How Restaurants Are Surviving Climate-Fueled Price Spikes

This story was produced in collaboration with Civil Eats.

When Peter Platt was in Newport, Oregon in 2018, visiting Local Ocean Seafoods to bring them on as a supplier, he spoke with some of the fishermen docked outside the waterfront fish market and restaurant. “All the salmon fishermen were like, ‘We don’t even bother to fish off the coast here anymore. Everyone heads to Alaska,’” says Platt, founder and owner of Portland’s high-end Peruvian restaurant Andina. “‘There’s just no fish.’” The dearth of Pacific salmon, he learned, was partly due to warming waters in salmon streams and drought-fueled water shortages, which are lethal to salmon eggs and juvenile fish. Platt, who is in charge of sustainability initiatives at Andina, did the only thing he could: He and his staff took salmon off Andina’s menu.

“We’re just not going to offer it,” he says. “It’s either unavailable or too expensive for the quality… climate has a lot to do with it.”

With all the challenges restaurants have faced in the past five years — COVID, inflation, price gouging — the impact of climate change on their supply chains has often been overlooked. Yet global warming is steadily affecting fisheries and farms around the world and the foods they yield.

Here in the U.S., extreme climate-related events like forest fires, floods, and drought ruin crops and harm aquatic life. They also cause power outages and disrupt transportation and distribution, which increases the price of all goods, including food.

For many restaurant owners and chefs, the impact is a real, daily challenge, causing a shortage of quality ingredients and sudden fluctuations in price. All of this makes it harder to keep menu prices consistent and run a profitable business. “There’s a lot of topsy-turviness right now,” Platt says.

Climate change has affected the supply of other foods, too. Cocoa yields have already fallen due to changes in rainfall patterns, an uptick in pest and fungus infestations, and increased droughts. Half the suitable land for coffee will be gone by 2050. And there’s mustard: Prices skyrocketed in 2021 due to a severe drought in Canada, the world’s largest producer of brown mustard seeds.

Salmon is just one of the menu problems Platt has had to deal with recently. Citrus is another. Andina requires a steady supply of key limes for leche de tigre, the marinade that’s used for ceviche, Peru’s flagship dish. Andina sources them mostly from Mexico, where a perfect storm of colder weather, floods, and price manipulations by drug cartels caused prices to fluctuate between $37 and $67 from July 2023 to July 2024. Nevertheless, Platt and his brother, Victor, who leads the chef team, did not raise the price of ceviche. “Like most restaurants, we have simply had to decrease or even forgo margins on certain dishes to avoid passing on the sticker shock to our customers,” Platt says. “You just have to suck it up, you know?”

Grace Cavallo

Ayad Sinawi, chef-owner of Mabu Kitchen in Philadelphia, has had no choice but to suck up the cost increases, which are crippling for a small operation like his. A beloved French restaurant serving bistro classics and Southern comfort food, Mabu has paper-thin margins and no liquor license to bring in extra cash from the bar.

“Prices tend to take a weird roller coaster ride on a weekly basis,” he says. “I get 15 dozen eggs for $25 one week and then $52 the next.” Last winter, when there was a national egg shortage, that price shot up to $89. The shortage was caused in part by farmers culling millions of birds due to an outbreak of avian flu, which, experts increasingly believe, is worsening as climate change alters the migration patterns of wild birds that spread the disease. Other factors are at play as well, like the rising costs of fuel, feed, and packaging.

Mabu’s brunch is tremendously popular, filled with eggy specialties like a French omelette, croque-madame, and fried chicken and waffles Benedict. “We had to charge a little more for our eggs for a while,” Sinawi says. But he did so with extreme reluctance, wanting to abide by his principles of offering excellent yet affordable food. “The business plan was always about being a local bistro, catering to the neighborhood, keeping prices within the parameters that will encourage people to be impulsive (with their orders),” Sinawi says. “The minute I start making it a ‘destination,’ I’m going to lose all my locals. It’s not worth it to me.” When prices went back down to $52 for 15 dozen, he lowered menu prices accordingly. “But that’s still 29 cents (per) egg. That’s a lot for a restaurant!” he says. During the worst of the egg shortage, that added roughly $500 to his monthly costs.

When factoring in rising inflation and hikes in other costs besides food, the financial environment feels increasingly insurmountable for many restaurants. Everything from internet connections to waste removal services has gotten more expensive. For example, Sinawi had originally contracted with a garbage removal service that charged $129 a month. The business was bought out by a bigger company that increased his bill by $40 without warning, meaning he was now expected to pay $169 for the same service with no time to negotiate or plan. (This happened at the same time as the egg shortage.) Three months later, his bill rose again, to $228.

