Fries, chicken fingers, onion rings, and if you ask some people, eggs, across the nation are arriving to doorsteps without their popular counterpart: ketchup.
Over the past few weeks, the shortage of ketchup, specifically ketchup packets, has started becoming a noticeable problem. The shortage started last summer, but restaurant owners and restaurant goers have recently noticed this tabletop staple in short supply.
Concerns about ketchup shortages seem small in comparison to other problems of the world. Many restaurant owners and managers feel crazy being concerned with a lack of ketchup. After all, we are talking about ketchup here, which doesn’t seem like a crisis of humanity, but it shows the truth about a bigger problem: supply chain issues.
The problem is specifically about ketchup packets that come with to-go orders. Starting in March 2020, suddenly restaurants across the nation were packing up entrees, side dishes, appetizers, and beverages. The customer who arrived for curbside pickup, or used increasingly popular apps like Door Dash and Grub Hub, expected condiments.
To-go condiments saw an increase as traditional restaurants entered into more direct competition with fast food restaurants, that had also shut down their dining rooms, increasing their to-go business and thus, their need for ketchup packets.
Ketchup packets are convenient for increased pickup and delivery orders and are a sanitary alternative to serve-yourself-ketchup, adding yet another aspect of increased demand during a socially distanced, hands-off, time-period.
As supply has gone down, demand and prices have gone up. With ketchup packets being in such short supply, many restaurant owners are resorting to buying bulk generic ketchup to distribute in individual cups. Ketchup packet prices are up 13% since January 2020. Heinz, the largest ketchup manufacturer in the world, recently announced a “25% increase in production, totaling 12 billion ketchup packets…a year.”
This shortage problem is a direct result of production and the inability to predict demand and supply.
Everything is Connected
“Ketchup manufacturers are in quandary, and therefore have been slow to react,” said Rob Fink, Surgere’s Chief Strategy Officer. “The need to change the way in which ketchup is bottled or packaged will last only as long as the pandemic, which has an uncertain end. That said, does it make sense to invest in changes at bottling and packaging plants only to need to reverse course again when the pandemic is over? We have learned that ketchup consumption will be a constant, but the consumption method can be severely impacted by global events like the current pandemic.”
While these events occur because of unforeseen issues, they are exasperated by specific problems like the Suez Canal and winter storms in Texas. Everything is connected. Issues here or there can cause delays and increase prices for the customer.
What we are seeing, and ketchup lovers are experiencing, are side effects of the bullwhip effect. At the start of the pandemic, many restaurants expected a reduction in total overall orders, even though to-go orders were increasing. With that expectation, ketchup orders decreased. Now that the economy is coming back, there is no way to instantly snap back into regular (and increased) production and supply. On top of that, transportation problems and clogged ports are contributing to delays.
Surgere has supply chain solutions that would be able to reduce the amount of time ketchup is in shortage. While we can’t make condiments appear out of thin air and land into the bags of fries longing for their other half, we do have solutions for more efficiency and accuracy. By reducing uncertainty and supply chain slow-downs, production teams can spend more time and effort on producing the much-needed packets than dealing with problems data can provide them the answers to.
If you want to know more about how Surgere can help prepare your supply chain for increased customer demand. Call our experts at 1.330.966.3746 or contact us at connect@surgere.com.
