As the pandemic exploded in the US over the winter and into the spring, weak points in the food supply chain became all too clear. Bottlenecks and shortages became increasingly common in the early days of the health crisis, even though the nation was still overflowing with food.
Wholesalers who were used to selling 80lb boxes of beef or bulk vegetables to their foodservice customers struggled to adapt their business to provide smaller portions in consumer-friendly packaging. As restaurants, hotels and school cafeterias shut down, crops rotted in the fields and farm animals were euthanized.
Despite the overwhelming damage the pandemic has caused, it has nonetheless provided us a valuable, real-life lesson in what could, and did, go wrong and how we can effectively plan for the next emergency. To achieve a truly agile food supply chain that is flexible enough to respond to shifting supply-demand scenarios, the food industry faces the three main obstacles.
Fresh food is highly perishable by its very nature, and it’s crucial that the supply chain efficiently gets the product to market. The food and beverage industry doesn’t lend itself to quick adjustments when conditions throw supply and demand off balance.
In agriculture, producers must be prepared to freeze or otherwise process a product to maintain its quality. In times of crisis, finding a nearby processor may be difficult. To help ensure a product is eaten and not thrown away, having access to processors that can extend the life of a product is invaluable.
Transparent data would allow both producers and wholesalers to anticipate glitches in the supply chain. For the most part, this step is largely ignored on both the supply and demand side. Since producers don’t share their information routinely, the market doesn’t know how much of any product will get to its final destination.
Aside from Thanksgiving or Christmas when retailers know, for example, that the demand for turkeys will surge, it’s not easy to predict how much demand there will be of a given product. For situations like the COVID-19 lockdowns, which dramatically shifted the supply-demand paradigm, it’s a perfect storm.
3. Specialization and Centralization
It’s difficult for supply chains to quickly pivot and change distribution strategies since they have grown so specialized and rigid. Since 98 percent of all leafy greens, for example, are grown and processed in the Yuma, Arizona and Salinas, California regions, centralizing production poses certain challenges. If the centralized supply chain experiences the disruption of a pandemic or wildfire, that means the entire nation faces the consequences.
Embracing local food production would be another benefit of an agile supply chain, integrating those products more seamlessly into the supply chain and saving on the energy and time involved in long-distance hauling of food. The packaging dilemma also needs a solution, as products packaged for wholesale clients won’t easily translate to the direct-to-consumer market. At the same time, wholesalers don’t want food packed in small portions.
Creating a more agile responsive food system by addressing these three obstacles could make a significant difference. A supply chain that addresses perishability, data and centralization and specialization would be flexible and adaptive to unexpected disruptions and keeps food waste to a minimum.