10 Ways Restaurant Operators Can Mitigate Supply Reduction from Avian Influenza

From RestaurantNews.com

Deaths of more than 39M hens to impact liquid eggs productions used by restaurants, bakeries, and packaged food producers.


Waltham, MA  (RestaurantNews.com)  The recent outbreak of Avian Influenza has led to the deaths of more than 39 million hens, causing a disruption in both the egg and poultry industries and leading to all-time high market prices for restaurant, bakery and food service producers. According to the latest numbers from Foodbuy, an operating partner of Waltham, Mass.-based Consolidated Concepts, Inc., Iowa as the largest egg producing state has lost 40% of its egg-laying hens, contributing to another 10% reduction in egg-laying hens across the United States.

Further, over the course of May, Midwest egg prices have increased 40% for shelled eggs and upwards of 100% in the liquid egg market. This means supply has tightened and product shortages, production suspensions and price increases have been announced by all egg manufacturers.

“Due to the geography of where the virus has been identified, the egg laying chicken flocks have been affected since they are predominately located in the Midwest. Fresh eggs and liquid eggs will be impacted for an estimated eight months until facilities can be sanitized and properly prepared, inventories can be replenished, and production can ramp up again,” said Wade Winters, vice president of supply chain for Consolidated Concepts. “The virus cannot survive in the warmer temperatures and more intense sunlight so the recent number of cases has been minimal within the last two weeks. However, there are fears that another outbreak could surface again in the fall when the waterfowl migrate again, but the industry will be better prepared by then.”

For restaurant operators, bakeries and other foodservice producers, the impact of Avian Influenza will be most evident in the production of liquid eggs, since approximately 85% of all egg layers are used for liquid egg production.

Consolidated Concepts Inc., COO Bruce Reinstein has recommended these 10 best practices for mitigating the reduction in supply and working with supply chain vendors.

  1. Do not procrastinate. The market is not coming down soon.
  2. Adjust menu pricing to reflect price increases.
  3. Substitute liquid eggs with shell eggs where appropriate, cage free where available.
  4. De-emphasize eggs on menus and pull them from LTOs.
  5. Adjust buffets where eggs are not positioned first.
  6. Substitute smoothies, hot cereals, grain bars, fruit and granola for egg stations.
  7. Shift to summertime continental breakfast menus where feasible.
  8. Be flexible on the egg brand and size of package in order to have supply.
  9. Be open to specification changes. Frozen or liquid eggs may be the only option.
  10. Look at options outside your current distributor.

“There is a lot of panic about the shortage, but restaurants will adjust where necessary and will ride out the storm,”Winters said. “Menu options will get adjusted and menu prices will get adjusted. Customers will understand if the all-you-can-eat omelet station isn’t going to be available for a few months.”