While Hurricane Milton’s impact was not as severe as predicted, businesses are still grappling with the effects of Hurricane Helene along the Southeastern US. From local restaurants to food manufacturers, hurricanes have the potential to disrupt operations for weeks or even months. The damage from storms extends far beyond property, affecting supply chains, revenue, and long-term business survival. Star Fish Company (a family favorite in Sarasota) remains temporarily closed following significant damage from Helene and Milton’s aftereffects.

 

Property Damage: The Immediate Aftermath

The most obvious and immediate effect of hurricanes is physical damage. Restaurants and manufacturing facilities alike can suffer structural damage, loss of equipment, and ruined inventory. After Hurricane Helene, many businesses reported severe losses of perishable items due to extended power outages. According to the National Restaurant Association, the cost of repairs for a restaurant can easily reach tens of thousands of dollars. This leaves many small businesses at risk of permanent closure, especially if insurance coverage falls short.

 

Supply Chain Breakdown: The Invisible Disruption

Even if facilities survive, supply chain disruptions can wreak havoc on operations. FEMA reports that hurricanes often lead to road closures, port shutdowns, and power outages, all of which prevent the timely delivery of goods. For food manufacturers, these delays mean production halts and unmet orders, while restaurants may be forced to operate with limited menus or shut down temporarily due to a lack of ingredients. Perishable goods are particularly vulnerable, as refrigerated transportation becomes impossible without electricity. This ripple effect can damage business reputations and further delay recovery.

 

Revenue Loss: Long-Term Financial Impact

Hurricanes also cause significant revenue losses, both during the storm and in the weeks afterward. As residents focus on repairing their homes and lives, spending on dining out and non-essential goods drops dramatically. Tourist-dependent areas are hit especially hard. According to the National Restaurant Association, restaurants in areas reliant on tourism often face months of slow recovery as visitor numbers dwindle post-hurricane. The financial blow isn’t limited to small businesses either. Food manufacturers may face order cancellations and longer-term contractual penalties due to delays, further compounding revenue losses.

 

Insurance Gaps: Coverage Challenges

While insurance is supposed to be a safety net, many businesses find it lacking after a major hurricane. NOAA highlights that flooding, one of the most common and devastating effects of hurricanes, is often excluded from standard business insurance policies. After Hurricane Helene, several business owners found themselves without coverage for flood damage, leaving them responsible for significant out-of-pocket costs. The Insurance Information Institute also points out that claims processing for flood damage can be slow, delaying crucial funds needed for recovery. For businesses operating on tight margins, such as restaurants, this can lead to longer closures or even bankruptcy.

 

Preparing for Future Hurricanes and Other Natural Disasters

It’s critical firms create a comprehensive emergency preparedness plan that addresses securing property, communicating with staff and customers, and ensuring supply chain continuity. One effective strategy for is to establish relationships with multiple suppliers. We advise our clients to consider having alternative sources for essential ingredients or materials can help businesses avoid disruptions if one supplier is impacted by the storm. Operators should also review their insurance coverage to confirm that it includes flood protection and invest in backup generators to protect perishable goods during power outages.

 

Foodservice IP’s Take

Once the storm has passed, it’s essential for businesses to evaluate their response and adapt their strategies for the future. Foodservice IP encourages businesses to conduct thorough assessments of their operations after each hurricane to identify what worked and what didn’t. This iterative process allows restaurants and food manufacturers to refine their emergency plans and improve resilience.

 

Tim Powell is a Principal with Foodservice IP, a professional services firm based in Chicago, aimed at delivering ideas for managers to guide informed business decisions. To learn more about FSIP’s Management Consulting Practice, click here.

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