Blue Friday: Supply chain woes
As we head into holiday shopping season, supplies are falling far short of demand. From raw materials to finished products, the broken worldwide supply chain will deliver a lot of frustration for holiday shoppers. Why are companies suffering this season? This is The N&O’s special report.
America has never before been so consciously invested in the supply chain.
We think about it every time we hit the grocery store and see empty shelves where our favorite products used to be. We read about it, hear about it and talk about it constantly.
We know there are problems all long the supply chain, and our own personal shopping issues could be attributed to different links in that chain.
But still we wonder: What’s the deal with the cat food? Where are the Sun Chips? Why Gatorade of all things?
We hunted around for answers about some of the products we’ve heard people have had trouble finding. Here’s what we learned.
Product shortages mostly vary by region
When we can’t find a product, we assume shoppers all over the country are experiencing the same shortages.
That’s not necessarily the case, says Doug Baker, vice president of industry relations at the Food Industry Association.
“During the pandemic you could identify the shortages: toilet paper, Lysol wipes. Everyone wanted the same things,” Baker said. “And now it’s sort of lifestyle-driven, and that’s why it’s so different as you look at it across the country.”
The specifics of the empty shelves seen by consumers seem to be regional and based on taste preferences, Baker said.
For example, Gatorade.
“The most important flavor of Gatorade to you might be out, but it’s not the most important flavor to me in my part of the country, and I’m having no issues finding what I want,” Baker said.
And even with shortages, we’re still getting most of what we want.
The IRI (Information Resources Inc.) CPG Supply Index uses various data, including daily sales information reported by major chain transactions, to track changes in availability of consumer packaged goods across the U.S. In North Carolina, the index shows product availability at retailers at 89% to 90% through October and into November — on par with the rest of the country.
Baker’s advice to shoppers is to plan out your most important meals and needs, shop early, and be prepared to make substitutions.
“If they don’t have the brand or flavor that you want, that you’re open to substituting with another brand or another flavor,” he said.
And consumers are doing a good job of adapting, he said.
“It’s frustrating to not be able to buy your favorite brand or favorite flavor, and they’ve understood they need to be flexible and allow themselves to buy a brand they might not be used to, or a flavor they don’t typically buy. A lot of people have embraced that and we need to continue that mentality for the next several months.”
Demand is higher, labor force is strained
Baker reminds us that higher demand for products and the shortage of workers are two of the biggest issues driving the supply chain problem.
More of us are still eating more of our meals at home, so we’re shopping for groceries more often.
We’re also “carrying more inventory of food” in our homes than in the past and “maintaining that inventory,” Baker said — which means we’re buying food before we need it, and even though we may still have plenty of food in our homes already.
Why you can’t find cat food, Gatorade and chips
We did some digging around to look for other reasons behind some of the shortages. We also talked to Andy Ellen, president and general counsel for the North Carolina Retail Merchants Association, who gave us additional insight on some of the products on our list.
▪ Pet food: The search for pet food — particularly canned food for cats — can be pretty bleak, especially for pet owners who have finicky pets who only like certain flavors, or who have medical issues that require special or prescription food.
There are several factors impacting the supply of pet food.
- More people adopted pets during the pandemic, so there has been an increase in the demand for pet foods. About 12.6 million U.S. households acquired a new pet between March and December last year, according to the American Pet Products Association.
- The pet food industry has been subject to the same problems as other industries, including an aluminum can shortage and labor shortages. PetSmart acknowledged the product shortage in October, with a statement to The Boston Herald: “We have seen shortages from manufacturers of wet food that have affected our canned food supply in our stores and online.” The chain, which owns popular online pet retailer Chewy.com, said it is working with manufacturers to increase supply.
- The supply chain for pet foods has been stressed the same as for human foods. Reuters reported this summer that reasons for the shortages include “ingredients, raw materials, processing or downtime at different facilities.”
- This last bullet point isn’t another reason for the shortage, but a sad byproduct: the pet food that consumers have been able to find has increased in price up to 20% since the beginning of the pandemic, Reuters reported.
▪ Gatorade: There are multiple issues with Gatorade. On top of what we already heard from Doug Baker about flavor preferences by region, Andy Ellen tells us what he has learned from talking to grocery store operators:
- First of all, summer is the busiest time for Gatorade because it’s hot — kids, athletes and construction workers all drink more Gatorade in the summer, Ellen noted.
- Then you add in COVID, when people were sick and at home and drinking more fluids because they felt bad. “It’s an item getting used a lot more now because of people being sick,” Ellen said.
- Also, many manufacturing plants — including plants that produce Gatorade — were reducing the quantities of flavors they put out for awhile, trying to get more products out the door.
Also, Ellen tells us, there was a problem this year at the Gatorade manufacturing plant outside of Atlanta, so production was off-line for awhile, but they’re back on now.
▪ Crackers, chips and snacks: On top of the increase in consumer demand and other supply chain issues, labor strikes put wrinkles in our snack access this summer.
- In July, a 19-day strike at Frito-Lay disrupted chip supplies briefly. That means some of us may have had trouble finding the exact flavors of Doritos, Cheetos or Sun Chips we wanted. The dispute was over forced overtime and 84-hour workweeks.
- In September, union workers clashed with Mondelez International, the owner of Nabisco, over proposed changes to shift lengths and overtime rules, and that had workers out for a week. (Mondelez also produces Sour Patch Kids and Swedish fish candy, Toblerone chocolate and Halls cough drops — products that are experiencing “limited availability … due to supply chain constraints,” reported CNN.
- There was also a strike at a Kellogg plant that produces Rice Krispies. Kellogg told grocery distributors in October that shipments of Pringles Snacks Stacks, Eggo pancakes and MorningStar Farms plant-based hot dogs and bacon would be “on allocation” (meaning stores would get a percentage of what they ordered, but not all), and that Rice Krispies Treats snacks “will remain below service expectations” through the end of the year, reported CNN. That CNN report did not specifically attribute the shortages to the labor strike, though.
▪ Spices: Ellen said some spices have been in shorter supply this summer and fall, primarily because of packaging problems. CNN reported that a McCormick representative told distributors in September that their U.S. bottle supplier had shut down due to a “COVID-related issue,” and that they had not received bottles for several weeks. Still, McCormick estimated it could ship 70% of what it had previously expected. The issue seems to have improved across the country.
▪ Canned goods and produce: The shortages in some canned goods are because of increased consumer demand and because of an aluminum shortage (which impacts both foods and beverages). Weather disruptions and climate change also impact the global produce supply — a situation that is expected to worsen. And the fires out west this summer, for example, impacted the raspberry crops, Baker told us.
▪ Baby formula: The infant formula and baby food shelves in many stores have also been bare this summer and fall.
Gerber addressed the “temporary out-of-stock situations” in a statement, but offered no reasons for the shortages: “We are adapting and doing everything we can to get parents and families the high-quality, nutritious formula, foods and beverages they need. The teams in our factories and distribution centers are working seven days a week to get more formula, food and beverages to stores.”
Gerber suggested that parents who find no stock in stores speak to the store’s manager to find out when the next shipment is expected to arrive.
This story was originally published November 21, 2021 6:00 AM.