“Supply chains are convoluted,” explains Wendy White, a nationally known food safety and supply chain expert who works with the Georgia Manufacturing Extension Partnership at Georgia Tech. Before joining academia, White spent 17 years focused on safety and regulatory compliance in the food manufacturing and distribution industry.
“Formulated foods encompass a lot of ingredients, and shortages can be caused by breaks in the supply chain for any of those ingredients,” she says.
These issues are not always apparent to the public, but we may feel the effects. Supply chain concerns can mean grocery stores aren’t getting shipments on time, and manufacturers don’t always have all the ingredients needed to make their products.
“We have a large global market, and shipping something from another part of the world has become so easy for us in this day and age. Sourcing cheaper and different ingredients from different parts of the world has become commonplace,” says White. “Now, we’re seeing bottlenecks in the shipping and logistics segments of our food supply and it becomes apparent how we sometimes are reliant on those imports.”
So what can shoppers expect and how can they be prepared this holiday season? White, who watches the food industry closely, shares her insights.
Don’t freak out
White says the American food industry is robust and resilient. Throughout the pandemic, manufacturers have had to continuously pivot, and have done so with surprising success.
“We are lucky to have a wide variety of raw agricultural products here in America the breadbasket in the Midwest, or tropical climates in California and Florida where fruit can be grown. We’re not quite so dependent as other nations on foreign imports,” she explains.
While there will be some changes in prices and availability, there’s no need to panic, White says.
Expect higher prices across the board
According to White, there are two primary drivers of price increases right now: labor shortages and higher transportation costs. This isn’t limited to the United States, the United Nation’s FAO (Food & Agricultural Organization) Food Price Index states that across international markets, we’re seeing the highest food prices in 20 years.
Domestically, some food manufacturers are having trouble staffing their facilities. To attract workers, they increase wages, which in turn increases price tags on products. Also, when oil prices rise, the cost of transporting products to stores increases. That gets passed on to the consumer at the grocery store as well. White says that while prices will go up, she’s optimistic that it won’t be enough to break the bank.
Buy your turkey now
If you’re hoping for fresh turkey, your chances may be slim. So White advises to go ahead and buy a frozen turkey in the week leading up to Thanksgiving.
“U.S. stockpiles of frozen turkeys are down to about 100 million pounds from a normal level of 130 million pounds,” says White.
She also says about 90% of what you’ll see in the grocery store as “fresh” turkey will be previously frozen anyway. White says you should expect to pay about 20% more this year for turkey due to labor shortages and increased fuel costs transporting the product. Add in a Midwestern drought that has caused the price of feed to skyrocket, and that means more costs passed on to the consumer for a Thanksgiving bird. If you’re hoping to find a smaller bird or boneless breast meat, White predicts we may see a run on those specialty products.
Watch out for specialty items, especially from abroad
The challenges of unloading and shipping items at many of America’s ports will affect the food industry. “We’re going to see some disruptions with food ingredients and components that are only available overseas,” says White.
Specialty products that are typically imported may be more difficult to find, or more expensive. Think imported Parmesan cheese or cinnamon shipped from Sri Lanka. Often these products are transported by ships, and congestion and backups at America’s ports may mean delays or scarcity. “The backlog of imports is being caused by labor shortages are the dock and lack of truck drivers for distribution. This backlog isn’t expected to return to normal until the middle of next year,” explains White.
Sometimes a shortage is created by frenzy
“We had a run on paper goods during the heat of the pandemic,” White explains. “There was no shortage in supply. This was a fabricated increase in demand.” A rumor circulates that may send people running to the grocery store and hoarding products. “It’s hard to predict what the next crazy in-demand item is going to be that works consumers up into a frenzy and artificially inflates demand.”
Right now, White says, the food supplies are there, but there are complications with processing, packaging, and transportation capacity to meet rising demand. Some spice companies like McCormick have announced a shortage of glass bottles, meaning their gourmet spices are on hold right now. A drought in the Midwest has wheat prices soaring. Some meat and poultry plants aren’t operating at full capacity due to fewer employees on hand and fewer truckers available to transport items.
Food companies are preparing for the holidays
“The food and beverage industry is versatile and very good at contingency planning,” White says. Turkey companies are processing birds and freezing them now to build up a surplus in anticipation of demand. Many companies are holding extra inventory keeping three or four months of supply on hand instead of the more typical one or two months.
White describes the versatility of the American food manufacturing industry as “incredible.” She says this may mean consumers will see different types of packaging or different products this holiday season as companies pivot to handle supply chain issues. How might consumers see this? Fewer boneless, cured, or smoked hams, for example, where processing companies had fewer employees available to do the extra processing work.
To save costs, be flexible if you can
If you’ve got time to shop around, check different retailers and grocery stores in person.
“They are continuing to use specials and deals to entice shoppers,” White says. “During the pandemic, many shoppers making grocery purchases online have actually been spending more because it’s a bit more difficult to make selections by brand.”
By perusing a store shelf in person, you may see six different types of canned green beans and you can choose a store brand or a lower-cost item to save money.
Buy shelf-stable items such as canned cranberry sauce, boxed stuffing, and pumpkin pie filling ahead of time if you are feeling concerned. Planning in advance will help you make sure you’re not part of a last-minute, frantic search if supply chains become more disrupted than they already are.
Source: Newswise
