COVID-19: Industry Update

As we all continue to navigate the impact of the COVID-19 pandemic on the foodservice industry, we wanted to share some key updates with you regarding the supply chain and its effects on our inventory. A majority of these issues are being felt throughout the industry and we are hopeful that the national supply chain will continue to stabilize as time goes on.

We appreciate your understanding and your patience as we work closely with our industry suppliers to resolve any issues and we will update you with relevant and timely information as it becomes available to us. Please reference the below information for general industry news, as well as product-related updates and our recommendations for potential solutions.

As always, please reach out to your dedicated Renzi Sales Consultant to discuss your specific needs and our team will do our very best to come up with an appropriate solution for you. The Renzi Foodservice team is here as your local partner to help navigate through these times – and we appreciate you placing your continued trust in us.

General Industry News

Raw Material vs. Production

Although some product shortages have been caused by a shortage in raw material, most shortages seem to be occurring due to production challenges. These challenges include: facilities operating with a limited staff, a decrease in production percentages due to COVID-19 safety guidelines and the need for proper spacing of production lines, and an increase in staff call outs which results in production limitations.

Focus on Retail Items

Since the beginning of the pandemic, the way in which consumers are buying products has been changing. For months, the industry saw a quick and steady transition of consumers buying less at restaurants and more at retail grocery stores. Using the same or minimized production/warehouse space, many suppliers had to shift their production focus from foodservice items to retail items. This resulted in decreased production on many foodservice items. As we continue to see more restaurants open back up and consumers start shifting back toward previous buying patterns, we will start to see more focus placed on the production of foodservice items, resulting in more product availability.

Transportation & Freight

Transportation costs and load volume continue to soar and we anticipate this trend continuing into 2021. With the country slowly opening back up, there is an overwhelming demand for trucks to move shipments and it has created incredible challenges for the entire freight industry. Companies are paying top dollar to make sure their shipments are taken care of, resulting in a bidding war amongst transportation carriers. Due to the high demand, there has been an unprecedented amount of dropped loads and rate increases by carriers shifting over to higher paying shipments at the last minute.

Our logistics and purchasing teams are working diligently to manage these freight challenges on a daily basis in an effort to mitigate the impact on our expected shipments and to ensure we are receiving product in a timely manner. To reiterate, the unpredictability of the freight market is expected to continue into 2021 and we will continue expending all efforts to minimize the impact of this on our supply and inventory.

Product News & Recommendations

New Updates (as of 10/23/20)

Produce

Current Status

The wildfires on the West coast have been largely controlled and are no longer the main cause of concern for produce production and quality. However, we have seen higher than normal temperatures the past two weeks which have caused some of the same issues we were experiencing due to the fires (products with discoloration, smaller / less firm than usual). We anticipate temperatures returning back to seasonal averages next week. Product that was coming out of the Salinas Valley is now coming out of Huron, CA, which should bring quality back to expectations, especially in the lettuce category. We have also seen quality improving with berries, broccoli and cauliflower.

To view the latest info on the produce market, click here to read the Pro-Act quality report.

Renzi Recommendations

Please be aware that you may receive lighter cases than you are used to receiving, as some suppliers are peeling down lettuce to remove damaged leaves. Lettuce may be smaller and more pale in color. To make your salads or sandwiches a little more attractive, consider adding some local New York State organic produce from Agbotic Farms – we offer baby arugula, baby kale or beet greens that can be mixed in. Be sure to keep lettuce cold and always rotate inventory.

We are currently stocking local New York State acorn squash and butternut squash that could be roasted or pureed for a lovely seasonal side. Local apples are also great to feature on your menu right now – either as an added touch in your fresh salads or try them roasted for a sweet or savory side dish.

To-Go Containers

Current Status

Suppliers in this category are experiencing labor shortages, resulting in reduced production capacities. Strong demand due to the increase in businesses offering takeout and delivery is adding to the strain on inventories. Suppliers who provide items made from aluminum are reporting an increase in material costs of 18% since early July, which will also impact pricing on these items in the future. In addition to foil, cardboard is also seeing unprecedented demand which is resulting in reduced inventories. This, in turn, is driving up material costs by approximately 8-10%. All products produced from cardboard will experience price increases in the very near future as manufacturers are just now starting to implement them.

Renzi Recommendations

We stock a variety of takeout options produced from various materials, such as paper, foam, sugarcane, plant fiber and plastic. When necessary, we recommend considering the switch to other to-go options based on your specific needs.

