Frying oil is strategic for Lunch Garden – Companies

While brewers see the catering industry recover better than expected, the restaurant chain warns of a difficult 2022. Lunch Garden is hoarding one of its critical ingredients, frying oil.

The restaurant chain reports a number of reasons why this year – after the very serious pandemic years 2020 and 2021 – can be difficult. The market is “very volatile”, the board writes in the annual report, dated 28 April, with the balance sheet figures for 2021 for the umbrella nv Lunch Garden Holding (see balance sheet figures below). First, there is “very high inflation”, which leads to increases in the price of raw materials, labor, energy and rent. Second, Russia invaded Ukraine on 24 February. This exacerbated the already significant disruption in the supply of essential raw materials. More than a quarter of the world’s wheat comes from Ukraine and Russia. The two countries supply …

The restaurant chain reports a number of reasons why this year – after the very serious pandemic years 2020 and 2021 – can be difficult. The market is “very volatile”, the board writes in the annual report, dated 28 April, with the balance sheet figures for 2021 for the umbrella nv Lunch Garden Holding (see balance sheet figures below). First, there is “very high inflation”, which leads to increases in the price of raw materials, labor, energy and rent. Second, Russia invaded Ukraine on 24 February. This exacerbated the already significant disruption in the supply of essential raw materials. More than a quarter of the world’s wheat comes from Ukraine and Russia. The two countries supply four-fifths of the world’s sunflower oil production. Lunch Garden has therefore built up additional stocks of these essential ingredients. From frying oil for example made on the basis of sunflower oil. Of course, this extra supply also leads to price increases. ‘Lunch Garden stocks strategically important products for which there are no alternatives, such as cooking oil. The reason behind this is simple: Lunch Garden can not offer the mussels without fritters, “says spokesman Wannes Feijtraij. Thirdly, the question is whether consumers continue to go to restaurants? Lunch Garden sees two effects. In other words, consumers choose the restaurant chain’s ‘price-quality proposal’. Or the price-conscious consumer gives up. Fourth, despite the economic uncertainty, the labor market remains very tight, especially in the hotel industry. Vacancies are difficult to fill. This can lead to higher salaries and / or understaffing in some restaurants. As an added bonus, the restaurant chain reports that “the issues surrounding the covid-19 crisis are still unresolved”. A resurgence could lead to new restrictions in the hospitality industry. The financial year 2021 was still heavily plagued by the pandemic. The restaurants remained closed until June 9 last year. New restrictions followed in October and November last year: the vaccination pass for restaurant visits, the recommended or compulsory homework. These factors had a very strong influence on the Lunch Garden. This will result in loss figures for the chain with its 64 restaurants in 2021. Also 2022 would not show a full recovery. In a conversation with Trends in mid-February, CEO Ann Biebuyck was hoping for a turnover for this year of 94 million euros. In 2019, the company’s turnover amounted to 107.5 million euros. Read more under the table The main shareholder in the restaurant chain is the British listed lender Intermediate Capital Group (ICG). ICG has been providing shareholder loans to Lunch Garden since 2019. In April last year, ICG became the main shareholder. Last year, Lunch Garden received 8.5 million euros in additional resources. “ICG did not anticipate this situation, of course. It continues to support us. But we need to call a cat a cat. We need to get back to 80 to 90 percent of 2019 sales as soon as possible, said Biebuyck in an interview with Trends in February Lunch Garden receives no credit from the Belgian banks. The balance sheet of the consolidating Lunch Garden Holding only shows shareholder loans amounting to 34 million euros by the end of 2021. “We would very much like to be more entrenched locally. But today there is a huge fear among banks for everything that has to do with catering,” Biebuyck said in February in Trends.

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