Burger King, Popeyes owner says labor shortage is driving up beef costs

The owner of Burger King and Popeyes expects U.S. beef costs to climb this quarter as labor shortages across the country make it tough to staff meatpacking plants, according to an internal document.

Restaurant Brands International Inc., which owns the Tim Hortons chain as well, also sees higher costs for key ingredients including pork that it uses for sausage and bacon, the company said in a July report that was viewed by Bloomberg News. According to the document, stimulus checks in the U.S. are reducing incentives for meatpacking workers to show up.

Labor shortages are adding to the challenges for the meat supply chain already grappling with higher feed costs for cattle and hogs, as well as swelling demand for meat from grocery stores and reopened restaurants. Burger King, which has more than 18,000 locations globally, uses beef for its Whopper hamburger patties, while Popeyes uses tallow to fry some of its items. Tim Hortons sells pork bacon and sausage.

“Commodity price inflation continues to be a hot topic, particularly for proteins,” the company said in the report. “Labor shortages in meatpacker facilities and food-service locations in the U.S. add to the upward pressure in prices.”

The company said in an emailed statement that it has a long-term approach to managing and smoothing out commodity fluctuations. “We have a number of strategies to mitigate cost increases and as a practice, we don’t talk about those for competitive reasons.”

Restaurant Brands shares slipped 1.3% at 1:55 p.m. in New York. The stock rose 6.7% this year through Monday, trailing the broader market.