Find records of fraud such as those discussed in this column and more in the Food Fraud Database. Image credit: Susanne Kuehne.
In India, low-cholesterol or zero-cholesterol claims on product labels for spreads as well as their advertising must follow strict guidelines set by the Food Safety and Standards Authority India (FSSAI). At two Indian companies, nearly $100,000 worth of products was confiscated due to mislabeling. The spreads’ labels and nutrition panels falsely claimed that they were cholesterol free, while containing significant amounts of saturated fats.
Many food retailers are dependent on outdated methods of recording product food temperature that include pen, paper and trust given to employees to remember to complete inspections. Unfortunately, this style of inspection completion can be an outlet for foodborne Illness outbreaks. As technologies advance to offer real-time reporting, managing such vital inspections and reports has never been so simple while drastically reducing risk and increasing consumer safety.
Food service management should be asking the following questions on a daily basis:
What food items passed & failed the cooling/cooking process?
Why did these items fail and what is the monetary value of product loss?
Have safety & operational checklist logs been completed on time?
What corrective actions were issued?
Have temperature-controlled cases failed within the last 24 hours?
With recent breakthroughs in food safety technology, the answers to the above questions can be found in your email inbox, online dashboard or mobile application. There are technologies available that give food service providers the ability to efficiently track and manage their food safety efforts by digitizing any type of food safety, quality assurance and sanitation inspections. One such technology uses a dual infrared/probe Bluetooth thermometer and real-time temperature sensors to help complete food safety temperature checks as well as bringing automation to cooling, cooking, and “time as temp” logs. This kind of technology can be integrated into food safety and risk management tools such as sensor monitoring or location-driven inspection technology.
This proprietary Bluetooth thermometer uses a dual infrared/probe and real-time temperature sensors. Image courtesy of RiskLimiter.
Sufficient inspection software is not just a format for checklist completion. Software developed for the food service industry is behavioral based, meaning the software will guide inspectors to their next question and corrective action; or it automates the processes all together. This includes reminding inspectors when inspections are due in addition to providing snap shots to management on the status of said inspections with the ability to easily pull all data from the cloud.
Automated Logs for Cooking, Cooling and ‘Time as Temp’
Before taking a closer look at how new technology is shaping cooling logs, cooking logs, and time as a public health control; the following are a few terms to remember:
Cooling & Cooking Logs: Recording of food product temperatures during cooking & cooling cycles that meet both time and temperature constraints outlined by the FDA.
Time as a Public Health Control: Food product whose holding compliance is measured not by temperature but by time spent in the range of 41° F – 135° F after either being cooled below 41° F or heated above 135° F, as outlined by the FDA.
Strategy: What is being done with the food product? Is it being cooked, cooled or held for Time as a Public Health Control?
Phase: Time and/or temperature constraints set within the strategy. For example, cooling product from 135° F to 70° F within two hours or cooking to 165° F before being served.
As one of the most groundbreaking forms of food safety inspections, automated cooling and cooking logs create the ability to customize strategies for such processes. Cooling and cooking logs are an important aspect of food safety for their ability to complete the product lifecycle that can often times be overlooked. Such logs also help to ensure food product is cooked to proper temperatures before it is served to customers. Cooling log strategies look for product to be cooled from 135° F to 70° F within two hours and from 70° F to 41° F within four hours. Cooking logs are built in similar fashion but may vary on the type of product.
Proactive technology allows food service personnel to automate the cooling and cooking process with sensors that record and save product temperatures during cooking and cooling strategies. Once temperature thresholds are succeeded or anticipated to be missed, customized alerts can notify employees that the food is either ready to be served or that action is needed to avoid product loss.