Pork

Current Status

The industry is continuing to see shortages throughout the pork category with ham, bacon, pepperoni, and salami. This is a production issue, not a raw material issue, as labor and staffing continue to be huge factor in production rates. Products that typically require a smaller pig are less available, as the average size of the pig has been higher than in the past. This is due to production rates slowing down and the average age/size of the pigs increasing at time of processing. We anticipate this starting to level out over the next few weeks as we head into the holiday season.

Renzi Recommendations

For deli applications, we recommend shifting to or increasing focus on turkey, chicken, roast beef, pastrami, corned beef, franks and bologna options.

For pizza applications, we can provide non pork-based sausage, meatballs, chicken, turkey pepperoni, and non-meat applications like alternative cheese blends, seafood, pineapple, mushrooms, olives, tomatoes, garlic, broccoli, spinach, fresh herbs, onions and peppers. We recommend increasing promotions around pizza options that do not include pork products to help shift consumer preferences until the market stabilizes.

For pepperoni, we suggest maximizing your inventory by reducing portion sizes or increasing flexibility with slices per ounce.

Cheese

Current Status

Pricing throughout the cheese market has shown significant increases, largely due to the nationwide USDA Farms to Families Food Box Program and due to decreased cheese production in August. This will potentially continue through the end of the year.

Recommendations

Proper portion control is imperative to ensure all cheese is being measured and used most efficiently. If necessary, operators can also consider price increases on menu items that are most impacted.

Previous Updates (as of 9/25/20)

Pork

Current Status

The industry is continuing to see shortages throughout the pork category with ham, bacon, pepperoni, and salami. This is a production issue, not a raw material issue, as labor and staffing continue to be huge factor in production rates. Products that typically require a smaller pig are less available, as the average size of the pig has been higher than in the past. This is due to production rates slowing down and the average age/size of the pigs increasing at time of processing. We anticipate this starting to level out over the next couple of weeks toward the end of October.

Renzi Recommendations

For deli applications, we recommend shifting to or increasing focus on turkey, chicken, roast beef, pastrami, corned beef, franks and bologna options.

For pizza applications, we can provide non pork-based sausage, meatballs, chicken, turkey pepperoni, and non-meat applications like alternative cheese blends, seafood, pineapple, mushrooms, olives, tomatoes, garlic, broccoli, spinach, fresh herbs, onions and peppers. We recommend increasing promotions around pizza options that do not include pork products to help shift consumer preferences until the market stabilizes.

For pepperoni, we suggest maximizing your inventory by reducing portion sizes or increasing flexibility with slices per ounce.

Butter Blends

Current Status

There are continued shortages in the butter blends market due to production challenges, as well as an increased focus on retail. As more consumers shifted to buying groceries and cooking at home vs. going out to eat, suppliers were forced to place more of a focus and use their production floors on retail applications. This has resulted in a decreased availability of these products on the foodservice side. There is not a current ETA on when this market will stabilize.

Renzi Recommendations

For on-the-table applications, consider switching to 100% butter or margarine portion control options. For cooking applications, you can substitute different cooking oils or incorporate a portion of real butter mixed with cooking oils to replace butter blends.

Sauces & Dressings

Current Status

The industry is facing shortages with many different sauces, dressings, and condiments. This is caused by production limitations due to labor and staffing, as well as an increased focus on retail applications and single use / portion control products for takeout and delivery. We anticipate limited supplies of portion control pack sizes through November.

Renzi Recommendations

Consider portion your own sauces and dressings using souffle cups. If considering making homemade sauces and dressings, we do carry a varied supply of oils, vinegars, mustards, mayonnaise, tomato products, spices and herbs.

Cleaning Supplies

Current Status

Disinfectant wipes and spray products both remain in short supply. At the beginning of the pandemic, sales of aerosol disinfectants jumped nearly 350% and multipurpose cleaners nearly 170% compared to the prior year. Demand remains extremely high. This unexpected demand, along with global supply chain issues and labor challenges, are making it essentially impossible for companies to get inventory levels back in place.

Renzi Recommendations

We have several disinfecting/sanitizing wipes and surface cleaners in stock, although availability may fluctuate. Please click here to view our Cleaning & Sanitation Essentials flyer, which outlines some of our available offerings.

Disposable Gloves

Current Status

The industry will continue to face challenges with disposable gloves through the rest of this year and it is projected to continue well into the second quarter of 2021. There are quite a few contributing factors to the slow recovery of this market, including: 95% of global vinyl gloves are produced in China, where factories were closed for at least 60 days and in some cases longer. When they restarted, global demand was at an all-time high; however, the Chinese government began purchasing vinyl gloves for domestic use, limiting the amount available for exports to other countries. Nitrile and latex gloves are primarily produced in Malaysia, Thailand, and Indonesia. Factory closures, coupled with raw material and packing shortages, are causing slow recoveries of inventories. These governments are also requiring that domestic demand be satisfied before allowing exports to other countries.

