Why the Food Supply Chain Is Strained

The COVID-19 pandemic has taken a toll on many U.S. industries, and the food industry is no exception. In particular, food supply chain and safety issues have mounted as the pandemic has worn on.

“Food manufacturers have had to juggle a lot, including maintaining a sufficient number of qualified workers, having raw materials available, and meeting increasing demand for products,” says Martin Bucknavage, MS, MBA, CFS, senior food safety extension associate and program team leader of industrial food safety and quality in the department of food science at Penn State University in University Park.

Workforce availability has been among the biggest challenges. “Initially, there were worker absences as well as facility shutdowns related to COVID illnesses or prevention,” Bucknavage says. “Now, facilities are facing worker shortages due to hiring difficulties along with higher turnover levels.”

Raw material availability is another huge challenge for many companies, because specific ingredients can be difficult to obtain. “Again, workforce availability is the driver,” Bucknavage says. “This impacts a company’s production scheduling and forecasting.”

Many logistical issues also exist, whether it’s delays of imported goods getting unloaded at shipping ports or trucking issues impacting the movement of raw materials or finished products, Bucknavage says.

Consequences

As a result of the pandemic, labor shortages have occurred at many stages of the farm-to-table process, including at production, food safety, quality assurance, and supervisory/management levels. “This could result in a regression or de-prioritization of food safety culture, which inevitably results in more product contamination events and product recalls,” says Steve Kluting, Esq., national director of product recall for food and agribusiness at Gallagher, a commercial insurance and risk management firm in Grand Rapids, Mich.

Food manufacturing facilities have had to increase wages to retain and attract workers, says Glenn Drees, CSP, CPCU, managing director of food and agribusiness at Gallagher in Cincinnati, Ohio. Shipping and logistics costs are expected to keep rising in 2022. In some instances, certain products are unavailable or are in short supply. All of these costs are passed down throughout the supply chain, resulting in higher consumer prices.

John L. Kent, PhD, clinical professor of supply chain management at Walton College of Business at the University of Arkansas in Fayetteville, anticipates a lack of consistency. “Order size variation from anywhere in the supply chain, including purchases by end consumers, creates a bullwhip effect, with peaks and valleys of inventory,” he says. “Prior to 2020, supply chain professionals had almost perfected most of the farm-to-fork food supply chains. Other than weather, a strike, or food safety recall, not much variation occurred because well-managed supply chains with trusted partners were established.”

Another effect of the pandemic has been that many food companies have had to reformulate certain foods and haven’t been able to produce certain SKUs because they couldn’t obtain some ingredients from international sources, says David Acheson, MD, former associate commissioner for foods and current CEO and president of The Acheson Group, a global food safety and public health consulting team based in Bigfork, Mont. In particular, China, a significant supplier, experienced many logistical issues and labor challenges due to COVID-19.

Furthermore, many ships outside of major ports such as Los Angeles and Long Beach, Calif., were unable to get to port and unload due to pandemic-related issues, Dr. Acheson says.

Ensuring Product Availability

So how can a food manufacturer guarantee that there’s a sufficient supply of their product? According to Dr. Acheson, food companies should avoid having a sole source supplier whenever possible. “If a sole supplier has a problem such as a labor shortage or breakdown at their facility, a manufacturer that needs that product will be in a pickle,” Dr. Acheson says.