For example, cooling a batch of rotisserie chickens would typically require an employee to manually check the product temperature every 30 minutes to ensure the rotisserie chickens are being cooled properly. With new technology, this same employee can insert a food-grade sensor probe into one or more of the chickens and walk away. The employee can reference a mobile application and real-time push notifications to ensure the chickens are cooling from 135° F to 70° F within two hours and from 70° F to 41° F within four hours. If the software’s algorithms predict that the rotisserie chickens will not meet the conditions set in the phase, proactive push notifications will be sent to the employee for specific action to ensure proper cooling, which avoids product loss and consumer claims related to foodborne illness. Using this method also allows for overnight cooling logs in addition to saving labor hours, all while eliminating paper.
As demand for increased food safety practices continues to climb, so will the capabilities of behavioral based inspection technology. Equipped with industry leading software engineers along with dual purpose customer support and onboarding services, this space will expand on its software and hardware capabilities to replace all outdated methods of inspection processes.
Find records of fraud such as those discussed in this column and more in the Food Fraud Database. Image credit: Susanne Kuehne
Due to its health benefits, camel meat is gaining in popularity for consumers but unfortunately also for fraudsters for economic gain. Polymerase chain reaction (PCR) technologies allow quick and accurate detection of specific meat types, including processed and cooked meats. This newly developed PCR lateral flow immunology method found adulteration of camel meat with beef in 10% of the 20 samples that were investigated in this Chinese study.
On behalf of the Women In Food Safety Group, it was a pleasure to have the opportunity to interview Garry Hellmich, food safety and quality director at General Mills, and learn about his career path and leadership in food safety. During our discussion, Garry shared his perspective on how to continuously support and pursue women’s development, and offered advice to young female professionals who are interested in pursuing and/or expanding on a food safety career journey. Garry holds a food science degree from Purdue University and has dedicated his career to taking a preventive, risk-based mitigation approach to food through the supply chain and maintaining holistic quality management during the product lifecycle. His vast expertise lies in the food manufacturing sector where he started his career at Kroger and the Quaker Oats Company. From there, Garry built his experience through professional learning and getting promoted at Pillsbury and General Mills. His current responsibilities involve leading a large and high-performing global team of food safety subject matter experts at General Mills. He also shared some of his personal hobbies, which to no surprise includes cooking and baking—one of his signature personal favorites is chocolate truffles.
Garry believes in the power of continuously assessing yourself to identify and understand what your career motivators are in order to support career development. “Build your professional career, own your career and plan ahead,” he advises. Also, actively seeking career sponsors and mentors, and ensuring a dynamic team by building gender equality and diversity is key. “Food safety is not a competitive advantage—only the speed with which proactive risk mitigation is achieved is competitive,” says Hellmich.
Garry Hellmich, food safety and quality director at General Mills
Gutierrez Becerra: Tell us about how your career began and led you to where you are today.
Garry Hellmich: I am a food scientist; I received a food science degree from Purdue University. I have more that 35+ years of progressive quality and food safety responsibility in the food industry, including experience in RTE cereals, hot cereals, dry mixes, convenience & food service and dry meals. I started my professional career at Kroger and The Quaker Oats Company, and then in 1991, I joined General Mills (including Pillsbury) where I continued leading in food safety and quality. My first job functions in the food industry were as a laboratory technician responsible for conducting routine micro testing and quality production, as a supervisor responsible for managing the quality of incoming raw material for production release and vendor relationships.
Gutierrez Becerra: What persuaded and motivated you to focus your career on food safety?
Hellmich: I spent three years in college while pursuing a major in pharmacy. After realizing it was not the right thing for me, I decided to take a year off. During the break, while trying to figure out what to do and having lunch with my grandma, she triggered the question: Why don’t you do something involving food—you love food. Then, while conversing with other family members who worked in the food industry, I became inspired and motivated to get a food science degree. I returned to Purdue to continue school with a major in food science. I started my career at different companies, learning about the importance of food safety and implementing [those principles] right away. Pillsbury developed HACCP for NASA, so risk analysis and overall HACCP development have been key throughout my career in both quality and food safety. I enjoy working for the food industry and the fact that I can work to solve many different types of problems. For example, going back to early times in my career, we faced a product recall due to a physical hazard; we assessed the problem and emphasized the importance of hazard analysis and control measures. In addition to working through a recall and leading specific actions to manage it, I gained experience on how to ensure the demand of all impacted retail and foodservice customers is met. And also, I was inspired and motivated by the strong food industry collaboration on a prompted technical and safety solution.