Renzi Recommendations

It may be necessary to switch back and forth between various glove materials depending on the inventory available at any given time. If you typically use latex or nitrile glove options, you may need to consider shifting to poly gloves, and vice versa.

We also recommend rationing your existing supply of gloves to help maximize inventory, and only use when necessary. According to ServSafe guidelines, gloves are needed when handling ready-to-eat foods and when disposing of trash. Gloves are not required when washing produce or when handling raw meat or other food products that will ultimately be cooked, as long as staff are following proper handwashing techniques. Staff should be washing hands before applying gloves and again once they are removed. For the most up-to-date information on recommended safety guidelines from ServSafe and the CDC, please click here to visit our Restaurant: Revival webpage here.

To-Go Containers

Current Status

Suppliers in this category are experiencing labor shortages, resulting in reduced production capacities. In addition, strong demand due to the increase in businesses offering takeout and delivery is adding to the strain on inventories. Suppliers who provide items made from aluminum are reporting an increase in material costs of 18% since early July, which will also impact pricing on these items in the future.

Renzi Recommendations

We stock a variety of takeout options produced from various materials, such as cardboard, paper, foam, sugarcane, plant fiber and plastic. When necessary, we recommend considering the switch to other to-go options based on your specific needs.

Frozen Fruits & Vegetables

Current Status

The frozen fruits and vegetables category, like many others, is being impacted by labor shortages in the fields, factories and trucks that deliver the product. Increased demand from COVID-19 has also resulted in lower or exhausted inventories prior to new harvest arrivals. Suppliers are optimistic that the incoming supply of most frozen fruits and vegetables will be sufficient to replenish inventories, with the exception of wild blueberries, strawberries and peas. Due to recent poor harvest results, costs of these items will see a significant increase in the coming months.

Renzi Recommendations

We do stock multiple pack sizes of frozen fruits and vegetables – depending on the supply at any given time, you may need to consider using a different pack size until par levels are replenished. For mixed vegetable applications, if you are typically mixing your own – consider incorporating a pre-mixed vegetable blend. For blueberries, if using for muffins, breads or cookies – consider our pre-made muffin batters, individually wrapped or bulk pack baked muffins, and pre-made cookie dough. We also stock a blueberry filling for pies or tarts, pre-made pies (baked and unbaked), and a ready-to-bake blueberry scone. For strawberry alternatives, we offer a pre-made strawberry rhubarb pie, as well as strawberry topping.

Dispenser Beverages

Current Status

Labor shortages in this category are resulting in capacity issues and extended lead times, which in turn are causing late deliveries. In an effort to run production as efficient as possible during the pandemic, beverage suppliers are opting to evaluate usages of all products and produce those items with the highest demand. This unfortunately impacts the availability of other items, which can result in outs.

Renzi Recommendations

As our team continues to work to bring in all stocked items, there may be times when it would be appropriate to consider an alternative beverage flavor until we are able to get the correct item back in inventory.

Produce

Current Status

Over the last several weeks, we have seen wildfires and heat waves engulf the western United States which has resulted in many challenges across the produce category. The industry at large is seeing burn damage/discoloration on many products, including lettuce, kale, spinach, broccoli, and cauliflower. Berries are also being impacted by the heat. The limited supply of product coming in has been smaller and less firm than our typical quality expectations.

To view the latest info on the produce market, click here to read the Pro-Act quality report.

Renzi Recommendations

Please be aware that you may receive lighter cases than you are used to receiving, as some suppliers are peeling down lettuce to remove damaged leaves. Lettuce may be smaller and more pale in color. To make your salads or sandwiches a little more attractive, consider adding some local New York State organic produce from Agbotic Farms – we offer baby arugula, baby kale or beet greens that can be mixed in. Be sure to keep lettuce cold and always rotate inventory.

Consider shifting broccoli and cauliflower off your menu until the quality of supply returns, and swap with local seasonal produce. We are currently stocking local New York State acorn squash and butternut squash that could be roasted or pureed for a lovely seasonal side. Local apples are also great to feature on your menu right now – either as an added touch in your fresh salads or try them roasted for a sweet or savory side dish.

Cheese

Current Status

Pricing throughout the cheese market has shown significant increases, largely due to the nationwide USDA Farms to Families Food Box Program. This is likely to continue through the end of October and potentially through the end of the year.

Recommendations

Proper portion control is imperative to ensure all cheese is being measured and used most efficiently. If necessary, operators can also consider price increases on menu items that are most impacted.