buy up massive chicken breasts. Their products are often made for quick turnaround and include breading, seasonings, or a specific size that requires additional processing.

Unfortunately, as Popeyes works out their supply dilemma and searches for new chicken suppliers, time is slipping away. As any in the marketing industry know, businesses need to ride the wave of viral fame when it comes their way. For now, McDonald’s is scrambling to create a chicken sandwich worthy of getting in the competitive game, while still maintaining quick service times, and Chick-fil-A and Wendy’s are still selling chicken sandwiches.

If nothing else, the war of the season reminds those in the industry the importance of streamlining their supply chain and developing their social media strategy. And then being prepared for the resulting avalanche of success should the nation take notice.

Consolidated Concepts helps multi-unit restaurants manage their supply chain and distribution agreements, including negotiating custom contracts for LTOs and specialty menu items. Discover how Consolidated Concepts can reduce costs while increasing operational efficiency and improving revenue.