Gutierrez Becerra: What has being a leader in food safety brought you at both a professional and personal level?
Hellmich: There is huge pride when seeing products on the shelf based on a project you have worked on, and this has had a personal impact as well. In working with professionals in food development—they love to see their products on the shelf and so do I; I am proud of the work they have done. [In this business], there is always an interesting problem that needs to be solved, and we gain experience from working on these challenging issues, and it helps us grow. For example, in the 90’s an allergen incident directed me to lead an effort to develop an enhanced allergen protection program at the manufacturing level, which achieved our goal to reduce consumer allergen risk going forward.
Gutierrez Becerra: What have you learned from partnering and working with women throughout your career journey?
Hellmich: I have had the opportunity to work with a lot of talented and qualified women. About 20 years ago, I was interviewing candidates for a job opening. After presenting my candidate selection (a male candidate), my manager (a female leader) challenged me with the question: Why you didn’t choose the other female candidate who was equivalent when it came to experience and would balance the team from a gender standpoint? Later in my career, I kept gender balance in my mind. You can instantly recognize that the dynamic changes when female leaders join a team. Gender diversity is important for success. Forty years ago, General Mills was a male-dominated company. Then, with an idea of making changes, the company decided to hire many female food scientists with PhDs. Today, we have almost a 50-50 gender balance within the company.
Gutierrez Becerra: What would be your number one piece of advice to young women, students and professionals who are planning to become leaders in food safety?
Hellmich: I think it is very important to identify your career motivators, whether it is [tackling] challenges, having work-life balance, job security or advancement. The first step is to assess and know yourself, and what is important for you to pursue in your career. For me, it has been security and to create value. I have stayed in food safety and quality for my entire career, despite having the opportunity to move into other areas. I have always been honest with myself on what motivates my career and what I want to achieve.
I’d like to share a story with you: One of my first female team members was about to turn down an offer for a manager position that involved moving to a different location. The reason was that there was no childcare available at the new location. I advised her to discuss her career motivators with her husband. Ultimately she ended up taking the position with the support of her husband, who stayed home as they settled down in a new city. It is important to think beyond yourself, because your family can help you.
We are owners of our own career timeline, and realizing your own expectations is important—they are different for everyone based on family and personal factors. And lastly, always invest in creating value, which will help you move up within an organization. Look ahead and make your plan. When starting a career, make sure it’s your own.
My advice for a new college graduate is that in the real world, it’s all about application. Learn as much as you can in your current role and make an investment in yourself. Be available to support your team in any capacity that will help you learn and gain experience. Always learn something new and be ready when the next opportunity comes to you.
Gutierrez Becerra: What do you hope to see in the next three to five years in terms of the development and mentoring of women in the industry?
Hellmich: A good mentor of mine once told me that ultimately, one key way to move up is to make your boss look good and to always be prepared to take on any of your manager’s and/or any other employee’s responsibilities when needed. Being always prepared is the highest investment you can make; focus on continuously learning a new leadership and technical skill at any position level. It’s very important to know the difference between choosing career sponsors and mentors. A mentor is assigned, and sponsor is created. A mentor advises you, while sponsors advocate for you and provide opportunities. People tend to become sponsors when they see that you create value to the team and the organization. Hence, the more value you continuously create to the organization, the further you will go.
In closing, I’d like to point out four key areas to keep in mind throughout your career: 1. Assess and know yourself; 2.Understand your career motivators; 3. Build a network of mentors for all areas of growth you are interested in; and 4. Create trust with your line of sponsors so you can truly grow yourself and earn your own career path in the long run.
