The Surprise Lettuce Crisis Cost Olive Garden's Owner As Much As $5 Million In 3 Months

Despite the increase in sales, Olive Garden is not immune to rising costs. Photo by Steve Helber/AP

Olive Garden lost about $5 million in three months, the parent company's chief financial officer said.
The company is battling a crop disease in California that affects much of its inventory in the United States.
Chick-Fil-A and Taco Bell previously warned customers to expect crop shortages.

Olive Garden's parent company was hit by an "unexpected" lettuce crisis that cost it up to $5 million in the three months to November 27.

In his quarterly call to analysts for the second quarter of fiscal 2023, Darden Restaurants chief financial officer Raj Wennam estimated that lettuce production issues cost between $4 million and $5 million. The company owns Olive Garden, as well as Longhorn Steakhouse and Cheddar's Scratch Kitchen.

Darden has faced rising costs this year, with Venom claiming chicken and dairy costs are up 20% from last year.

The hit to higher prices for lettuce, the staple of Olive Garden's endless salad, came as a shock.

"Although we didn't have the same level of inflation as the general market, it was a big surprise. It's, you say, an impact of $4-5 million per quarter, that's significant “said Venom.

The spike represents a small portion of the company's nearly $2.5 billion in sales over the same period.

Last quarter, Darden raised prices by 6.5% to offset rising costs and managed to increase sales by 9.4%, beating analysts' expectations.

The company was not the only one to encounter a problem.

A crop disease in California's Salinas Valley, known as the salad bowl of the world, has dramatically reduced production and driven grocery prices up to $11 a piece. According to the Bureau of Labor Statistics, seasonally adjusted inflation for the year through November was nearly 20%.

Taco Bell and Chick-Fil-A also warned customers of possible carrot shortages in November.