“Supply Chain Disruptions and Food Waste”
Tuesday, March 22, 2022
During the last two years, supply chains have been thrust into scramble mode, as various world events disrupted supply and demand patterns like never before. The global COVID-19 pandemic, resulting labor shortages, and, more recently, the war in Ukraine have upended the status quo, leaving corporations and consumers wondering where some of their favorite items have gone.
The food supply chain has been in the middle of it all, with products from chicken wings to ketchup cups not making it to shelves. For people wondering when things will return to normal, the answer, according to Eric Woods, Corporate Officer and Vice President of Field Operations at Sysco (and a ReFED board member) is, “Decades, not years.” While he is optimistic that there will be modern technologies developed to address the supply chain issues, such innovation will take some time. “The world adapts,” he said. But how it adapts and how long it takes is uncertain.
Woods joined Linda Dunn, Faculty Director from the Georgetown University School of Continuing Studies’s Supply Chain Management Program, and Dana Yost, Director of Product Sourcing at The Community Food Bank of Southern Arizona, to speak with ReFED Executive Director Dana Gunders about how world events have caused these supply chain breaks, what can be done to remedy them, and what impact they will have on the fight against food waste – now and in the future.
In general, people know that the global COVID-19 pandemic is to blame for many disruptions, but what exactly are the problems that were set in motion by that? The food supply chain is vast, extraordinarily complex, and often highly specialized, meaning that there are many different and frequently interconnected problems. Broadly speaking, our experts pointed out three significant issues:
- Imbalances in demand. The pandemic dramatically changed buying patterns overnight. People were no longer eating out as much, and they were buying more from retail outlets. When people were ordering from food service outlets, it was take-out, and from places closer to home. This made it difficult for the highly specialized food supply chain to adapt. “Breaker eggs” (sometimes called “liquid eggs”) are a good example. Not often sold in retail, breaker eggs are a staple in the foodservice industry. Suddenly, there were not enough buyers in that sector, and because of food safety processes like inspections being different, selling breaker eggs to the grocery store instead of the diner was not something that could be rapidly switched. Furthermore, by the time the industry adapted to one scenario, things changed again, as COVID waves surged and subsided.
- Employee and labor shortages. This was felt by many sectors across the food supply chain. Restaurants, processing facilities, transportation sites, and everywhere in between dealt with some type of labor disruption. Whether it was temporary leave for sick people, or longer issues spurred by phenomena such as “the Great Resignation,” a steady workforce has been hard to come by. These organizations have been doing the best they can to fill the gap in creative ways, like The Community Food Bank of Southern Arizona partnering with the National Guard to fill in for volunteers that were no longer able to show up.
- Trucking backlog. Related to issues of labor and instability, the U.S. has been amid a massive shortage of truckers for many years, even prior to the pandemic. Right now, there is a gap of approximately 80,000 truckers. Dana Yost shared that there is currently one driver per 12 refrigerated truck, or “reefer,” loads in the US. While the pandemic did not start the trucker shortage, it certainly exacerbated it, and it will continue to be a challenge moving forward.
These issues and more have led to the problems we have seen over the last two years. And while there is no hard data on the cumulative effects of the pandemic on food waste, there is anecdotal evidence that supply chain disruptions have put more food at risk of being wasted – after all, cows are still producing milk and produce is still growing regardless of whether distribution channels are operating properly. In Nogales, for example, 6.6 billion pounds of produce is being imported from Mexico each year. Freshness is always prioritized, so if the trucks back up at the distribution facility, inevitably yesterday’s harvest is jeopardized. Additionally, when food service outlets change orders due to unpredictable demand, larger suppliers like Sysco are generally able to move that product to another outlet, but smaller suppliers may not have that kind of adaptability.
Considering the domino effects of one problem leading to another, solutions are not easy, which is one reason experts expect the current status quo to continue for some time. Acknowledging that there are no quick fixes, several solutions are being researched and implemented across the industry.
- Taking control of the supply chain. For large companies like Sysco, this is less of an issue, as they already own and operate many of their supply chain assets. Smaller operations have focused on creating regional partnerships, like Yost’s Community Food Bank in Nogales, AZ, which has partnered with food banks in El Paso and Las Cruces, among others. Moving towards internal management of supply chains is something many operations are implementing.
- Reimagining the trucking profession. Long hours, little pay, operating complicated machinery, and being away from home a lot make it a tough profession. There are many efforts underway to make the trucking profession more attractive. Primarily, wages are rising and will continue to do so until the supply catches up to the demand. Sysco has started its own training program for truckers, focusing on bringing in more women, who make up just 7% of the industry currently. Improved infrastructure like dedicated freight lanes and technological improvements like automated driving are expected to also help bring in more talent.
- Focus on risk management and adding agility. “Don’t focus on pennies at the expense of dollars,” Dunn said. She emphasized the need to have plans in place ahead of time to minimize disruptions when they happen. The ability to pivot is crucial. Some examples of the industry being agile include QR codes in restaurants that allow menus to be changed quickly depending on what products are on-hand. The Community Food Bank of Arizona started making produce boxes to facilitate last-mile delivery to rural or homebound populations.
Acknowledging that business impacts are always secondary to humanitarian ones, it is still important to examine what changes might occur due to the tragedy unfolding in Ukraine right now. While it is impossible to measure the long-term impact that the war will have on the global food supply chain, ripples are already making their way through the system. With wheat futures at an all-time high, mass shortages of new equipment such as tractors and computer chips, and an unstable oil market, the unfortunate reality is that people everywhere will be feeling the effects of this tragic war for decades. As the world experiences more supply chain uncertainty, one thing is clear, as Woods stated – “Waste is not an option.”