Next month join Food Safety Tech and Cannabis Industry Journal for the virtual conference, Food Labs / Cannabis Labs. The event is complimentary for attendees and will be held Tuesday, June 2 through Friday, June 5 (each day the event begins at 11 am ET). The event was originally planned as an in-person event but was converted to a virtual conference as a result of the COVID-19 pandemic.
The event kicks off with FDA’s comments on the proposed FSMA laboratory accreditation rule, which will be presented by FDA’s Timothy McGrath and Donald Burr. Other session highlights include FSMA’s impact on labs; navigating the regulatory pitfalls of cannabis lab testing; the evolution of the lab testing market; documentary standards and reference materials; and vulnerability assessment frameworks and food fraud mitigation strategies. Many of the educational sessions will be followed by Tech Talks, which will be provided by sponsors in the laboratory technology or service provider fields, who will educate attendees about solutions that can assist in the food lab and/or cannabis lab environment.
More than 500 people have already registered to attend! Don’t miss this unique opportunity and register now. Please note that only registrants who attend the live event will have access to the recording.
For companies interested in Tech Talk opportunities, Contact RJ Palermo (203-667-2212). Tuesday and Wednesday are sold out.
While foodborne transmission of the novel coronavirus is unlikely , the virus has significantly affected all aspects of food production, food manufacturing, retail sales, and foodservice. The food and agriculture sector has been designated as a “critical infrastructure,” meaning that everyone from farm workers to pest control companies to grocery store employees has been deemed essential during this public health crisis.* As a society, we need the food and agriculture sector to continue to operate during a time when severe illnesses, stay-at-home orders and widespread economic impacts are occurring. Reports of fraudulent COVID-19 test kits and healthcare scams reinforce that “crime tends to survive and prosper in a crisis.” What does all of this mean for food integrity? Let’s look at some of the major effects on food systems and what they can tell us about the risk of food fraud.
Equally concerning are reports of supply disruptions in commodities coming out of major producing regions. Rice exports out of India have been delayed or stopped due to labor shortages and lockdown measures. Vietnam, which had halted rice exports entirely in March, has now agreed to resume exports that are capped at much lower levels than last year. Other countries have enacted similar protectionist measures. One group has predicted possible food riots in countries like India, South Africa and Brazil that may experience major food disruption coupled with high population density and poverty.
Supply chain complexity, transparency and strong and established supplier relationships are key aspects to consider as part of a food fraud prevention program. Safety or authenticity problems in one ingredient shipment can have a huge effect on the market if they are not identified before products get to retail (see Figure 1). Widespread supply chain disruptions, and the inevitable supplier adjustments that will need to be made by producers, increase the overall risk of fraud.
Figure 1. Reconstructed supply chain based on recall data following the identification of Sudan I in the chili powder supply chain in 2005. Data source: Food Standards Agency of the U.K. National Archives and The Guardian. Figure from: Everstine, K. Supply Chain Complexity and Economically Motivated Adulteration. In: Food Protection and Security – Preventing and Mitigating Contamination during Food Processing and Production. Shaun Kennedy (Ed.) Woodhead Publishing: 26th October 2016. Available at: https://www.elsevier.com/books/food-protection-and-security/kennedy/978-1-78242-251-8
Regulatory oversight and audit programs have been modified. The combination of the public health risk that COVID-19 presents with the fact that food and agriculture system workers have been deemed “critical” has led to adjustments on the part of government and regulatory agencies (and private food safety programs) with respect to inspections, labeling requirements, audits, and other routine activities. The FDA has taken measures including providing flexibility in labeling for certain menus and food products, temporarily conducting remote inspections of food importers, and generally limiting domestic inspections to those that are most critical. USDA FSIS has also indicated they are “exercising enforcement discretion” to provide labeling flexibilities. The Canadian Food Inspection Agency (CFIA) announced they are prioritizing certain regulatory activities and temporarily suspending those activities determined to be “low risk.” GFSI has also taken measures to allow Certification Program Owners to provide certificate extensions due to the inability to conduct in-person audits.
