Capital Gain

Restaurants Struggle With Supply Strains

Published: in FINTECH by .


Diners are flocking to U.S. restaurants as COVID restrictions ease, putting a strain on the supply of both food and labor.

As The Wall Street Journal reported Friday (May 21), distributors are facing shortages of “everyday products like chicken parts,” while also struggling to find workers and meet rising transport costs.

“Over the last six weeks, we have seen the market come roaring back faster than anybody would have anticipated,” Mark Allen, chief executive of the International Foodservice Distributors Association, told the Journal. “The start-up has been, in many ways, as difficult as the shutdown … Everybody is trying to turn it on immediately and the capacity might not be there.”

Kerry Byrne, whose Total Quality Logistics LLC serves a number of food-processors and distributors, says a dearth of raw materials has led to unpredictable deliveries, stressing the entire supply chain.

Supply-chain experts are calling it a “bullwhip effect,” as companies that earlier pulled back operations are now looking to scale back up quickly, per the news outlet.

When the pandemic began, food suppliers allocated more capacity to the retail side of their business. Allen told the Journal that leaves distributors scrambling to find products as restaurants and institutional food-service companies reopen.

There’s also been a shift in demand. The restaurants that remained open during the pandemic pared down their menus, swapping fresh ingredients for prepackaged fare for takeout and delivery. And manufacturers changed their offerings as well, offering fewer varieties or — in the case of meat processors — cutting back on production to adhere to COVID safety rules.

New research indicates that there is a huge amount of pent-up demand for experiences outside the house. A PYMNTS survey of over 2,000 consumers, 57.1 percent said they were extremely interested in venturing out more often.

For more on what dining might look like on a post-COVID landscape, read our Restaurant Roundup from earlier this month.

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NEW PYMNTS DATA: CRYPTOCURRENCY PAYMENTS STUDY – MAY 2021

About The Study: U.S. consumers see cryptocurrency as more than just a store of value: 46 million plan say they plan to use it to make payments for everything from financial services to groceries. In the Cryptocurrency Payments Report, PYMNTS surveys 8,008 cryptocurrency users and nonusers in the U.S. to examine the ways in which they plan to use crypto to make purchases, what crypto they plan to use — and how merchant acceptance can influence merchant choice and consumer spend.







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