Business

Supply crunch: Limited fries, ensaymadas, donuts, etc.

EYES WIDE OPEN - Iris Gonzales - The Philippine Star

June 1, 2022 | 12:00am

Don’t be surprised if you order your favorite dishes in your favorite restaurants and the waiter tells you they’re not available, at least for now.

The global supply disruption due to COVID-19 restrictions in China, the still lingering war between Russia and Ukraine, and freight problems is real.

McDonald’s Philippines, for instance, gave this advisory: McDonald’s Philippines continues to serve fries, but at a limited capacity.

“Our medium and large fries sizes remain temporarily unavailable due to the ongoing global freight crisis. By serving the small size of fries across all channels and the BFF fries only for delivery starting June 1, we are able to better manage our supply to ensure customers still get to enjoy our fries.”

Mary Grace, the restaurant and pastry shop, likewise said it is feeling the impact of the supply chain problems. Its famous mouth-watering ensaymada is not available.

“You may be having difficulty getting your hands on a box or two of your favorite Mary Grace Ensaymadas. Unfortunately, we’re experiencing some global supply issues on a few raw materials beyond our control. As we are committed to using only the best, high quality ingredients, do know that we will never compromise our products and we’re hoping to resolve this issue soon.”

Randy’s Donuts in BGC also apologized to its customers, saying, “Sorry we ran out of floor before we ran out of queues.”

Even Mang Inasal, which belongs to global food giant Jollibee Foods Corp., announced recently it would be serving its much-loved chicken oil on a per-request basis only due to the supply shortage.

Eric Teng, president of the Restaurant Owners of the Philippines (RestoPH), said in published interviews with One News and BusinessWorld that food production here and abroad has indeed been affected by supply chain disruptions worldwide.

Domestic rice production, for instance, has been affected by lack of fertilizer, a lot of which comes from Ukraine and Russia, Teng said.

Thus, he said, some restaurants are also facing delays in the delivery of raw materials and produce used in their operations.

This, of course, is in addition to the surging fuel costs.

As a result, he said some restaurants have already increased prices, while others are still trying to absorb some of the rising costs, he said.

Note that the restaurant business was one of those affected by the COVID-19 pandemic and many of the operators are still trying to recover from the hard times.

Food security

To be able to dine in restaurants is a privilege. It would be scary to see the shortage problem spill over to more essential items such as medicines, rice, and other basic goods.

Henry Soesanto, Monde Nissin CEO, said in a recent virtual chat that food security is the next real crisis we will face. Food prices are already going up, he said.

“The price of wheat is going up. The price of rice is going up.”

Trade Secretary Ramon Lopez, for his part, said in the BusinessWorld report that the government has been making efforts to link local producers and restaurants to encourage more local input and farm-to-table value chain models, even before the pandemic.

‘One crisis after another’

It’s one crisis after another, says casino and global ports tycoon Enrique Razon.

Razon’s global ports operator International Container Terminal Services Inc., which has been performing well despite the challenges, is mindful of the new headwinds.

“Just as the pandemic seems to be waning so far, new challenges emerge as war clouds engulf Europe with the Russian invasion of Ukraine. We seem to be in a global cycle of one crisis after another. Although the war is mainly a European affair, we can all expect to feel the impact globally in terms of the global economy, stability, and security,” Razon said during the company’s annual stockholders meeting in April.

This, indeed, should be the mindset of companies and the government. Even if the pandemic ends, the world will have to endure another crisis. Companies need to look closely at their supply chains and assess the risks throughout. It would also be risky to raise prices with consumers also still recovering from the impact of the pandemic. They would need to invest more and find new suppliers.

These are just some of the dizzying problems that the incoming administration of Ferdinand Marcos Jr. will be facing. For sure, it’s not going to be easy and there is an urgency to hit the ground running.