Local food and beverage businesses see easing of post-pandemic supply chain issues

From field to fork, beginning in March 2020, the COVID-19 pandemic put an unprecedented strain on the global food and beverage supply chain.

“We’d go to the stores and the shelves would be empty or we’d order something and normally it would take two weeks, but it took four months,” said Dr. George Alessandria, a professor of economics at the University of Rochester, recalling the general supply chain issues of the early pandemic. “The stories that we heard were just incredible and they were different in different industries and for different reasons.”

Reasons for the supply chain disruptions in the food and beverage industry included decreased output in food processing and manufacturing due to staff shortages and virus containment efforts, food packaging material demand, logistical disruptions, transport issues, and more.

“It has taken us about three years to get to a better place and we’re now in a pretty good place in terms of moving stuff around the world faster,” Alessandria said. “Now, when you look at all the transportation measures, stuff moves around at a good speed and a lot of companies have reasonable amounts of inventory.”

Indeed, in March 2023 the Federal Reserve Bank of New York declared that global supply chains have returned to normal after the February 2023 reading of its Global Supply Chain Pressure Index fell to -0.26, dropping the first time the since August 2019. The July 2023 reading was 0.90.

Rochester restaurateur Max Gordon sees that easing up of supply chain issues in the food and beverage space firsthand.

“Originally, immediately post-COVID, the supply chain was a mess from start to finish,” Gordon said. “We’re past that point now for the most point.”

Gordon owns and operates the Hideaway Restaurant & Catering Co., which includes the Hideaway Restaurant on Park Avenue, Bar Bantam in the Metropolitan Building downtown, the Penthouse at One East Avenue, Shalom Café at the Jewish Community Center in Brighton, and a large catering operation.

Immediately post-COVID, Gordon estimates 40% of products he ordered were not what he was originally looking for (ex. a different brand product than desired) and 80% of food products had unstable prices that sometimes changed daily.

“Now we’re pretty much back to normal in terms of being able to get the food products we want, although there are always those odds and ends that are temporarily tough to get based on what’s trending,” Gordon said. “Food prices are stable; not fluctuating daily, but they are relatively astronomically higher than before the pandemic.”

Gordon still experiences some supply chain backlog when it comes to restaurant service items and equipment, such as walk-in coolers.

“I’ve ordered chafing dishes from more sources in the last two years than I’ve ever had,” said Gordon. “And most of my equipment at this point is Frankenstein-like.”

The National Restaurant Association’s State of the U.S. Restaurant Industry 2023 found that, like Gordon, three out of four restaurant operators surveyed feel business conditions are close to normal, however, 92% feel the cost of food is now a significant issue for their restaurant.

When it comes to supply chain issues in the food manufacturing and processing space, things have also normalized considerably, but challenges remain.

“The biggest impact we’re still facing as a company is longer lead times and some pricing inflation,” says Grant Perry, senior director of forecasting, planning, and order to cash, for Nortera Foods (formerly Bonduelle).

Nortera — a North American leader in the processing of canned and frozen vegetables — prepares vegetables for its own brands (Del Monte in Canada and Arctic Gardens) as well as a wide range of private labels for retail clients and food services customers like restaurant supply companies.

The company has 13 processing plants in Canada and the United States, including sites locally in Brockport, Bergen, and Oakfield. These WNY sites process and package 150 million pounds of frozen vegetables like peas, beans, corn and carrots annually, according to Perry.

“There’s a piece of our business where we were insulated from some of the supply chain difficulties that surrounded everybody else, based on the fact that we primarily control a significant portion of our own supply chain,” Perry said. “We were able to control some of our destiny better than maybe other companies who didn’t have their own vertical integration.”

During the pandemic, Nortera did face some difficulties with container delays and costs, but it was relatively minor since less than 5% of its business comes from outside North America, said Perry, who noted the company coped by having a longer time horizon for planning activities.

Gordon — the restauranteur — coped with his supply chain challenges during the pandemic with creativity, whether it was via flexibility in his restaurants’ menus or fixing broken equipment he couldn’t get replacement parts for internally.

As recently as November 2022, 82% of full-service restaurant owners surveyed by the National Restaurant Association had recently changed their menus because of food or beverage supply delays or shortages.

While supply chain disruptions throughout history have come with many challenges, a silver lining, according to Alessandria, is how businesses and individuals find workarounds, like Nortera and Gordon did.

“The amazing thing is just how creative people are,” Alessandria said. “They figure things out.”

Caurie Putnam is a Rochester-area freelance writer.