The Echo-nomist

A few days ago, I wrote about the global chip crisis. Need I remind you, it’s not about the chips you eat. But the ketchup you get with those chips is facing a shortage!

In a pandemic stricken world, we are undoubtedly facing a shortage of vaccines, medicines (ex- Remdesivir), ventilators, oxygen, hospital beds, PPE etc. We are also facing a shortage of many regularly consumed goods. Let’s talk about these:

1. Ketchup

When people open their takeout bags they look for the ketchup sachet’s at the bottom. When people eat at restaurants they especially ask the waiter for ketchup.

But now there is a shortage and the manufactures are trying to fulfill the demand for ketchup, but they’re failing. There has been a boom is food home deliveries during the pandemic.

Restaurants added ketchup packets generously in takeout bags during the pandemic. Even restaurants switched to sachets during COVID to switch from reusable ketchup bottles because they’re trying to limit the spread of the virus. This led to a surge in the demand for ketchup, which couldn’t be met by the supply.

Demand > Supply

This lead to a rise in market equilibrium. Packet prices are up 13% since January 2020.  Long John Silver’s, a fast-food restaurant chain, said that the price increase of ketchup has cost the company an extra half-million dollars.

Heinz is the main producer of ketchup in the US. According to WSJ, it has nearly 70% of the market share for ketchup! In an attempt to produce more, Heinz announced that they plan on opening 2 new production lines this month, which is expected to increase output by 25%.

I’m sure you remember when you ran out of ketchup at home, and you used to thump the bottle to get every last bit out. Right now, US is trying to squeeze out what’s left. People are hawking their stash of ketchup sachets. They’re being sold on eBay for a price as high as 20 sachets for 8$.

2. Bubble tea/ Boba tea

Boba pearls will soon become as precious as actual pearls. There is a bubble tea shortage that could last weeks. Enjoy it while you can.

Bubble tea has become popular in recent years. It’s a tea-based drink that originated from Taiwan. Basically, it’s a drink that contains chewy tapioca balls.

There is a supply chain blockage that is affecting products shipped to the US, from Asia. There has been an increase in consumer spending recently in the US. This has caused a lot of stress on the East and West coast ports. There are boats carrying tens of thousands of shipping containers, just waiting outside ports.

Mostly, boba isn’t domestically produced, it’s all exported. Boba wholesalers say their orders of boba just aren’t arriving, and they have no idea when they’ll get them. Shops are running out of it. How will they serve bubble tea now???

Boba Co. produces boba products domestically but they’re likely to face a shortage too, since they import their tapioca starch from Thailand.

Another reason for this is the truck driver shortage. There aren’t enough truck drivers. Due to economic recovery, there is a rise in demand but there aren’t enough trucks to transport them domestically which is leading to delays. Companies have also seen a rise in freight because of this.

This won’t help local bubble tea restaurants. They weren’t doing well because of the pandemic. And now their sales will go down even more as most of their customers go only for the boba.

Will these businesses ever be able to fully recover from covid?

These are just 2 of the shortages other than the mainstream coronavirus shortages. Canada is facing a bicycle shortage and parts of US is facing shortage of bucatini (a kind of pasta)! How bizarre.