If you’ve been following the news lately, a rampant, large-scale outbreak of the avian flu has decimated much of North America’s population of chickens.  As a result, the supply of eggs has dropped significantly. Unfortunately it doesn’t look to be improving any time soon with the latest expectation of pricing reaching $6 per dozen by the fall.

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One corporate-victim of this pandemic is Rita’s Italian Ice and their frozen custard. Rita’s needs 24 tons of eggs each month to produce enough custard to supply their retail locations. Even if they could get enough eggs, the price for eggs is up 3-4 times in some areas. That would be one heck of an expensive gelati at Rita’s for consumers!

So, what did Rita’s do? They discontinued their custard, for now anyway, and switched to an egg-less soft serve ice cream. Not the custard consumers know and love, but an alternative in the face of low supply and increasing costs.

Rita’s was certainly not the only company affected- however one company seems to have found some relief, albeit temporarily. Taco Cabana’s CEO Todd Coerver took to Twitter to share their good news of some pricing relief, allowing them to lower menu prices on items containing eggs. Menu prices had been previously raised to reflect the cost increase in procuring eggs.

This is certainly a relevant reminder as to how susceptible all organizations are to supply disruptions and the resulting price fluctuations. In fact, the Next Level Purchasing Association warned of a Bird Flu pandemic and it’s affects back in April of 2009.

So, if you haven’t developed a contingency plan yet, consider this your second warning.  You may have identified alternate sources for when supply disruption is due to supplier failure, but do you have alternate materials/ingredients/etc. identified if the items you depend on were to disappear tomorrow?   Let’s be honest, if something as simple as an egg can be in short supply, anything is possible.

Charles Dominick, SPSM, SPSM2, SPSM3

Charles Dominick, SPSM, SPSM2, SPSM3 is an internationally-recognized business expert, legendary procurement thought leader, award-winning entrepreneur, and provocative blogger. Charles founded the Next Level Purchasing Association in 2000, oversaw its incredible growth, and successfully led the organization to its acquisition by the Certitrek Group in 2016. He continues to blog and provide advisory services for the NLPA on a part-time basis as he incubates his upcoming business innovations. Charles is also the co-author of the wildly popular, groundbreaking book, "The Procurement Game Plan: Winning Strategies & Techniques For Supply Management Professionals."

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