Container ships anchored offshore in ports across the U.S. and around the world are drawing headlines amid shortages caused by supply chain breakdowns that occurred due to the COVID-19 pandemic and other factors.
David VanHorn, a supply chain expert and professor at Rice University’s Jones Graduate School of Business, said even if supply chains aren’t global that they are still complex.
“They're kind of like machines with a series of gears,” VanHorn said. “So if one of the interconnected gears breaks down for whatever reason, well, that means everything kind of stops. And yes, you can fix that gear but it still doesn't mean that the other gear, some other gear may not pop up and slow things down.”
What that has meant for local restaurant owners like Ashley Lai of Dumpling Haus, 2313 Edwards St Ste. 180 in Sawyer Yards, is a dramatic increase in prices of produce and essential supplies over the last year, especially in the last few months.
Lai and her mother, Elaine Lai, like many Asian restaurateurs, are weekly customers of Sun’s Wholesale Club near Chinatown, one of her main suppliers for the vegetables and goods that she can only source from overseas. She said recently she’s seen a 100 percent increase in the price of meat. Prices have spiked 20-30 percent for the dry and paper goods she uses, like takeout boxes and napkins.
The same is true for many other products the Lais depend on. Ashley said her noodle distributor has had trouble getting their products to Houston at all and the mushrooms she uses in her restaurant shot up overnight from $1.59 to $7.99 per pound.
The logistics piece of the supply chain puzzle, VanHorn said, has also been a factor in recent shortages, particularly when it comes to a labor shortage of long-haul truckers who have either quit or retired during the pandemic.
“It’s all good if it gets produced and so forth,” VanHorn said. “But can you get it to distribution centers? And can you get it to the last mile to the restaurants?
The transportation and distribution issue can affect many different goods and services, VanHorn said. Lai and William Price Distilling Co. owner Bryan Clary both noted that Topo Chico, a popular carbonated mineral water, has all but disappeared from local grocery stores because of a glass bottle shortage.
In addition, Clary said he began placing orders for 2022 in May, and a cardboard box shortage caused a two-month delay that resulted in lost sales and stifled the distillery’s ability to launch new products.
Importing Jamaican rum took eight months instead of the usual one month, and importing Polish vodka took six months as opposed to the typical three weeks, he said.
Even building the distillery’s patio was delayed for a host of factors, Clary said, primarily due to the increased cost of lumber.
Struggling to meet demand
VanHorn said capacity is one of the main factors contributing to the supply chain issues restaurants are facing, and many restaurant owners decided to shrink their capacity in response to the pandemic in 2020.
“Before the pandemic, (the economy) was operating pretty close to a high level of capacity,” he said. “Capacity can be labor, facilities, materials coming through and so forth.”
When an economic recovery began in 2021, a need arose to meet the demand that had been dormant during the earlier stages of the pandemic. VanHorn said restaurants have been struggling to hire servers and cooks.
While meat prices have soared, Greg Gatlin, owner of Gatlin’s BBQ, 3510 Ella Blvd. Bldg. C Ste. A, said his primary concern is a labor shortage as he prepares to open a new restaurant.
“We're kind of used to the pain of it all,” Gatlin said. “It's getting to be a war of attrition, of how much more can you take.”
Gatlin said he’s been frustrated by what he viewed as an apparent lack of interest among some people in rejoining the workforce. He said he’s had between 50-60 people schedule job interviews since the pandemic began, and only 20 percent of them showed up.
“I know 100 people that own businesses, and they're looking for people to work,” Gatlin said. “There's a lot of jobs. It's just a matter of if you want to go get it or not.”
He said Gatlin’s has mostly been spared from shortages or having to make drastic changes because his supplier has been consistent, with the exception of a brief chicken wing shortage in the beginning of the pandemic.
“Our supplier has done a good job of getting us to things that we need,” Gatlin said. “And (we’re) not having to change the product or do something less with the product.”
Gatlin said he has had to pass off some price increases onto customers, but said he thinks customers understand the inflation that has resulted from any supply chain-related stalls.
Adapting to survive
When scarce products become available, Lai said there are limits on the quantity each customer can purchase as wholesalers and suppliers try to provide enough for all the restaurants that depend on those stores for their livelihoods. But restaurant owners like Lai have tried to stock up as much as possible in the event that shortages are prolonged.
“It just makes it hard,” Lai said, “because sometimes that's not even enough for us to sell and then we have to make multiple trips or go to multiple places.”
In response, Lai raised prices at Dumpling Haus “a little bit” and said she will likely need to do so again to account for the increase in costs she has incurred.
To adjust to the circumstances, Lai has had to make some creative adaptations in the kitchen, tweaking recipes to account for missing ingredients or switching brands of chili powders or bamboo shoots.
“We used to get this fried tofu from Dallas,” she said. “I think that either the company doesn't ship it here anymore or they went out of business.”
Lai said her family has tried to absorb the brunt of the inconvenience themselves rather than passing it on to the customers, and so she’s not sure if too many customers have noticed the price increases or menu changes.
“Instead of just taking something off the menu, we'll wake up extra early and go to three different stores to find the ingredients,” she said.
But Lai hopes the reality of the predicament facing Dumpling Haus and many other Asian restaurants can help dispel some stereotypes about the quality of products used to make Chinese cuisine as her business tries to survive amidst a pandemic.
“People have this perception that Chinese food should be inexpensive or cheap,” Lai said. “But really, we're using the same ingredients as other restaurants, the same labor costs and everything. So to have good quality handmade dumplings and fresh food, it requires a certain amount of work and expense.”