In recent weeks eggs have been top of mind for the food industry as well as consumers. What many may not think of is how it affects restaurants. Susan Quam the Executive Vice President of the Wisconsin Restaurant Association says that the impact of the egg shortage can be great on restaurants.
Egg Shortage
“The supply chain for eggs for restaurants is a little different than for grocery stores,” Explains Quam. “Not every egg facility can package for restaurants, and it is a limited number of facilities that can package for restaurants.”
Quam says that depending on where the bird flu is being found the severity of the impact of the shortage is very regional. Across the entire supply chain there is a minimum of 45% to 50% increase of egg prices within the last 12 months. When it is narrowed down to the restaurant industry, they have a nearly 200% increase in egg prices over the last 2 years.
Breakfast restaurants and bakeries are being hit the hardest by the shortages with the constant need for eggs. Having the increased price of eggs, breakfast heavy restaurants are forced to put some of the cost onto the customers. Bakeries have the option to be able to use liquid egg substitutes for some products to help mitigate price increases. The association has also seen some restaurants put deals on other products to lessen the need for eggs in their business.
Typically, eggs are sourced through large suppliers for restaurants, and they try to keep them local. Now that there is a shortage, they are being forced to expand their reach for eggs. The suppliers for Wisconsin restaurants are still keeping the eggs from the Midwest, but they may not be from the state.
Wholesale Price Increase
“Beef prices have gone up 13% year over year,” says Quam. “Wholesale pricing for restaurants are double the increase you would see in the grocery store. That is because there is a narrower line of products used in restaurants.”
Quam explains that prices for all wholesale products are being increased. These include beef, pork, poultry, cheese, and butter. Overall, the increase in the wholesale prices is 30%, which has led to restaurants needing to increase menu prices.
Labor Issues
With mass deportations taking place, the restaurant industry is feeling the impact. Many immigrants gravitate toward the industry due to being rewarded for the hard work they provide. There are many people within the industry that are worried for what may happen in the future. Another concern is the supply chain has many immigrants come to the United States to help harvest the food. If even more of that labor is cut, then prices will continue to rise exponentially for the restaurant industry.
Although there are some major hurdles the industry is facing, Quam says the industry is still growing. One reason for that is a consumer trend they are seeing where people are using carryout items from restaurants and blending it with their home cooked portions of a meal. Another trend that is helping is the increase in people using delivery services to get their food. Even though there are less people going and eating inside of restaurants, the industry continues to hold strong.
