Potato Scarcity At McDonald’s Japan Attests Importance Of Supply Chain Resilience In Food Sector

Wednesday, January 26th, 2022 | 162 Views

McDonald’s Holdings Company announced that its outlets across Japan will suspend the sales of hash browns, and continue rationing French fries through January 2022. The fast-food chain operator attributed the menu rollback to an acute shortage of potato stocks as floods and COVID-19 disrupted the imports from North America. This just goes to show how critical it is for food and beverage businesses to build supply chain resilience as climate change and the pandemic continue to wreak havoc on shipments and trade, says GlobalData, a leading data and analytics company.

Due to the dearth of domestic potato production, and French fries processing facilities, multinational fast-food chains in Japan rely on potato imports from North America. However, severe flooding at the Vancouver port and global logistics and shipment disruptions due to the spread of Omicron have hindered North America potato shipments to Japan since December 2021. The shortage of potato stocks compelled McDonald’s Japan to temporarily drop large and medium serve portions of fries from its menu, and retain only small-serve fries across all 2,900 outlets in Japan in mid-December 2021.

Bobby Verghese, Consumer Analyst at GlobalData, comments: “With the easing of COVID-19 restrictions, and partial normalization of HoReCa operations, the overall on-trade and off-trade consumption of French fries in Japan spiked by 9.4% during 2020–2021*. However, the unexpected shortage of potatoes has hit the on-trade sales of French fries during the peak holiday season, when dine-ins and takeaways typically trend upwards.”

In sharp contrast to McDonald’s Japan, its domestic rival, Freshness Burger procures potatoes from the Hokkaido prefecture of Japan. Subsequently, even as McDonald’s Japan is reeling from the prolonged potato shortage, Freshness Burger has reportedly rolled out a special promotion, cheekily titled “We’ve Got Potatoes”.

Verghese concludes: “The new COVID-19 Omicron and Delta wave are triggering labor shortages and logistical challenges across the globe. Simultaneously, crop cultivators are coming under increasing stress due to the pronounced impact of climate change. Moreover, with the recent surge in COVID-19 positive cases, HoReCa operators will potentially face new restrictions on seating capacity and operating hours, and waning customer footfall. The confluence of these factors is pushing the conventional supply chains towards breaking point. Food and beverage companies need to localize their supply chains to a greater extent to ensure business continuity and long-term survival amid the crisis.”

Quotes provided by Bobby Verghese, Consumer Analyst at GlobalData
*Data taken from GlobalData Consumer Intelligence Center — Market Analyzers, accessed in January 2022.
This press release was written using data and information sourced from proprietary databases, primary and secondary research, and in-house analysis conducted by GlobalData’s team of industry experts

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