Given these combined financial pressures, it’s no wonder that small independent restaurants often go out of business. According to a report released in February 2024 by the Global Food Institute, 26 percent of single-location, full-service restaurants fail in the first year. Mabu Kitchen is still going strong after two years, but Sinawi admits he doesn’t know how much longer he’ll be able to make it.

Tara A. Scully, associate professor of biology at George Washington University, is one of the report’s authors. The 60-page document, titled “The Climate Reality for Independent Restaurants” and released in collaboration with the James Beard Foundation, drives home how vulnerable independent restaurants are to climate change disruptions. Furthermore, Scully and her colleagues write, “We choose to call these ‘unnatural disasters’ because they are driven by the increase in greenhouse gases generated by human activities. To call these events ‘natural disasters’ ignores their true origin.”

Scully, who is also director of curriculum development for the Global Food Institute, says that the most alarming part of the report to her is the data about global climate incidents. In just the past three years — 2020 to 2023 — storms have increased by an annual average of 19 percent, floods by 23 percent, and wildfires by 29 percent, according to the International Disaster Database. “I literally called up my colleague and said, ‘you are not going to believe this!’” She hopes this panic-inducing statistic will serve a purpose. “It should be a total wake-up call,” Scully says.

Whether extreme heat, hailstorms, flooding, or forest fires, these unnatural disasters lead to a plethora of correlated financial crises for restaurants. These can range from power outages, air-conditioning breakdowns, delivery delays, and loss of food quality to ingredient shortages that lead to the unpredictable price spikes both Platt and Sinawi are experiencing. Also, crop shortages are directly tied to inflation, the report found, taxing restaurants further. Moreover, if greenhouse gases are not reduced, extreme weather will continue to cause crop loss, and inflation could rise as much as 3.3 percent over its current values by 2035, the report predicts.

To avoid climate-caused supply chain disruptions, many U.S. chefs and farmers are trying to source more ingredients locally.

For the past two decades, Platt has sourced ají chiles from Peru, which was the only place you could find these flavorful peppers so essential to Peruvian cuisine. But over the past 15 years, he’s been collaborating with a farm in Corvallis, Oregon called Peace Seedlings. “They’ve been patiently hybridizing varieties (of ají) and finding out which seed varietals grow best in this climate,” Platt says. “To my knowledge, we’re the first growers of this product locally.”

Anna Caitlin

Andina

Now Andina has diversified its sources of ají: their Peruvian supply is vacuum-sealed fresh organic ají paste, supplemented with fresh ajís — several hundred pounds this fall — from Peace Seedlings. They also purchase frozen ajís from GOYA and other mainline importers. One of Andina’s major ingredient suppliers, Charlie’s Produce, is also experimenting with growing ají chiles in its fields in California. Expanding their domestic farming partnerships gives Andina a more reliable source than Peru, which is facing its own set of climate-change challenges.

However, local sourcing isn’t always a guarantee of supply. In 2011, 90 percent of Texas — one of the U.S.’s largest agricultural producers — was classified as being in “exceptional drought.” The drought was devastating, causing $7.6 billion in losses and lowering the agricultural GDP in the state to a mere .8 percent. According to Tara Scully of the Global Food Institute, it’s highly likely we will continue to see an increase in extreme weather, and ultimately U.S. restaurants will have to start importing more ingredients from other countries. “We’ll have no choice,” she says.

Though meat, poultry, and fish have never been high-profit menu items, the margins have grown even slimmer as protein prices have spiked, increasingly due to climate events that can unfold rapidly. Within a matter of days, warming waters can cause massive algae blooms that suffocate marine life, depleting populations of fish and shellfish — and, if the blooms release toxins, make them unsafe for people to consume. Or, as with salmon, the higher temperatures can reduce fish runs, driving prices so high that it doesn’t make sense for chefs to keep salmon on the menu.

Being nimble, quickly finding answers to problems like these, makes all the difference. Buying in bulk is one solution. Andina buys so many limes — 50 cases per month — that Platt was recently able to negotiate bulk purchases on an annual basis.

Platt has also staved off price volatility by precontracting with suppliers. That’s what he did with shrimp. He signed a purchasing contract at the beginning of the year to lock in a price for a given number of pounds. “Oftentimes that would save us a lot of money, because they would have some kind of hurricane or another algae bloom or something along those lines that would wreak havoc on the fishery there,” Platt says.