While these organizations have assured stakeholders and the public that food safety is of primary importance, the level of direct regulatory and auditing oversight has been reduced to reduce the risk of virus transmission during in-person activities. Strong auditing programs with an anti-fraud component are an important aspect of food fraud prevention. Adjustments to regulatory and auditing oversight, as necessary as they may be, increase the risk of fraud in the food system.
There is a focus on safety and sustainability of foods. The food industry and regulatory agencies are understandably focused on basic food safety and food sustainability and less focused on non-critical issues such as quality and labeling. However, there is a general sense among some in industry that the risk of food fraud is heightened right now. Many of the effects on the industry due to COVID-19 are factors that are known to increase fraud risk: Supply chain disruptions, changes in commodity prices, supplier relationships (which may need to be changed in response to shortages), and a lack of strong auditing and oversight. However, as of yet, we have not seen a sharp increase in public reports of food fraud.
This may be due to the fact that we are still in the relatively early stages of the supply chain disruptions. India reported recently that the Food Safety Department of Kerala seized thousands of kilograms of “stale” and “toxic” fish and shrimp illegally brought in to replace supply shortages resulting from the halt in fishing that occurred due to lockdown measures.
High-value products may be particularly at risk. Certain high-value products, such as botanical ingredients used in foods and dietary supplements, may be especially at risk due to supply chain disruptions. Historical data indicate that high-value products such as extra virgin olive oil, honey, spices, and liquors, are perpetual targets for fraudulent activity. Turmeric, which we have discussed previously, was particularly cited as being at high risk for fraud due to “‘exploding’ demand ‘amidst supply chain disruptions.’”
How can we ensure food sufficiency, safety, and integrity?FAO has recommended that food banks be mobilized, the health of workers in the food and agriculture sector be prioritized, that governments support small food producers, and that trade and tax policies keep global food trade open. They go on to say, “by keeping the gears of the supply chains moving and actively seeking international cooperation to keep trade open, countries can prevent food shortages and protect the most vulnerable populations.” FAO and WHO also published interim guidance for national food safety control systems, which noted the increased risk of food fraud. They stated “during this pandemic, competent authorities should investigate reported incidences involving food fraud and work closely with food businesses to assess the vulnerability of supply chains…”.
From a food industry perspective, some important considerations include whether businesses have multiple approved suppliers for essential ingredients and the availability of commodities that may affect your upstream suppliers. The Acheson Group recommends increasing supply chain surveillance during this time. The Food Chemicals Codex group recommends testing early and testing often and maintaining clear and accurate communication along the supply chain.1 The nonprofit American Botanical Council, in a memo from its Botanical Adulterants Prevention Program, stated “responsible buyers, even those with relatively robust quality control programs, may need to double- or even triple-down on QC measures that deal with ingredient identity and authenticity.”
Measures to ensure the sufficiency, sustainability, safety and integrity of foods are more closely linked than ever before. In this time when sufficiency is critical, it is important to avoid preventable food recalls due to authenticity concerns. We also need to stay alert for situations where illegal and possibly hazardous food products enter the market due to shortages created by secondary effects of the virus. The best practices industry uses to reduce the risk of food fraud are now important for also ensuring the sufficiency, sustainability and safety of the global food supply.
*Foodborne transmission is, according to the Food Standards Agency in the U.K., “unlikely” and, according to the U.S. FDA, “currently there is no evidence of food or food packaging being associated with transmission of COVID-19.”
Food and beverage manufacturers are seeing the effects of the coronavirus when it spreads through their workforce. Recently, there have been multiple closures of facilities operated by meat processors, including Smithfield Foods and Tyson Foods as COVID-19 has infected hundreds of workers.
