Post-Hurricane Tomato Shortage Hurting Restaurant Industry

Restaurants all over the country are scrambling to find menu alternatives to dishes requiring tomatoes as severe weather in Florida and California have hampered crops and caused prices to more than double.

Restaurant chains like Wendy's International Inc. (WEN) and Olive Garden parent Darden Restaurants Inc. (DRI), which need large quantities of tomatoes to supply their outlets, are among those making changes to combat the shortage.

Wendy's canceled plans to advertise its Chicken Temptations (search) sandwiches, which are each topped with a slice of tomato. The Dublin, Ohio-based chain said the last-minute switch to promote its Kids Meal and Homestyle Chicken Strips would contribute to a profit shortfall this quarter.

Darden, which also owns the Red Lobster (search) chain, is modifying recipes and using alternative varieties and sizes of tomatoes until supplies return to normal, spokesman Mike Bernstein said.

McDonald's Corp.'s (MCD) Mexican-style Chipotle chain is also considering alternative such as salsa recipes that are less dependent on tomatoes, spokesman Chris Arnold said.

The chain, which has not made any decisions yet, could also implement what Arnold called "rolling blackouts," where certain markets may not have tomato salsa one day a week.

Unlike Wendy's, Burger King Corp. (search) said it would proceed with plan to promote its TenderCrisp chicken sandwiches, which include tomato slices.

Burger King's senior director of product marketing, Carlos Ribas, said the chain will tackle the problem on a region-by-region basis, and will inform customers with signs in restaurants when there are no tomatoes.

Hurricanes including Charley and Francis, which hit Florida in August and September, forced many of the state's tomato farmers to replant crops that were expected to be sold in November and December, according to Gary Lucier, an economist with the U.S. Department of Agriculture.

As a result, tomato prices in October have risen 167 percent to about $15 for a 25-pound box, Lucier said.

To make matters worse, heavy rain in California this week flooded the state's tomato crops, halting harvests and threatening to put the brakes on a deal, which began last Saturday, for California growers to supply McDonald's restaurants in Japan.

"I have one supplier that's trying to continue but I have two others that can't supply them at all," said Ed Beckman, president of the California Tomato Commission (search), a trade group for tomato farmers.

Officials for McDonald's in Japan could not immediately be reached for comment.

Small restaurant owners, like Gerardo Cea of Cafe Prima Pasta in Miami Beach, are also being hard-hit as costs have escalated and the quality of tomato shipments has plummeted.

"Over 80 percent of our items have tomato sauce," said Cea, who added that he would not raise prices on menu items for fear of driving away customers. "I guess we are going to spend more money for tomatoes."

But while consumers may not feel the brunt of the tomato shortage while dining out, they are certain to be paying more in supermarkets.

"We are seeing prices more than double on some products," said Patti Councill, a spokeswoman for Great Atlantic & Pacific Tea Co. Inc. (GAP), which operates 630 A&P, Food Emporium, Waldbaum's and Farmer Jack grocery stores.