From Flour to Canned Soup, Coronavirus Surge Pressures Food Supplieshttps://www.wsj.com/amp/articles/coronavirus-surge-challenges-struggling-food-supply-chains-11594546200Food makers work to meet rising demand after initial lockdowns ate through inventories
Grocers are having trouble staying stocked with goods from flour to soups as climbing coronavirus case numbers and continued lockdowns pressure production and bolster customer demand.
Manufacturers including General Mills Inc., Campbell Soup Co. and Conagra Brands Inc. say they are pumping out food as fast as they can, but can’t replenish inventories. Popular items such as flour, canned soup, pasta and rice remain in short supply.
As of July 5, 10% of packaged foods, beverages and household goods were out of stock, up from 5% to 7% before the pandemic, according to market-research firm IRI.“We are running flat out,” said Conagra’s Chief Executive Sean Connolly. He said Conagra won’t be able to build up inventory of certain brands, such as Chef Boyardee and Healthy Choice, unless demand slows or it further increases manufacturing capacity.
Food makers and grocers expect prolonged shelter-in-place orders and restrictions on restaurants, as well as the battered economy, to result in a longer stretch of eating at home. Added safety measures at plants are slowing operations, too. There is enough food in the U.S. to keep people fed, executives say, but every product might not be available everywhere while inventories are strained.
Many retailers in states where cases are surging, including Texas-based H-E-B LP, are reinstating rationing on high-demand items including paper products. They say their distributors are still capping the amount of fast-selling products that can be ordered at one time.
In mid-March, flour sales soared 233% from a year earlier, according to market-research firm Nielsen and remained 25% higher in June than the prior year.
Mark Griffin, president of Nebraska-based B&R Stores Inc., said the chain would be in worse shape if cases rise again in the Midwest because it lacks the inventory it had in March. B&R has been stockpiling bottled water and other products at its warehouses, he said. The grocer has also tried to secure new suppliers for canned products, baking items and ramen noodles. So far, that has only yielded a truckload here and there, Mr. Griffin said.
Soup is particularly hard to source, he said: “There’s no plethora of manufacturers available.”
Campbell’s CEO Mark Clouse said the company ran through reserves of its namesake soup and snacks such as Pepperidge Farm Goldfish crackers during the initial rush of orders in the spring. That demand was a shock to a supply chain that had been largely recalibrated to handle flat or falling demand over the past decade, he said: “We’re racing to try to rebuild some inventory.”
... Wisconsin-based grocer Festival Foods is receiving about 80% of the goods it orders and is removing some products from shelves to make room for roughly double the toilet paper it normally stocks, said Chief Executive Mark Skogen.
... Farmer Direct Foods Inc., a Kansas flour mill and supplier for King Arthur, is filling about 35 trucks a month with flour, up from 18 typically.
The mill has run out of packaging at times, said CEO Bob Morando, and equipment has broken down because he added a shift and hasn’t had time to do preventive maintenance.