The backdrop of stressful operations and work: Employees now face increased questions before entering plants and feelings of isolation as lunches and breaks are now solo activities due to social distancing. All of these stressors are compounded when you think about what we’re asking them to do: Go into work and keep food on the grocery store shelves. This is a completely new way to operate, and it has a very real emotional effect on our workers.
We’ve received reports from customers where management is getting out of the back office and putting on hairnets to work the production line. The shortage of workers is a very real problem, and our customers are rising to the challenge. Plus, managing this overall labor shortage while doing more safety and sanitation checks than ever before to make sure transmission risks are eliminated is putting stress on everyone working in plants. It’s never been harder to work in the food industry.
In response to California Governor Gavin Newsom’s actions related to the pandemic, we stand behind any effort that is taken to accommodate the needs of these vital, valuable workers, including the executive order to provide supplemental paid sick leave. Such actions, both locally here in California and at the federal level, are critical to elevating the safety of our food manufacturing and distribution workers. Some heroes wear hairnets.
Temp Workers and Lack of Training Protocols
COVID-19 has had a significant impact on the availability of skilled workers in food facilities. Through all the layoffs stemming from the economic standstill, food manufacturers and grocery workers are reporting increases in hiring to help keep up with demand—and to mitigate the effects of sick employees going on quarantine for two weeks. For instance, Albertson’s, a large food grocery chain store, reported that it was hiring for 2,000 positions.
But hiring temporary workers is only half the battle. The task of training people who may have never worked in grocery or food manufacturing has become more critical in the face of new demands on sanitation and social distancing. With these measures in place, it’s no longer a case of a new employee showing up for work and shadowing another employee or supervisor. Technology can close the gap, especially in food production where the regulations and safety standards require strict adherence to processes. For example, software can facilitate shorter employee training in the areas of quality policies and good documentation practices.
Same Volume with Fewer Workers
We are working closely with customers and partners to cope with new guidelines for social distancing inside food facilities, providing the capability to do remote audits as visitor restrictions have increased. Our software is also being used to screen food manufacturing workers for symptoms of COVID-19 before shift work starts to help prevent the spread of the coronavirus to other essential workers.
In response to increased needs from customers, we have developed three solutions to address the impact of COVID-19. These solutions, which include a personnel screener, changeover manager and remote supplier auditor, can help food and beverage manufacturers efficiently manage physical distancing measures, symptom screening, and travel restrictions.
It can’t be stressed enough: The people who carry out food safety protocols are doing more checks and using more labor time to conform to regulations and guidelines for COVID-19. And, adhering to the systems, regulations and processes used to promote safe, high-quality products (in the same or even higher volumes) remains as crucial as ever. Simplifying these processes by leveraging software has been shown to cut 8 to12 hours of labor per day for a single facility. This is critical at a time when even one person being sick can cause lower throughput.
Plus, this isn’t like manufacturing a car where a line will be built to produce hundreds of thousands of cars over a two- to three-year period. Food manufacturers must often change a line over to produce a different flavor, package type or food type altogether, in as little time as possible to keep production going. Robots and automation can help, but in a crisis like this where immediate productivity gains are needed, software can make the much-needed difference.
Find records of fraud such as those discussed in this column and more in the Food Fraud Database. Image credit: Susanne Kuehne
Both Prunus species produce similar flavor and sensory profiles, but have significantly different costs—the 50% cheaper apricot kernels are sometimes used as an adulterant, replacing almonds in products such as marzipan, almond oil or almond powder. A polymerase chain reaction (PCR) method shows that the DNA barcode of almond shows significant differences from other Prunus species and can therefore be used to detect adulteration of almond products.
–UPDATE April 29, 2020— Yesterday President Trump signed an executive order to keep meat and poultry processing facilities operational during the coronavirus national emergency. U.S. Secretary of Agriculture Sonny Perdue said the following in a USDA statement, “Maintaining the health and safety of these heroic employees in order to ensure that these critical facilities can continue operating is paramount. I also want to thank the companies who are doing their best to keep their workforce safe as well as keeping our food supply sustained. USDA will continue to work with its partners across the federal government to ensure employee safety to maintain this essential industry.”
