How food logistics companies can increase supply chain efficiency during coronavirus

One of the biggest concerns about coronavirus in today’s environment is food supply. While food manufacturers, retailers, and others in the food and beverage industry have remained adamant about their commonly shared assessment that there’s no danger of a food shortage in the United States, all eyes have been on the food supply chain. In the midst of manufacturer shutdowns and steady (high) demand for groceries, keeping food supply chains intact has become critical.

A few stats about this essential industry:

• There are over 200,000 registered food manufacturing, processing, and storage facilities in the Food and Agriculture Sector

• The Food and Agriculture Sector is responsible for about 20% of America’s economic activity

• Food distribution centers process 95% of our nation’s food before sending it on to grocery outlets

Food companies that catered to bars and restaurants pre-pandemic have risen to the challenge of serving grocery stores during the crisis, an undertaking that’s called for them to shift supply chains from business-facing to consumer-facing in a very short period of time. With significant investments of time and capital, food manufacturers have made their warehousing, logistics, and purchasing processes ready for retail.

To understand the impact of coronavirus on food manufacturing, let’s examine the panic-buying trends of the last six weeks. It didn’t take long after the start of COVID-19’s spread in the U.S. for consumers to clear supermarkets and drugstores of food products, like rice, baking products, and canned goods. This spike in demand prompted retailers to place orders for unusually large quantities, which overloaded food manufacturers and caused them to prioritize necessities.

In the next two weeks, we saw an all-time high of replenishment freight. Authorities ordered bars and restaurants to close, and grocery stores experienced increases in traffic. It wasn’t a seamless transition; the pandemic exposed gaps in the food and beverage supply chain and provoked some grocery retailers to engage in price gouging. Authorities were quick to create websites, email inboxes, and hotlines for consumers to tip them off to instances of price gouging. 

Towards the end of March, experts confirmed that panic-buying was exacerbating supply chains and warned consumers to stop, for fear empty shelves would become commonplace. Mark Cohen, Director of Retail Studies at Columbia Business School and the former Chief Executive of Sears Canada, said, “We’ve whittled down the inefficiencies to the point where logical and orderly demand creates logical and orderly resupply. But this is a different situation: This is serial hoarding — and no part of the machine that supplies consumers is geared for this.”

The jump in demand as a result of coronavirus illuminated the problem of restocking items just in time: Supply couldn’t keep up with demand and stores either sold out of certain products or were forced to ration them.

On April 1, the market took a turn; the effects of non-essential business closures and economic factors began catching up to the market and aggregate demand slowed. However, the demand for groceries like packaged foods and meats remained steady, highlighting the importance of keeping supply chains intact.

Now, two weeks into April, there’s still plenty of uncertainty, but consumer panic has dissipated. Expanding partnerships and staying flexible, among other tactics, have helped food manufacturers meet demand. Their supply chains, while stretched, haven’t cracked because carriers have been able to deliver freight. In fact, a Los Angeles Times article notes that “food transportation from packing facilities appears to be operating well, a sentiment confirmed by large food shippers…

CREDIT : FLOCK FREIGHT 

ABOUT US :

Mehfill Indian Cuisine is an authentic Indian restaurant in Canada. We are a teamwork of Mehfill Restaurant, which aims to promote Indian buffet. We believe in serving our guests with a classic choice of the Indian subcontinent’s most exclusive dishes. When it comes to using condiments and flavours, our spices are hand-picked, dried and well-grounded by the Chef. We ensure a balance in the flavours, which gives our cuisine a unique taste.