Due to poor crop yields caused by climate change and rising production costs, the food service industry is facing instability in securing food ingredients. In particular, hamburger brands are under increasing cost pressure as the prices of ingredients such as tomatoes rise. Some companies are responding structurally by adjusting menus and raising prices.
Tomato Contract Price Up 30%... Supply Disruptions from Last Year's Heat Wave
According to the distribution industry on the 9th, Burger King, McDonald's, and Lotteria signed contracts with food ingredient suppliers for this year's fresh tomato prices at nearly 30% higher than last year. Although the current wholesale price has dropped by 30% year-on-year to 29,000 won per 10kg, the annual contract price has increased due to unpredictable crop yields caused by abnormal weather. This reflects the poor tomato growth during last summer's record heat wave.
In fact, as of October last year, the wholesale price of tomatoes soared to 80,000 won, a jump of over 60% compared to four months earlier. As a result, food service companies reduced or even excluded tomatoes from their offerings. Sandwich brand Subway reduced the number of tomato slices in its 15cm sandwiches from three to two, while bakery brand Tous Les Jours raised the supply price to franchisees by 30%.
Hamburger brand McDonald's sold some menu items without tomatoes. A representative from a burger franchise said, "Ingredient suppliers set contract prices based on annual crop forecasts, production costs, and the impact of abnormal weather," adding, "Last year's record heat wave disrupted supply, which led to this year's price adjustment."
Full Dependence on Domestic Fresh Fruits and Fruiting Vegetables
The problem is that stabilizing supply through tomato imports is also difficult. Under the Plant Quarantine Act, the import of fresh tomatoes, oriental melons, apples, and other fresh fruits and fruiting vegetables is prohibited, so the industry relies entirely on domestic produce. This measure is intended to prevent the introduction of foreign pests and protect domestic crops. Except for Japan, importing tomatoes from overseas is not possible, and even if imports are allowed, the import risk analysis process alone takes an average of more than eight years, making a short-term solution virtually impossible. The industry also explains that Japanese tomatoes are not competitive in price, making them difficult to use.
The import risk analysis consists of eight steps: request from the exporting country, initiation of import risk analysis procedures, preliminary risk assessment, individual pest risk assessment, development of risk management measures, drafting of import approval standards, public notice of draft standards, and promulgation/effectuation of import approval standards. The duration of this process varies depending on factors such as product characteristics, pest distribution, and the speed of intergovernmental negotiations.
Industry voices are calling for increased supply through imports to address climate change and consumer welfare. However, concerns remain about the potential collapse of the domestic farming base. A hamburger industry official emphasized, "Prices soar from August to November, when crop yields are poor," and added, "The same situation repeats every year, so the government needs to develop policies to stabilize prices."
Hamburger Prices Rise... Some Menus Without Tomatoes
As uncertainty in ingredient supply recurs every year, the food service industry is responding with price adjustments and product diversification strategies. KFC, Lotteria, McDonald's, No Brand Burger, and Burger King have recently raised product prices by 100 to 300 won.
New products that exclude high-risk ingredients are also being launched. Lotteria is avoiding supply issues by introducing items such as 'Napoli Matpia Mozzarella Burger', 'Ojingeo Alive Burger', and 'Bulgogi Poten Burger', all of which are made without tomatoes. Strengthening premium products is another strategy. McDonald's is boosting profitability by adding patties to popular menu items such as the 'Double Quarter Pounder Cheese Burger', 'Double 1955 Burger', and 'Double McSpicy Shanghai Burger', creating a high-priced lineup. The prices of these products have also increased by about 30% compared to previous versions.
A food service industry official said, "In the past, we responded to temporary price fluctuations, but now ingredient supply uncertainty is recurring," adding, "It is necessary to establish a cost management strategy from a mid- to long-term perspective, considering climate risk as a structural variable."