–END UPDATE–
As critical infrastructure workers, employees at meat and poultry processing facilities have stayed on the job during the coronavirus crisis. Hundreds have fallen ill and many have died as a result; at least 100 USDA inspectors have tested positive for COVID-19 and at least one inspector has died, according to reports. Production facilities across the country have shut down over the past month, and the threat of a meat shortage is very close to becoming a reality, warns Tyson Foods Chairman John Tyson. “In small communities around the country where we employ over 100,000 hard-working men and women, we’re being forced to shutter our doors. This means one thing—the food supply chain is vulnerable. As pork, beef and chicken plants are being forced to close, even for short periods of time, millions of pounds of meat will disappear from the supply chain,” Tyson stated in a company blog. “As a result, there will be limited supply of our products available in grocery stores until we are able to reopen our facilities that are currently closed.”
Meat production is on a 25% decline and by the end of this week, America could be entering a meat shortage, according to Dennis Smith, an Archer Financial Services commodity broker and livestock analyst.
“To ensure continuity of operations of essential functions, CDC advises that critical infrastructure workers may be permitted to continue work following potential exposure to COVID-19, provided they remain asymptomatic and additional precautions are implemented to protect them and the community,” the CDC’s Critical Infrastructure Guidance states. The agency also notes that screening workers for COVID-19 symptoms is “an optional strategy”.
Meat processing workers are not exposed to COVID-19 through product handling; they can be exposed via close contact with other employees in a facility. The CDC and OSHA have released interim guidance for meat and poultry processing workers and employers that details how communal work environments should be laid out and how employers should be promoting social distancing. Engineering controls include the following:
Reconfiguration of workstations to allow employees to be six feet apart, if possible
Establishing physical barriers (i.e., plexiglass or strip curtains) to separate workers
Working with an HVAC engineer to establish proper ventilation that limits potential exposure to coronavirus; removal of any pedestal or personal fans
Setting up handwashing stations or hand sanitizer (60% alcohol) stations
Reconfiguring break rooms and other communal areas to promote social distancing
The CDC also recommends that workers wear cloth face coverings that fit over the mouth and nose.
For workers who have experienced COVID-19 symptoms and have self-isolated at home, the CDC advises they do not return to work until they meet specific criteria.
On the one level, it’s still too early to see full supply chain stoppages, other than growing port and customs delays. While one does not need a crystal ball to see that significant issues are already on the horizon, it takes time for both positive and negative supply impacts to wend their way through the chain.
My company, Decernis, a FoodChain ID Company, provides a complete regulatory intelligence software suite that covers more than 100,000 global regulations in 219 countries, and as such, we have a unique global perspective on how the pandemic is going to affect the supply chain.
Among the countries to watch is India, which imposed a nationwide 21-day shutdown on March 25 and thus far is the tightest lockdown in the world. In the large cities, the lack of public transportation has forced newly unemployed to walk home, often over a period of days, to their home villages. This creates a challenge for the economy because India depends on seasonal migrant and factory workers.
Unlike most countries, pharmaceutical and supplement manufacturers, as well as food processors, are entirely shut down. While farm operations and their supply chains are exempt, there is no harvest without migrant labor. Moreover, truckers transporting frozen goods often are stopped en route due to uneven permit enforcement across states. Add to this the problem of export foods stuck in containers or ports with limited market access, combined with import/export restrictions, and a crisis is at hand.
And, while the Indian government has not banned rice exports, India’s Rice Exporters Association effectively suspended exports because of dramatic labor shortages and logistical disruptions. So, while buyers exist, there is no practical way to harvest, process or ship those exports.
