We’ve all heard about how the supply chain is affecting small businesses like froyo shops. COVID-19 lockdowns across the world disrupted manufacturing and the war in the Ukraine is causing additional shortages. The two forces have also contributed to inflation and a labor shortage. According to recent National Restaurant Association survey, 95% of restaurants in the US reported experiencing considerable supply delays or shortages in recent months.
We’ve seen shortages of froyo cups and spoons at our local froyo shops. And we’ve heard about shortages of pint containers, sugar, mochi, mango puree, froyo flavors, chocolate, napkins, lids for froyo cups, straws, etc. Shops are also reducing hours or even closing down due to the labor shortage. Not surprisingly, froyo prices are up – around 10 cents an ounce higher than we saw this time last year in Los Angeles.
Some of the substitutions are easy – e.g., using generic spoons vs. custom spoons. Others are far more challenging.
Here’s some advice from one of IFYA’s experts, Jeff Resnick, CEO of Spaceman USA.
Resnick advises froyo shops to “plan ahead and be proactive. Keep in touch with your vendors and create relationships with new vendors proactively, even if you do not need supplies or equipment now. Keep your hand on the pulse so that you are educated on the state of things. If you are able to, put in orders for items much further in advance then you are being quoted.”
He also advises shop owners to “Keep in touch with your sales associates and dig in to find the truth. Hold your partners accountable, ask for explanations, and make sure you stay in communication as you wait for open orders. Be fair with your customers as well. Communication goes a long way. Frustration subsides as we all better understand the reasons why things are happening. Frustration rises when we are in the dark and left to make assumptions.”
When asked about how inflation was impacting his business, he says, “raw materials have gone up in price – our overall costs of goods have increased by over 5%; shipping costs, especially internationally have increased much more, by several multiples. We look for areas to improve efficiencies, build scale, and free up cash flow and combat these increases. We participate in the increased stress with our partners to build good will and long term trust.”
The supply chain challenges are global and will take time to resolve. They will hopefully lead to improvements in supply chain management.
