Calif. freeze spells cold, hard reality of price hikes

Calif. freeze spells cold, hard reality of price hikes

LOS ANGELES —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

As of presstime, growers and suppliers were saying it would take several weeks to fully assess the impact of the freeze, which took its toll largely on citrus fruits and leafy greens as well as strawberries, avocados and other fruits and vegetables. —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

California produces about 95 percent of the fresh oranges sold domestically, as well as about 86 percent of the nation’s lemons, 90 percent of the avocados and about 75 percent of lettuce and spinach. —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

Analysts were predicting that wholesale citrus prices could triple in some cases and that lettuce costs would more than double as a result of decreased product availability. —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

But some chain operators reacted quickly to the freeze. San Francisco-based Jamba Juice announced temporary price increases of 25 cents to 35 cents for orange juice drinks. Other operators said they expected to find alternative supply sources for the affected produce and that consumers would see little impact—except perhaps the absence of complimentary lemon slices in their water or iced tea. —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

Calif. freeze raises prices, cuts supplies of fresh produce —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

Many operators were saying that it was too early to tell the impact the freeze might have on their supply of the affected fruits and vegetables. —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

Officials of Orlando, Fla.-based Darden Restaurants, parent of the Red Lobster, Olive Garden, Smokey Bones and Bahama Breeze chains, said they didn’t anticipate any trouble getting produce, with help from the company’s worldwide supply chain. —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

Like many multiunit operators, the 108-unit Mimi’s Cafe casual-dining chain, based in Tustin, Calif., buys produce under contract with suppliers, a practice that usually locks prices into a certain range for what is typically a six-month to one-year period, said president and chief executive Russ Bendel. —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

However, Bendel said his chain had already started seeing suppliers invoke “act-of-God clauses,” which, he said “means all bets are off on pricing.” —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

Bendel, whose chain is owned by Columbus, Ohio-based Bob Evans Farms Inc., added: “It would not surprise me if some of these products double in price for some period of time. The question is for how long.” —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

Among Mimi’s Cafe’s signature items is its fresh-squeezed orange juice. However, Bendel said the chain is somewhat flexible in terms of produce offerings because its menus change seasonally, depending on the availability of produce. —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

“Without question, the freeze will have an economic effect,” he said. “We’re waiting to assess what that effect might be. In the short term, it’s business as usual and things are costing more.” —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

Stock analyst Paul Westra of Cowen & Co. lowered his earnings estimates slightly for The Cheesecake Factory Inc. and California Pizza Kitchen Inc., whose namesake chains are “heavy salad” concepts that might feel the pinch of lettuce price increases in the first quarter. Westra said lettuce was expected to more than double, from about $10 per case to about $20 per case. —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

Howard Gordon, vice president of business development and marketing for Cheesecake Factory, said possible freeze-related price increases for the 123-unit chain were not big considerations as of late January. —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

“It’s going to take some time, like with gas prices, to see the effect,” he said. —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

California Citrus Mutual, or CCM, an agriculture trade group, estimated the state’s $1.3 billion citrus industry suffered nearly $804 million in damage, a number that was expected to increase with time, with more than half of that hitting navel orange growers. Other fruits impacted included Valencia oranges, lemons, grapefruits and Mandarin varieties. —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

“There is no question in our minds that this was, is and will be a major disaster for California and our industry,” said Philip LoBue, CCM’s chairman. —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

Typically about 15 percent to 20 percent of the state’s citrus crop is exported annually, but LoBue said that was not likely to happen this year as growers attempt to meet the domestic demand first. —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

Bob Blakely, director of grower services for the trade group, predicted that lemon supplies would be tight for four to five weeks after the freeze but would recover later in the year. —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

“I don’t think that lemons will see the doubling and tripling in price that we’ve seen with oranges,” he said. —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

Sourcing fresh oranges from other countries is a problem because of concerns that pests and disease could be introduced to California’s farms. Even fresh oranges from Florida cannot be brought into California for that reason—though operators in other states may be able to find sources of fresh oranges from Florida, where most of the nation’s orange juice is produced. —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

Eating oranges are imported from Spain, Australia and South Africa in summer months, but prices on those products are expected to be high. —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

“Fresh oranges are going to become more of a luxury fruit,” Blakely said. “Consumers are probably going to be impacted until next fall, when California is ready with a new crop.” —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

Jamba Juice’s 25-cent increase applies to smoothies and other blended beverages made with orange juice. Those drinks usually range from $3 to $5. Prices for freshly squeezed orange juice increased 35 cents. Officials of the chain said they did not know how long the price hikes would be in place. The smoothie chain was not anticipating any price increases related to strawberries, though that crop sustained significant damage. —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

The California Strawberry Commission was predicting only a temporary setback for the berry industry, with supplies resuming within six weeks or so after the freeze. —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

The California Avocado Commission estimated that about 30 percent of the state’s crop was lost and that the freeze may have harmed buds for the next season. —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

However, a gradual lifting of a quarantine on Mexican avocados is scheduled to be completed this month, allowing the fruit to enter California for the first time in years. In addition, imported Chilean avocados recently have been plentiful. —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

Jan DeLyser, vice president of marketing for the avocado commission, said fruit from Mexico and Chile would likely make up for the loss of domestic product. “There should be ample supply,” she said. —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

That’s good news for companies like Cypress, Calif.-based Real Mex Restaurants Inc., operator of the El Torito, Chevys Fresh Mex, and El Torito Grill brands, which feature fresh guacamole prepared tableside. Real Mex Foods is the company’s procurement and distribution arm, supplying the chains’ nearly 200 corporate and 50 franchised units. —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

Real Mex relies on California avocado supplies from February through October, said Carlos Angulo, president of Real Mex Foods. But with the new availability of Mexican avocados—and the fact that the company has long-term contracts that he hopes will maintain pricing levels—Angulo said he does not anticipate a need for price increases. —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

However, Angulo said Real Mex restaurants stopped using citrus fruits as garnishes immediately after the freeze and began looking for other supply sources in Texas and Mexico. —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

Because the romaine lettuce industry was hit hard by the freeze, Angulo said his company had begun supplying restaurants with full heads of romaine rather than romaine hearts because almost twice as many hearts are needed to fill a case. —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.

Real Mex also moved away from using fresh cilantro as a garnish, because the freeze left much of that crop wilted and unattractive. “We’ll still use it in recipes,” Angulo said, “but my concern is more about the appearance.” —Restaurant operators across the country are bracing for what may be several more months of recently elevated produce prices linked to record low temperatures in California over several nights in January that hit farmers with an estimated $1 billion in damage to winter crops.