In the last decade, food trends and consumer spending habits have gone hand-in-hand. Movements like low-carb, paleo and clean eating influenced not only the menus of existing QSR chains, but inspired the creation of new, niche QSR brands as well. The latest shift in consumer demand has proven a little more challenging for the fast food supply chain, however, forcing procurement teams to go beyond finding an exotic new ingredient or recipe and subverting the very concept of the supply chain as it stood.
While price remains, necessarily, a large deciding factor, it is no longer the sole motivator behind provider selection. That honor increasingly rests with sourcing. Can the demands of a supply chain in the fast food industry outpace the looming sustainability issues from largely untested specialty suppliers?
Determining Volume Flexibility Is Essential
Even if a local ingredient seems to come from a nearly endless source, it's important — especially for large chains — to know exactly where that source does end. Consider the plight of, arguably, the most famous QSR chain, McDonalds. The iconic chain struggled with egg shortages on the heels of their all-day breakfast rollout, and, as an article on AOL Finance notes, their limited-market introduction of Gilroy garlic fries ran out of the headline ingredient after only two weeks. This serves as an important cautionary tale.
While McDonald's commands one of the largest order volumes among its peers, it's not immune to truly devastating supply chain shortages, particularly in the tentative introduction of specialty items. When discussing future orders with a potential specialty product provider, always use your best case scenario to gauge their realistic ability to provide under high demand. If they balk or hesitate, consider that a red flag.
Chain Infrastructure Must Change
In the movement from price-focused to source-focused procurement in the fast food supply chain, the ingredients themselves aren't the only dramatic change. Sustainability must inform both equipment and handling procedures to maintain a cohesively-branded supply chain.
When you’re not ordering bulk frozen or dry foods, transportation and storage become trickier. Fresh produce needs to be handled gently to maintain eye appeal, and proteins need to ship within a precise temperature, rather than simply turning on a freezer set to X degrees below zero. Even if suppliers are changed, 3PL service providers also need to be on board, and their trucking, handling and storage procedures need to be up to par as well.
And, as you move deeper into your sustainability initiatives, it may be necessary to examine the cultivation and harvesting practices of a supplier. Subway, for example, specifically calls out adherence to fair labor practices in its sustainable sourcing policy: an important ingredient for a fresh-focused brand that relies so heavily on handpicked produce like lettuce and tomatoes.
Greater Stewardship Is Necessary
Supply chain auditing is no longer a dry, periodic process that only extends as far as searching for mishandling or inefficiency. Now part of a larger ethical culture, brands must be vigilant for anything that may damage authenticity and customer trust. If a problem is discovered, quietly distancing oneself and jumping to another supplier is no longer sufficient. The informed public is more likely than ever to uncover mistakes and question motives. With more and more outbreaks making headlines, such as General Mills' recall of more than 10 million pounds of potentially-tainted flour, food customers want to know all the facts from the moment a problem arises. The pressures of sustainability can make shortcuts and in-the-moment substitutes seem like a wise decision, when it comes to cost, but, ultimately, the price to be paid is far greater than any minimization of expenses.
Can the fast food supply chain keep up with demand while avoiding sustainability issues and shortages? Perhaps not all the time, but often enough that some careful planning and guidance will keep the supply chain flowing as smoothly as an organic blueberry milkshake — a few unavoidable lumps here and there, but overall a pour of sweet, profitable effort.