George Frangos, co-founder and president of Farm Burger, resolves supply-chain issues by developing strong, personal connections with a wide network of local sources. The Georgia-based restaurant chain has 11 locations throughout the Southeast, and serves 100 percent grass-fed (and grass-finished) beef burgers, pasture-raised pork burgers, seasonal salads, and, in the summer, peach compote with local goat cheese.

Courtesy of Farm Burger

Frangos says he’s learned to avoid surprise price fluctuations by knowing each of his suppliers by name and relying on them to give him and his team a heads-up when prices head south. “We try to work together, so it’s not just an overnight thing of, ‘Our prices are going up 50 cents a pound.’”

One of Farm Burger’s main beef suppliers is Hickory Nut Gap, a fourth-generation family-owned regenerative ranch based outside Asheville, North Carolina, that is a network itself, partnering with 22 ranches across the South. In Hickory Nut, accredited by the Savory Institute, Frangos feels he’s found a resilient partner for his key ingredient. In addition to the animal welfare benefits of most grass-fed beef, there are also likely climate benefits. Another perk: its relatively consistent price. “When there is a shortage of feed from drought or other climate related hardships, the price of grain-fed beef increases, whereas the price of grass-fed beef is very resilient to climate forces,” says Frangos. That said, even grass-fed beef prices have gone up in recent years due to ranchers’ increased operating costs, labor costs, and the cost for hay and silage (reflecting slower grass growth due to heat waves).

In Philadelphia, chef Sinawi resolves the high price of beef through his relationship with his customers. He’s broken his unspoken rule to keep entrees under $30 with only one item: steak au poivre, which he’d been selling for $29. The dish, which Sinawi makes with USDA Choice New York striploin, is seared to order with cracked peppercorns and comes with a Cognac cream sauce that gives it an umami richness. “I had no choice. I took it off the menu for a month and people were asking for it,” he says. Ultimately, he put it back on the menu and raised it to $36. Having conversations with his customers, sharing his pricing challenges with them so they have a context for the increases, is key to their acceptance of the cost.

Higher protein prices — beef is up 4.5 percent over last year and whole-chicken prices increased by 26.6 percent from 2021 to 2024 — are ultimately driving some restaurants like Andina to shift to more plant-based alternatives. “(Higher protein prices are) a big part of what’s driving a shift towards more vegan and vegetarian menus,” Platt says, drawing on his longtime observations of the restaurant industry. Also, there’s another incentive for the shift: He sees customers increasingly opting for vegan and vegetarian menus for environmental and ethical reasons.

Andina has several vegetarian main courses on the menu, and has always offered quinoa, a Peruvian mainstay grain, as part of several dishes. Victor Platt (Peter’s brother), who leads the chef team at the restaurant, will soon be launching a quinoa risotto (“quinotto”). Peace Seedlings is beginning to grow quinoa domestically, but quantities are small, so Victor Platt sources bulk organic quinoa mostly from Bob’s Red Mill (who in turn sources it from Peru and Bolivia — also a climate consideration).

Quinoa has an auspicious climate future, says Peter Platt. “It’s incredibly adaptive. It’ll grow in sub-standard soil, in conditions that wheat won’t,” he says. “It’ll grow wherever you plant it. And it’s one of the world’s most nutritious foods.” He points out that quinoa, like meat, contains all nine essential amino acids, and is delicious when well prepared.

Tara Scully says that many of the chefs she interviewed for the GFI report were reducing the portion size of protein, because it’s now so much more expensive. She heard echoes of this refrain at a Food Tank discussion this past week in New York City about how restaurants can take action on climate change. “Plants are more climate-friendly and they cost less,” Scully says. “So if you’re looking to reduce your costs and also deal with climate change as a chef, it’s a win-win.”

She also thinks consumers — especially younger ones — are willing to pay for vegetable-based dishes because they’re healthier, better for the planet, and taste amazing. Meat seems simplistic, almost too easy to make taste good, while vegetables can showcase a chef’s skill and creativity: “You can transform a portobello mushroom into something that’s over-the-top umami.”

Hannah Wallace writes about food politics, regenerative agriculture, wine, cannabis, and travel for a wide variety of publications including Bloomberg, Conde Nast Traveler, Inc., Food & Wine, The New York Times, Reasons to be Cheerful, Portland Monthly, Vogue, and Wired.