Caribou Coffee Prepares for the Worst and Stocks Up on Supplies

(Bloomberg) -- Restaurant chain Caribou Coffee Co. is buying extra coffee beans, chocolate and packaging as supply disruptions continue to fuel inflation.

“We continue to increase safety stock on key items,” Chief Executive Officer John Butcher said in an interview. “Cups, lids, chocolate and coffee are the things that come to mind that we’ve increased safety stock on.”

Caribou, part of the newly formed Panera Brands, has also had trouble getting straws and hot-sauce packets, he said. The company, which has about 450 U.S. locations, is looking to expand with a new domestic franchising program that includes a scaled-down restaurant prototype that’s only a third the size of a typical location. But construction costs have risen about 10% from last year.

“My gut tells me to hope for the best and to prepare for the worst. I personally don’t see any reason to believe that supply-chain disruptions are going to go away anytime soon,” Butcher said. “Everybody is in the same boat: They’re hopeful that things will improve by the end of 2022. But for now we have to prepare as though they won’t.”

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