How Seafood Franchise Shuckin’ Shack Stays Ahead of the Inflation Curve

Shuckin' Shack's seafood menu is so impressive that you have to wonder how the franchise is able to procure sustainably-sourced fresh seafood without sky-high prices. If you were to try to source quality seafood on your own, you'd pretty much have to do everything except pull the fish out of the water, and even that may only save you a handful of dollars per catch. 

So, the question is: how are restaurants managing today’s current inflation spike? The answers may surprise you, and that's why it's crucial for seafood restaurant Franchise Owners to work with food distributors who can offer reasonable prices, especially since inflation is up nationwide – and no one knows how far it'll go over the next few years. Fortunately, Shuckin’ Shack’s Franchise Owners are set up for the long haul, thanks to their partnership with a laser-focused supply chain management company and simple product selection.

Got supply chain problems? Not when you open up a Shuckin’ Shack!

Shuckin’ Shack’s Franchise Owners are able to get fresh, sustainably sourced seafood at their locations across the country because of the brand’s dialed-in supply chain which helps them stay ahead of the inflation curve. And to do that, they partnered with an industry-leading supply chain management company: Stevens Food Group, a leading food-service purchasing and distribution team that currently manages over $250 million in annual purchases for a number of multi-unit franchise brands, including Shuckin’ Shack. Their extensive expertise in the food-service industry, along with their broad network of vendor and distributor relationships, allows them to deliver on their promises and make a positive impact on restaurateurs’ bottom line. Without a doubt, this level of consistent service has tremendous value for Franchise Owners with little to no experience procuring food inventory because prices are going up across the board.

When it comes to inflation, “it's the same thing that your frontline consumer is dealing with in the grocery store or at the gas station, pretty much everywhere,” said Shuckin’ Shack CEO Jonathan Weathington in a recent interview.

“What the warehouses are doing at this point is they're cutting SKUs [stock keeping units- the scannable bar codes printed on product labels]  and consolidating numbers [by withholding single product units in order to sell as part of a large bulk order],” adding, “they're saying ‘we're no longer carrying products XYZ.’ Well, if XYZ was a center of the plate item for your brand, you're scrambling to find a substitution with virtually no warning.”

The price of everything from paper napkins to fresh yellowfin is increasing faster than many of us in the restaurant business anticipated, and rising inflation is also touching every consumer each and every day. We pay higher gas prices at the pump, settle for off-brand groceries when our favorite products are unavailable, and notice that our favorite cereal suddenly costs 10 percent more than it did last week. 

According to the experts, the consumer price index has risen 7% over the past year and is currently the highest it has been since 1982. The rising price of goods is expected to continue for at least the next several months or more, making inflation a topic of concern for consumers and business owners alike. 

Food distributors have problems of their own to address

So how does a new Franchise Owner navigate these choppy waters? It's not like distributors are purposely shorting supply and fulfillment rates. There simply isn't enough stock to go around, so some distributors are starting to pull items from their inventory. Weathington says, “This can be a disaster for a restaurant owner if the item that can’t be obtained is a key ingredient in a centerpiece menu item. Suddenly, you're scrambling and making phone calls like a madman to replace what you didn't even know you were about to lose!”

From a distributor's perspective, it's not about operations and execution because their supply never arrives at the fulfillment center in the first place! The crux of the issue, says John Pizzola, Director of Procurement and New Business at Stevens Food Group,  is that there isn't enough labor to keep up with demand at each stage, so labor-intensive items – or items that require additional processing – are more expensive and getting more costly by the day too. He explains, “Not only does [the breakdown of the supply chain] start with the manufacturing and the ports, but it also filters down to the distribution as well- the pickers, the drivers, the warehouse employees- not only the labor shortages but the increase in wages that they're having to pay these employees to come to work and stay at work.”

So, is there a reasonable alternative for new restaurant owners?

We already touched upon it, but the only alternative to working with a supply chain company with an excellent reputation for service is to do everything alone. In other words, it's the worst way to go about procuring sustainable seafood, and here's why.

Mainly, you’ll have no choice whatsoever but to accept sky-high prices and markup your menu accordingly. You’ll need to find partners at every step from packaging to the actual fishing, and the cost of making your own supply chain of sorts is too high, way too high. So, as a solution, you work with a supply chain company that can handle a growing seafood franchise.

Otherwise, you’ll be joining the shrink-flation craze and have no choice but to offer smaller portion sizes of your most popular items. As Patrick Stevens, Executive Vice President of Stevens Food Group, notes, “Inflation is the sexy word, but shrink-flation is the lesser-known cousin that is just as dangerous.” Numbers-wise, it’s an easy business solution, but you’re shooting yourself in the foot because your guests will notice the change and perceive your brand as cheap. You can already see this in the grocery store, and food producers have masterfully kept their hands hidden until now. Many of us are already used to buying less food for the same price we’re used to paying. 

But when you can rely upon a seafood distribution process, you have much more flexibility in what you can offer guests. Shuckin’ Shack’s everyday menu is great, but the ability that Franchise Owners have to adapt to their individual market with daily chalkboard specials featuring regional favorites helps meet consumers where they are, regardless of the location. 

Staying ahead of the inflation curve won't be easy for most restaurants. Yet, the Franchise Owners at Shuckin’ Shack will have a significant advantage in procurement and distribution because of the well-thought-out, insightful processes and partnerships the brand has had in place long before the pandemic.

Working with Stevens Food Group allows the brand to minimize price increases because the items were sourced at market price prior to 2020. From day one, Stevens has been open and honest with Shuckin’ Shack’s executive team about the challenges they face and how they can all work together to batten down the hatches if the inflation storm turns into a full-blown hurricane.

Ultimately, the best way to fight inflation is to have a solid supply chain you can count on. While you may experience moderate price fluctuations due to unexpected conditions, using a purchasing manager or supply chain management company mitigates most of the pendulum swing pricing that ultimately confuses customers. Restaurant patrons these days expect a quality dining experience, and that's precisely where Shuckin' Shack fits into the equation.

Interested in learning more about owning a Shuckin’ Shack seafood restaurant franchise? Visit their franchise website for more details.