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PH restaurants struggle to source supply, meet demand

/ 05:24 AM June 01, 2022
Empty restaurant stock photo. STORY: PH restaurants struggle to source supply, meet demand

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MANILA, Philippines — Logistics bottlenecks and raw material shortages, exacerbated by Russia’s invasion of Ukraine, are disrupting global supply chains, affecting everything from consumer goods to car sales.

Filipino diners are the latest to bear the brunt of the ongoing crisis as popular restaurant groups struggle to meet demand, which continued to spike amid the resurgence of economic activity in the postpandemic period.

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Grilled chicken chain Mang Inasal, part of fast-food giant Jollibee Foods Corp., has made its popular chicken oil condiment available on a per-request basis due to a “supply shortage.”

Mary Grace Cafes, known for cakes and homemade rolls, also addressed the reported shortage of its best-selling ensaymadas.

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“Unfortunately, we’re experiencing some global supply issues on a few raw materials beyond our control,” the company’s management told customers last week.

No further details were provided while spokespersons from Jollibee and Mary Grace could not be immediately reached for comment.

Luis Gerardo Limlingan, managing director at Regina Capital Development, said these problems could persist as pandemic lockdowns in China, a critical transshipment hub, disrupt logistics while the Ukraine invasion cuts access to key food inputs.

“As we continue to face the geopolitical headwinds we’re currently seeing right now, the shortages are likely going to continue,” Limlingan told the Inquirer.

Higher selling prices

The supply bottlenecks have impacted local businesses differently with some weathering the crisis better by relying on more local suppliers.

The owner of a local cafe group told the Inquirer they have not experienced the same disruptions as competitors because “we source most of our products locally.”

McDonald’s Philippines advised customers as early as last month it would sell smaller-sized French fries due to logistics problems. The local branch of the Los Angeles, United States-based Randy’s Doughnuts separately announced the temporary closure of its Bonifacio Global City store in Taguig, saying “we ran out of flour.”

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“For some brands, especially the larger ones, it’s also part of their marketing. To emphasize their ingredients are sourced from a certain area,” the coffee group owner, who requested anonymity, said.

The owner admitted that while supply was available, they were forced to increase prices in recent months as raw material and transport costs had jumped significantly.

Limlingan noted that businesses could raise prices but only up to a certain point.

“It’s also mostly businesses trying to balance tighter margins against losing potential customers due to higher prices,” he said.

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TAGS: global supply chains, restaurant supply sources, Russia-Ukraine war
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