Combine the lack of migrant agricultural workers with the closing of restaurants and schools in many countries and economies are left with a steep drop in demand. As a result, unprocessed food including pork, eggs, milk and early-harvest fruits and vegetables are being destroyed or “tilled under.”
Countries whose leadership is turning a blind eye to the pandemic (i.e., Brazil) will ultimately see a more significant impact.
Another major player to watch is China, where the tariff crisis initially exposed supply chain vulnerabilities. Combined with the current pandemic, businesses now see that sourcing can often be a more substantial factor than price.
Prior to COVID-19, the United States, among other countries, initiated a trend toward blatant economic nationalism, which significantly accelerated this year. In an effort to protect their populations and national security, countries (i.e., Cambodia, India, Kazakhstan, Russia, Serbia and Ukraine) halted the export of vital commodities. As a result, critical supplies have been diverted to more developed countries that can outbid and pay a higher price, leading to food security risks in smaller and weaker markets.
These factors will trigger a rethinking of supply chains in the medium and long term. The cost savings realized in China, India, Vietnam and Thailand will be weighed against the threats to supply chain stability. The result may be a subtle new form of supply chain nationalism, where companies prefer more reliable local production to lower-cost, more vulnerable foreign production. The recent sourcing trend for large multinationals to partner with fewer, trusted providers could reverse once the dust settles from this pandemic.
The decrease in air cargo capacity (due to the grounding of passenger aircrafts) has also played a significant role in supply chain disruption and will lead to dramatic short-term increases in the cost of air freight.
Last, but certainly not least, will be the fallout from obvious bankruptcies. As an early indicator, 247,000 Chinese companies declared bankruptcy in the first two months of 2020, with many more closures expected.
Obvious candidates include movie theaters, airlines, cruise ships, retailers, and hotels, but any company caught carrying a large debt load is also endangered. Pharma companies and those in oil, gas and petrochemicals will also be affected by a perfect storm of oil market collapse.
On a positive note, any supplement (i.e., Vitamin B, C and D) food commodity (i.e., blueberries, oranges) and processed food products (i.e., juices, yogurts) perceived to have immunity-boosting potential will likely see a short and long-term boost in sales. Botanicals, however, may soon have significant new sourcing problems.
As they deal with consequences of this pandemic, global companies will need to strategize for building a more durable and flexible supply chain. These unprecedented times are sure to spark more innovation and technological growth to address the challenges industry is facing.
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In other cases, our advertisers request to use third-party tracking to verify our ad delivery, or to remarket their products and/or services to you on other websites. You may opt-out of these tracking pixels by adjusting the Do Not Track settings in your browser, or by visiting the Network Advertising Initiative Opt Out page.
You have control over whether, how, and when cookies and other tracking technologies are installed on your devices. Although each browser is different, most browsers enable their users to access and edit their cookie preferences in their browser settings. The rejection or disabling of some cookies may impact certain features of the site or to cause some of the website’s services not to function properly.
Individuals may opt-out of 3rd Party Cookies used on IPC websites by adjusting your cookie preferences through this Cookie Preferences tool, or by setting web browser settings to refuse cookies and similar tracking mechanisms. Please note that web browsers operate using different identifiers. As such, you must adjust your settings in each web browser and for each computer or device on which you would like to opt-out on. Further, if you simply delete your cookies, you will need to remove cookies from your device after every visit to the websites. You may download a browser plugin that will help you maintain your opt-out choices by visiting www.aboutads.info/pmc. You may block cookies entirely by disabling cookie use in your browser or by setting your browser to ask for your permission before setting a cookie. Blocking cookies entirely may cause some websites to work incorrectly or less effectively.
The use of online tracking mechanisms by third parties is subject to those third parties’ own privacy policies, and not this Policy. If you prefer to prevent third parties from setting and accessing cookies on your computer, you may set your browser to block all cookies. Additionally, you may remove yourself from the targeted advertising of companies within the Network Advertising Initiative by opting out here, or of companies participating in the Digital Advertising Alliance program by opting out here.
