Soaring inflation, regulation, geopolitical upheaval and challenging weather conditions are combining to affect the food and beverage sector in unprecedented ways. Certain categories within the hospitality industry will be hit harder than others by inflationary pressure.
At Avendra, we continually work to develop solutions, mitigate price increases and avoid disruptions. We regularly provide recommendations to help customers prepare and adjust operations accordingly. All our customers benefit from up-to-date guidance that summarize market conditions and provide solutions to supply chain challenges.
For instance, we recently supplied clients with options to prepare for skyrocketing prices in corn and soybeans, which are two key drivers in the food and beverage industry affecting everything from proteins to dairy and eggs, edible oils and the cost of delivery. Our findings generally indicate inflation may slow for these categories but isn’t expected to reverse any time soon.
Additionally, some cage-free egg items have increased 11%-25% in the past month due to the Avian flu that has impacted the industry. To mitigate this cost, we recommend emphasizing controlled batch cookery for buffets or group events to prevent waste. If possible, execute a la carte eggs to order with precise measurement of portion sizes and know what your input costs are in relation to your menu sell prices.
Meanwhile, some suppliers are experiencing sporadic supply constraints and delivery delays. If a brand or flavor is unavailable at the time of order, consider ordering alternate flavors or package sizes. For larger full-service properties, inquire about a standing order that will help the warehouse with consistency in forecasting. Plan ahead for events since advance orders will help enable alternate fulfillment solutions. For select service properties, consider ordering additional volume in the event of future outages if storage is available.
Other suppliers have been implementing price increases and adding fuel surcharges. To help reduce costs, we recommend paying by ACH or wire transfer process to save on fees. In some instances, you can also aggregate orders at the property level to hit the freight minimum order size to save on delivery costs.
A combination of flexibility, creativity and strong supplier relationships will help mitigate challenges brought on by unprecedented inflation. As a procurement partner, Avendra can custom-tailor solutions and strategies to meet the dynamic needs and business objectives of properties like yours. Avendra, we get it. And we can help.
Avendra is North America’s leading hospitality procurement services provider. Our supply chain management solutions are tailored to our clients’ business strategies and deliver benefits beyond great savings. We combine years of hospitality expertise, purchasing power, services and software to help customers impact the bottom line, improve operational performance, and better serve guests. More than 10,000 customers rely on Avendra as a trusted partner. Visit avendra.com to learn more.