Restaurant Supply Shortage Pervades All Areas

June 25, 2021

Photo by Edward Eyer from Pexels

The ongoing chicken wing shortage has dominated the news, but other supplies are becoming scarcer too. Now, supply shortages are just another problem thrown in the way of businesses as they reopen and struggle to return to full-capacity without key menu and service items. Covid-19’s disruption of supply chains and production created this crisis, but now the sheer volume of restaurants recommencing operations, opening for the first time, or expanding has made the demand even harder to control. The problem is two-fold: both raw materials and workers are missing. Whereas some supplies had already been difficult to get, the combination of the pandemic and mass reopenings has made a wide range of goods unobtainable all in the same period of time – a dangerous reality. 

Restaurants have come up with different ways of dealing with this situation, whether it be taking signature dishes off the menu or settling for buying from other brands. Some have even turned to importing key pieces, such as furniture or dishware, because prices have remained low elsewhere. But the issue is that this shortage affects suppliers too. 

Take beef for example. 

Restaurant demand is extremely high for beef, and business owners are paying the price at a near 40% increase, yet small-scale producers are not reaping the benefits of this supposed demand surge. This is reportedly due to suspected collusion between massive companies, such as Tyson Foods and Cargill, who are increasing the price of beef by limiting supply. Although this suspicion has resulted in a number of lawsuits between small and medium-level producers and the industry, profits are still dwindling. As beef processing plants shut down, packaging plants faced massive Covid-19 outbreaks, and feedlot operators engaged in backdoor deals instead of traditional auctions, the industry has been attacked at all angles. And now, restaurants are faced with either increasing prices to ridiculous levels or simply taking beef off the menu altogether – neither of which are suitable in this era of recovery and reopening. 

Founded by attorneys Andreas Koutsoudakis and Michael Iakovou, KI Legal focuses on guiding companies and businesses throughout the entire legal spectrum as it relates to their business including day-to-day operations and compliance, litigation and transactional matters.

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