13 ways to beat weather-related supply chain challenges

13 ways to beat weather-related supply chain challenges

By Wade Winters, VP, Supply Chain, Consolidated Concepts

The California Central Valley grows 230 varieties of crops and produces two thirds of the nation’s produce. If you’ve eaten anything made with canned tomatoes, there’s a 94 percent chance that they came from the Central Valley in California. California produces 84 percent of the country’s fresh peaches, 94 percent of the fresh plums, 99 percent of the artichokes, 94 percent of the broccoli, and about half of the country’s asparagus.  Needless to say, the U.S. has a very high dependency on one particular area of the country for produce.

California is entering the fourth year of a record-breaking drought, and while generally speaking, higher temperatures promote faster growth and shorter cycles for products, too much heat can be damaging. The impact of the California drought so far may not be noticeable given all the other variables that determine food prices; however, it will be a different story if the drought continues. While the Central Valley has water reservoirs to rely on, groundwater supplies are declining. These types of lasting conditions lead to gaps in supply, poor-quality produce and higher prices — not only for restaurants in the region but also for operators around the country.

While California navigates how to best handle the drought, the U.S. grain belt is dealing with quite a different problem as heavy rainfall has impacted the wheat crop throughout the region. For example, Illinois (the second -biggest state for corn and soybeans) in June received the most rainfall it's had since 1902, which has made it impossible for farmers to get the remaining acres seeded.

And the blizzard of 2015 shut down major roads, limiting access for trucks to deliver food to the Midwest and Northeast. This record-breaking snowfall caused restaurants to close, which meant no sales, and perishable foods had to be discarded.

Weather plays a vital role in determining food costs

What this means is that weather clearly plays a vital role in determining food costs for restaurant operators, so when it comes to risk management, having contingency plans for weather-related challenges should be at the top of the list. 

Operators can pass through these unavoidable implications brought on by Mother Nature if they take the correct and necessary steps to protect themselves and their supplies. Here are some ways  to prepare and minimize the impact:

  • Create an acceptable list of substitutions for key or high-volume ingredients that are critical to your menu. Examples of this include using iceberg lettuce in place of romaine, blueberries in place of strawberries and plum tomatoes in place of layered tomatoes.
  • Identify an alternative for limited-menu options in advance in anticipation of certain products being unavailable. These can be used as limited-time offers until your original ingredients become available.
  • Pre-determine alternative sourcing for your top 20 critical items.
  • Adjust par levels and confirm the right pack size being used to minimize waste.
  • Utilize every and all local produce programs at your disposal.
  • Switch to smaller sizes where you can, as larger sizes become less available in drought situations.
  • If you can, use a frozen product in recipes that can easily accept them.
  • If you have room, plant a garden near your restaurant and capture the “grown here” flavor.
  • Look to use greenhouse type products in your menu.
  • Check your trash cans!! Yield becomes even more critical when the raw product cost goes up.
  • Maintain flexibility whenever possible on menus. Avoid specifying particular vegetables or fruits whenever possible.
  • Look at blending products where you can continue to work with your high cost staple, but combine it with a lower cost vegetable or fruit.
  • Look at alternate pack sizes that may be more cost friendly.

Nobody can truly predict what Mother Nature has up her sleeve.  By having a plan before the next natural disaster occurs you can better protect your ingredients, menu items and customer expectations.

Topics: Food Cost Management

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