A big takeaway from the COVID crisis is that food businesses must proactively ensure that their suppliers all along the supply chain are prepared and resilient. We saw firsthand what happened when the world wasn’t prepared for a global crisis, and we were shocked by the product shortages, supply chain disruptions, and rising prices.
Now that we’ve navigated a global pandemic, we’re facing a perfect storm of crises that are negatively impacting our food supply:
Climate change is drying up the Colorado River and Lake Mead—the main water sources for food crops in Arizona and California—and they could soon be out of water. California usually grows an abundance of produce, but extreme drought conditions are making it difficult to farm as usual, and will have a significant impact on these crops. Meanwhile, the Midwest is facing the opposite problem, with frequent floods washing away the topsoil needed to produce corn. Since the Midwest produces approximately three-quarters of the country’s corn supply, this is a major concern.
The Ukraine/Russian conflict means an increased 47 million people will likely face acute food insecurity this year. Before the war, Ukraine exported 6 million tons of agri-commodities (goods including grain) monthly to the Middle East, Asia, and Africa. Now, they’re only exporting 15–20 percent of these.
The Dutch farming sector is being disrupted by a radical 30 percent reduction in livestock numbers. Their government made this decision to meet environmental targets. As a result, one in three Dutch farms may close.
The ongoing labor shortage is causing problems throughout the supply chain, including farms, packaging plants, distribution, etc. Since many fresh foods are perishable, any delay or disruption can lead to spoilage and waste. Crates of meat, dairy, fruits, and vegetables are being left to rot in shipping containers, warehouses, and trucks because there aren’t enough workers to get them to their final destinations.
Therefore, food brands would be wise to:
Use tech tools to manage your supply chain. Today’s digital solutions allow you to audit and evaluate your supply chain’s sustainability and resilience. It’s essential to use innovative tools to get a better handle on your supply chain, organizing supplier certifications into a system you can see and manage.
Determine your suppliers’ back up plans. Ask your suppliers how they’re preparing for climate change and other conflicts. What are their back up plans for the water crisis out west and the midwestern flooding? If your vendors haven’t started considering alternate options, it’s a red flag.
Rely on suppliers closer to home. As we’ve seen, the Ukraine/Russian conflict is disrupting grain exports, which is impacting the global food supply. And a decrease in California crops and midwestern corn will negatively impact many states’ food supplies. This is a good time to rely on local farms—or grow your own produce—to ensure a continuous supply of fresh foods.
Consider alternative options. Increasingly, companies are looking for alternate solutions like vertical farming, which grows crops closer to their final destinations. Growing foods closer to where they’re needed helps reduce food deserts, lower safety and quality risks, and minimize food wastage. Additionally, vertical farms are typically indoor, climate-controlled spaces, which protects crops from severe weather, like droughts, extreme temperatures, flooding, etc.
Reduce food waste. There’s no indication of food prices stabilizing anytime soon, so reduce waste and make every piece of food count. Tech tools can help you implement programs to minimize food waste, make inventory more efficient, and provide predictive ordering and historical sales patterns so you can make more informed purchasing decisions.
Adjust your menu. Last year, 75 percent of restaurant operators tweaked their menus due to supply chain disruptions. If you’re still making complicated dishes or offering extensive menus, you’re likely spending more than necessary on food. Instead, streamline your menu. Opt for less expensive products that can be used in multiple ways. Switch to less pricey cuts of meats. Offer more plant-based meals to reduce costs.
Be proactive. We didn’t know it at the time, but the toilet paper shortage of 2020 was a sign of future supply issues. In hindsight, we should have been more proactive during the COVID crisis, developing backup plans for the huge supply chain disruptions that were headed our way. Back then, we didn’t anticipate the huge ramifications of a disrupted supply chain, and we didn’t understand the importance of having a backup plan in place. Today, we have a more realistic perspective. We must prepare now for future food disruptions by making continuous efforts towards sustainability and resilience, finding alternate food sources, and embracing a circular supply chain.
Focus on what you can control. As a restaurant operator, you have no control over the weather or overseas wars, but there are things within your control. Prioritize waste reduction. Adjust your menu to feature local, affordable ingredients. Research new suppliers. Stay aware of industry trends and current events. And utilize tech tools to streamline operations and make important tasks more efficient and accurate.
It would have been nice to have smooth sailing after the disruptive few years of the COVID pandemic, but our industry is continuing to navigate tremendous curveballs. Now, we know we must be resilient, prepared, and nimble to deal with whatever crisis comes next.
As president of RizePoint, the longest-lasting quality management vendor in the marketplace, Kari Hensien has been instrumental in launching the company’s Ignite Supplier Certification Management solution and adding new features to make the platform even more valuable. Ignite allows companies to gather, organize, and manage supplier documentation and information in a centralized location, track status and deadlines, ensure compliance, and reduce time-consuming administrative tasks. Ignite leverages the latest tech stacks in cloud computing to deliver better speed of service, security, and performance, with shortened development cycles. For more information or to discuss RizePoint’s solutions, please contact Kari at kari.hensien@rizepoint.com.
