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Bah Humbug! Food Supply Shortages Could Last into Holiday Season

Oct 8, 2021 9:35:00 AM / by FreshByte Software

Food supply shortages could last well into the upcoming holiday season thanks to a combination of supply chain bottlenecks, transportation woes, labor shortages, and product and packaging availability.

CNN reported on Oct. 10, 2021 that “many of the country’s biggest food makers are telling grocers that they will have limited quantities of a number of their products, including items such as Rice Krispies Treats, Sour Patch Kids, some Ben & Jerry's ice cream flavors, McCormick gourmet spices and Marie Callender's pot pies because of labor, commodity and transportation constraints throttling supply chains, according to emails viewed by CNN and interviews with grocers.”

The latest data from IRI, which tracks stock levels at leading grocery stores and other outlets, shows that for the week ending October 3, 2021 the following items were out of stock at stores:

  • Beverages (18 percent)
  • Bakery items (18 percent)
  • Snacks (16 percent)
  • Frozen foods (15 percent)
  • Candy (15 percent)

The food supply shortages are not limited to grocery stores as restaurants and wholes food distributors have been hit with supply issues.

The Great Shortage: Restaurants Face the Squeeze

In the best of times running a restaurant is a tough enterprise. Then the COVID-19 pandemic hit, fundamentally changing the industry overnight with many establishments closing their doors.

For those that survived, the road to recovery has been pot mocked with pandemic-related materials, food, and labor shortages.

Elazar Sontag takes a deep dive into the topic in September 2021 Eater article “The Great Shortage”.

“Anywhere where COVID is spiking or demands have shifted during the pandemic, supply chains have faltered,” writes Sontag.

Sontag’s pins the supply shortage on a variety of issues:

  • COVID outbreaks at meat-processing plants or large farms
  • Not enough drivers to make regular deliveries to restaurants
  • Holdups at ports where materials, supplies and ingredients are offloaded

“COVID has snarled supply chains across the world, and food supplies are no exception,” writes Sontag.

Even those that rely on local farm-to-market sourcing may find it tough to acquire things like dry ice to keep their product fresh.

CO2 Shortage Could Have Impact on Many Products

Rising energy prices in Europe may have a domino effect that will lead to a shortage of certain food products in the U.S. and even make it harder for the food supply chain to keep its inventory fresh.

It starts with major fertilizer plants in Europe shutting down or curtailing operations because of fuel prices. While this has hurt the ability of farmers to grow food, it also had put a dent in worldwide carbon dioxide production.

“The main source of CO2 for industrial uses is from the production of nitrogen-based fertilizers, which produces CO2 as a byproduct,” writes Mark Lorch on Phys.org.

Per Hong, senior partner at consulting firm Kearney, told CNBC that a CO2 shortage could limit everything from carbonated beverages to dry ice which is needed to keep food fresh in transport.

“With curtailed fertilizer production, we almost certainly will be faced with a global shortage of CO2 that is used widely. CO2 is used extensively in the food value chain from inside packaged food to keep it fresher longer, for dry ice to keep frozen food cold during delivery, to giving carbonated beverages (like soda and beer) their bubbles,” Hong said.

Food Supply Shortages: The New Normal?

Sontag argues Eater that food supply shortages just might be the new normal for the restaurant industry.

“We live in a world that, for a lot of reasons, has become very globally interconnected,” Trey Malone, an agricultural and food economist, and an assistant professor in Michigan State University’s College of Agricultural and Natural Resources told Eater. “[Our food supply] is not all one supply chain. They’re all a bunch of linked chains that end up on the same restaurant plate, but they come from different processes.”

This new normal that you might notice on your next visit to your local eatery could include:

  • Slimmed down menu choices due to ingredient shortages
  • Even items on the menu may not be available on certain days
  • Curtailed restaurant hours due to staffing shortages
  • Delayed new restaurant openings due to construction supply shortages

Driver Shortage Slows Down Food Supply Chain

Wholesale food distributors are facing the same issues as the grocery stores and restaurants.

“We are experiencing a labor shortage, Baldor drivers being our biggest need at the moment,” Benjamin Walker, senior vice president at a food provider, wrote in an email to Eater. “We had to move to three times a week delivery schedule in our farthest-reaching delivery zones.”

Driver shortages could be the biggest issue this holiday season.

International Milk Haulers Association (IMHA) executive director Cherie Hime said the organization surveyed members and found that companies had lost anywhere from 5 to 15 percent of their drivers.

“COVID really developed quickly in our world of getting things delivered,” IMHA president Brandon Johnson said. “The pool of where they can go for a workforce got diluted extremely quickly by Amazon hiring, UPS hiring, FedEx hiring more.”

Making matters worse is that many truck drivers are in their 50s and nearing retirement age and there has been a lack of younger drivers entering the workforce.

“There’s been a structural shortage of drivers for quite some time now. But it was exacerbated by the pandemic,” Dave Pfiffner of Des Moines Area Community College Transportation Institute told his local ABC station. “We’re still recover from that.”

Bottom line is that there may be more product to move than drivers to move it this holiday season.

“So the industry's been really trying to recruit, and, and hire new drivers at high rates, but it's it's very hard to find them at this point," Pfiffner said. “I think the average age of an over-the-road truck driver right now is something in the mid-50s. So it's a very gray fleet, as you might call, so there's a lot of people retiring,"

Contact FreshByte Software today to find out how we can help your wholesale distribution business in these demanding times.

Tags: Inventory

FreshByte Software

Written by FreshByte Software

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