You might be able to get that burger the next time you go out for lunch but good luck getting some of the toppings.
Restaurants are having some difficulty sourcing condiments, according to media reports and confirmation from various companies and their executives. Chains are having problems sourcing ketchup packets, pickles and even oat milk.
It’s part of a frustrating challenge with the supply chain. A surge in sales over the past month, thanks largely to stimulus checks and consumers feeling bolder about eating out, has led to high demand that is putting pressure on the manufacturers and distributors in some unexpected ways.
“The industry is seeing very favorable traffic in a very short period,” said Don Fox, CEO of Firehouse Subs, who said his chain’s same-store sales have hit record levels in recent weeks. “Logistically, supply chains were not prepared.”
At Fox’s chain, the problem is pickles. “We are going to be very tight,” he said, expecting “spot shortages, at least.”
Firehouse Subs has seen record sales in recent weeks, which is playing out across numerous chains in all sectors. The data firm Black Box Intelligence said on Wednesday that “restaurant share of stomach” is now at its post-pandemic peak. A Rabobank report recently noted that the recent federal stimulus could lift restaurant sales 20% to 30%.
That kind of demand shift has not necessarily taken restaurants off guard—many operators expected a boost in sales. But the supply chain wasn’t necessarily ready for that shift. A year ago, many products were shifted to retail after industry demand shifted from restaurants to grocers. With the pendulum swinging the other way, some products have proven difficult to find. “The impacts are massive,” said Debra Bachar, president with Blueberry Business Group. “It’s going to take some time to sort out.”
One of the bigger problems facing distributors is a lack of drivers. It was increasingly difficult for distributors and other companies to find drivers even before the pandemic. When that pandemic hit, a number of distribution companies to the restaurant space laid off drivers, Bachar said. Many of those drivers found jobs at places like Amazon. Closed driving schools cut back on a source of newly trained drivers.
“The driver shortage is definitely real,” Bachar said, calling it just one of a host of issues facing the supply chain as the restaurant industry recovers and demand shifts further.
Said one consultant who works with distributors: “The supply chain is a mess right now.”
Few restaurant companies have reported issues with major sources of supply and plenty of operators said they had supplies to meet a spike in demand. “Our dry storage and walk-ins are stock full right now,” said Eric Slaymaker, CEO of the 23-unit casual dining chain Winger’s.
To be sure, chicken wings have had their own supply issues, as post-pandemic demand intensity coupled with a natural restriction on their supply left some restaurant chains struggling to source enough wings. “There’s just a shortage of the product,” Slaymaker said. “It’s been a struggle keeping us in supply.”
The Wall Street Journal earlier this week highlighted the most common supply chain challenge right now—ketchup packets. As demand for items like ketchup shifted to single-serve packets thanks to the proliferation of takeout, supplies of the packets ran short. Multiple operators confirmed to us the challenge in sourcing ketchup packets.
That said, large chains don’t appear to have that sort of problem. McDonald’s, for instance, has not had trouble finding ketchup packets, for instance, and neither has Wendy’s.
One big company that has faced some supply shortages is Starbucks, which started testing oat milk in the Midwest in January last year, expanded it to California in June and then rolled it out nationally last month. The company soon found customer demand frequently exceeding supply, leading to spot shortages. The company is working with its supplier, Oatly, to increase supply to better meet demand for the plant-based milk.
“Customers’ response to the national launch of oat milk at Starbucks has been positive,” a company spokesperson said in a statement. “As more customers return to our stores, some customers may experience a temporary shortage of oat milk at their store.”
As for pickles, Firehouse Subs isn’t alone. Some Burger King locations have had a tough time sourcing enough pickles, largely due to COVID-related supply chain issues—a company spokesperson noted that the chain’s hand-breaded chicken sandwich, which features pickles, is still on track with its rollout. The shortage is not affecting sister chain Popeyes.
And most operators we spoke with suggested the problems were relatively minor in scope, especially when compared to other challenges at the moment—notably the availability of labor.
“If pickles are my biggest problem in April,” Fox said, “I’m golden.”