August 17, 2020

Why Is There a Pepperoni Shortage?

Pepperoni is the latest product to face a shortage caused by the coronavirus pandemic. A slow in the supply of pepperoni, plus an increase in demand, means local and independent pizza restaurants are having to pay more for what a 2019 survey found was America’s favorite slice topping.

The Supply of Pepperoni is Down

The process of creating pepperoni is labor-intensive and has low profit margins. According to Barry Friends, a partner at foodservice consultant Pentallect who spoke to Bloomberg, this has resulted in some producers opting to streamline operations and instead “ship out large pieces of meat for further processing,”

As a result, local pizza restaurants are seeing an increase in the price of pepperoni, with a chef in New York City revealing that the price for a pound of pepperoni is now $6, up from $4 earlier this year.

However, larger chains have not been affected by price increases or shortages as their prices and quantities are determined in long-term contracts, so pepperoni fans should not have trouble ordering from Domino’s or Papa John’s.

The Demand for Pepperoni is Up as Pizza Sales Increase

The demand for pizza, and consequently pepperoni, has increased during the coronavirus pandemic, with people ordering more takeout pizza while restaurants are closed.

Both Domino’s and Papa Johns reported an increase in sales due to the pandemic, with Domino’s saying in July: “U.S. same-store sales grew 16.1 percent during the quarter versus the year-ago period and were positively impacted by customer ordering behavior during the COVID-19 pandemic.”

Rob Lynch, President and CEO of Papa John’s, said in a press release issued on August 6: “Faced with an unprecedented global challenge but guided by our values and purpose, Papa John’s achieved record sales in the second quarter.”

Pepperoni isn’t the only product to have faced a shortage since the coronavirus pandemic hit earlier this year. Soda brands including Coca-Cola and Dr Pepper have faced shortages during the pandemic, as have some beer brands, due to a shortage of aluminum cans.

An aluminum can shortage has occurred due to closures and stay-at-home orders. The beer that would normally be stored in kegs and sold at bars and restaurants has instead been packaged in aluminum cans and sold at stores.

Additionally, cleaning products and medical equipment have faced shortages as demand across the world skyrocketed when the pandemic hit. On Friday, the Food and Drug Administration (FDA) released a list of medical devices that are in short supply, which includes examination gowns, surgical apparel, and surgical gowns.