Global supply chain bottlenecks could continue “well into 2022”

Global supply chain bottlenecks could continue to impact foodservice sector “well into 2022”

Global supply chain bottlenecks could continue to impact foodservice sector “well into 2022”

Foodservice companies around the world are experiencing brief shortages of key products and ingredients, caused by supply chain delays that will likely be around for a while.

Supply bottlenecks could continue “well into 2022,” St. Louis Federal Reserve President James Bullard told Reuters on Thursday, with reopenings in the United States followed by Europe and then emerging markets.

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, ballparks 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 franchisee in the southern United States said it 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 KFC have occasionally run out of paper bags, one franchisee source said.

Darden Restaurants Inc, 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.”

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.

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