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National Restaurant Association - Supply experts talk tips on egg shortage

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Supply experts talk tips on egg shortage

As the bird-flu epidemic in this country continues, U.S. restaurant operators are facing unprecedented supply shortages and increased food costs that could last for at least the next 18 months.

“We’ve never seen anything quite like this,” said Scott Murphy, chief supply officer for Dunkin’ Brands, the Canton, Mass.-based parent of Dunkin’ Donuts and Baskin-Robbins. “This has definitely impacted our business. The cost impact has been significant for our franchisees in the short term since they’re bearing the brunt of the price, or cost, increases on [egg] product. We are working with them to control costs as much as possible.”

The epidemic has already resulted in the loss of about a third of U.S. egg supplies, leaving restaurateurs scrambling to come up with alternative solutions for their operations.

“Whether it’s liquid or shelled eggs, manufacturers are raising their prices,” says Ric Scicchitano, Corner Bakery’s executive vice president of food and supply chain. “But I truly think it would be shortsighted to take eggs off the menu because of that. We want our customers to walk into our restaurants and think it is business as usual.”

Murphy and Scicchitano recently shared thoughts on how their companies are dealing with the shortage:

  • Have backup plans. “We have supply contingencies in place, but we’re always open to new source and supply [ideas],” Scicchitano says. “If a supplier doesn’t have the capacity or depth to keep up with our needs, someone else might. And anyone who helps Corner Bakery is going to keep that business.” Dunkin’ also has supply contingency plans at work, Murphy says. “Our supply chain folks are most concerned about continuity of supply so we’re using a couple of different egg suppliers now. That is something I would always recommend: Have multiple manufacturers available.”
  • Watch your promotions. Focusing on the right promotions during the shortage is essential to ensuring operational disruption does not occur, Murphy says. “As costs increase, we have to make sure we’re not over-promoting. We have to protect franchise margins, but still give value to our customers.”
  • Be nimble. Dunkin’ is looking at offering some options that require less eggs or egg products, Murphy says. “We’re trying to come up with items and promotions, like Wake-Up Wraps that are made with half an egg rather than a whole one. We’re also looking at some new sandwiches that don’t have eggs in them at all.”
  • Keep your guests happy.  “We’re sourcing eggs at higher prices and we know it’s going to cost us more simply because there’s less supply out there,” says Scicchitano. We’ll just have to bear the extra expense. The focus is not to impact our guests.” He says the company isn’t changing its breakfast promotions. “Scramblers, egg sandwiches and pancakes are a core part of our business.”

Pictured from top right: An outbreak of bird flu is causing a shortage of egg supplies in the United States;  Dunkin' Donuts is exploring various types of wakeup wrap sandwiches; Corner Bakery's Ric Scicchitano; Dunkin's Scott Murphy

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