Recent geopolitical events have resulted in escalating commodity prices and supply chain instability. In response to the volatility of the global commodity market, ArrowStream’s Director of Commodities, Jerry Dalton, and Sr. Director of Product, Matt Heckroth, joined Ashley Berland, Vice President of Supply Chain at Restaurant Growth Services, and Adam Shrif, Vice President of Procurement at GA Goods, to discuss the context of the rising prices and difficulties with distribution, as well as forecasting solutions to the challenges.

The recent year has brought commodity shortages to the international market, most notably energy and grain because of the Russian-Ukrainian War. Wheat prices were high prior to the onset of the conflict and the war has only exacerbated a difficult situation. Russia and Ukraine comprise a total of 26% of the world’s wheat exports, and the war has severely impeded the global wheat trade. Russia is also one of the world’s principal suppliers of petroleum and natural gas; and international sanctions have led to record high diesel fuel prices. Furthermore, the port of Shanghai – the largest maritime trading center in the world – has shut down as a result of the coronavirus outbreak, leading to a significant halt in global trade.

This series of obstructions to the global supply chain and the rising prices of commodities have been amplified by a continuous decrease in purchasing power across the board. Inflation rates in 2021 were the highest since 1982, and the issue has continued through the early months of 2022.

The Restaurant Commodity Index – a measure of the average price of foodservice commodities – has increased by 31.8% between 2020 and 2021, with a further increase of 15.4% so far in 2022. Additionally, distribution has been hindered by a labor shortage and supplier fulfillment rates have been unpredictable.

While the inflation rates and supply shortages are anticipated to reduce over the next few years, the outlook on recovery is uncertain and most likely more gradual than we’d all wish. The remedy for the situation is not to wait and hope for its eventual turnaround, but to prepare for the challenges. Expanding supplier partnerships with secondary and even tertiary lines of supply have become necessary to ensure fulfillment. Creating a flexible supply chain with the ability to continuously shift in response to the changing situation has proven to be essential amidst the present disruption.

Another crucial step to circumventing and alleviating these problems is to arm yourself with information. Up to date knowledge on the changing circumstances of the global market allows you to efficiently navigate the turbulence. ArrowStream’s CommodityONE Intelligence Solution provides daily reports analyzing price momentum and forecasts of over 200 different commodities and foodservice items – with customizable reports for your key menu items. This trove of information allows for transparent conversations with suppliers and the ability to protect profit margins. Understanding the situation brings you one major step closer to alleviating the global supply chain disruptions.

With a network of over 60,000 restaurants and over 8,500 suppliers, ArrowStream – the leading foodservice supply chain cloud – allows you to secure the efficiency of your business’ supply chain through difficult times. With market insights to ensure up-to-date pricing optimization and ready access to new supply and distribution options – all streamlined for priority with universal company accessibility – the platform alleviates many of the most challenging issues of the adverse present conditions. Instead of pouring over scattered documents, find instantaneous solutions to your problems so that you have what you need to do to keep the train moving.

Don’t let your restaurant supply chain get hindered amidst the present difficulties.

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