Tag Archives: logistics

James Walter

James Walter Appointed Neogen Vice President of Global Operations

By Food Safety Tech Staff
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James Walter

Neogen Corporation has appointed James “Jim” Walter to the position of Vice President, Global Operations. In this role, he will lead and manage Neogen’s global manufacturing and logistics functions.

Walter graduated with honors from the U.S. Naval Academy with a degree in mathematics and engineering, then served in the Navy as a nuclear engineer. He comes to Neogen after having spent most of his career at Mallinckrodt Pharmaceuticals, serving most recently as Executive Director of Manufacturing Excellence. Previously at Mallinckrodt, he worked in various operations disciplines, helping to execute a wide range of initiatives to drive operational improvement and integration activities, and support growth initiatives. Prior to joining Mallinckrodt, Walter worked in the clean energy industry as Senior Vice President of Operations and Engineering at Tinuum and Vice President of Operations at Catalent Pharma Solutions, where he helped to stabilize and grow the company’s oral and specialty delivery operations worldwide.

“We are excited to welcome Jim to Neogen and add his wealth of operational knowledge to our global leadership team,” said John Adent, President and CEO, Neogen. “Jim brings a great deal of operations and supply chain excellence experience to the company, which will be a significant asset for us, particularly as we continue to integrate the former 3M Food Safety Division into our business.”

Pratik Jagad
FST Soapbox

Route-planning Software Reduces Food Loss, Improves Operational Efficiency

By Pratik Jagad
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Pratik Jagad

The food shipping industry has witnessed a surge in demand for more efficient services, and with that comes the need for more effective route planning. The success of food enterprises hinges on timely deliveries and cost optimization. To meet these challenges head-on, route planning software has emerged as a transformative tool that can reshape the logistics landscape for food companies. In this article, we explore efficient route planning in the food industry and how the adoption of route planning software can enhance overall operations.

The Importance of Effective Route Planning in the Food Industry

In the competitive world of food logistics and delivery, efficient route planning plays a pivotal role for several reasons. First and foremost, it directly impacts delivery times, ensuring that food reaches customers promptly. This not only satisfies the demands of discerning consumers but also strengthens customer loyalty and brand reputation.

Optimized routes have also proven to be a financial boon for food companies. By streamlining routes, businesses can significantly reduce food loss and improve fuel efficiency, leading to substantial cost savings in the long run. Additionally, effective route planning enables better resource allocation, enhancing overall operational efficiency and productivity.

Optimizing Delivery Routes with Route Planning Software

Route planning software leverages technology to optimize delivery routes. Some key ways in which route planning software is improving the logistics industry include:

  • Real-Time Traffic Updates: By incorporating real-time traffic data, route planning software dynamically adjusts delivery routes to avoid traffic congestions, ensuring timely deliveries even during peak hours.
  • Efficient Resource Allocation: With its ability to take into account various variables such as vehicle capacity, delivery time frames and driver availability, optimization software streamlines resource allocation, reducing idle time and improving overall delivery efficiency.
  • Cost Reduction and Fuel Efficiency: The software’s ability to design more efficient routes not only translates into cost savings but also reduces the environmental impact, as fuel consumption decreases, thereby contributing to more sustainable practices.

Ensuring Food Safety and Quality During Transit

For food shippers, maintaining the safety and quality of products during transit is of paramount importance. Route planning software addresses this concern through:

  • Temperature Control: User tools consider the specific temperature requirements of perishable goods and assign vehicles equipped with the appropriate refrigeration capacities, safeguarding the freshness and quality of products during transportation.
  • Minimizing Food Spoilage: Optimized routes reduce travel time, minimizing the risk of food spoilage, a crucial factor for businesses dealing with perishable goods.

Compliance with Food Safety Regulations

Adherence to food safety regulations is a non-negotiable aspect of the food industry. Route planning software assists companies in ensuring compliance with delivery and food safety laws, preventing potential legal issues and fines that could harm the reputation and financial stability of the business.

Enhancing Customer Satisfaction

In an era where customer experience reigns supreme, route planning software becomes an invaluable tool for food businesses aiming to enhance customer satisfaction. By streamlining delivery processes and reducing delays, the software contributes to meeting customer expectations and building brand loyalty.

Gone are the days of running your shipping operations from within a spreadsheet. The only logical next step is to implement technology tools that can help shippers catch up and eventually stay ahead of the curve. For food shippers, implementing route optimization tools and getting your perishable goods to shelves, freezers or onto plates faster can improve customer satisfaction and bottom line growth.

Oren Zaslansky

Using Technology in Food Logistics Management Improves Speed to Shelves

By Maria Fontanazza
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Oren Zaslansky

The global supply chain is only getting more interconnected and complex, and with that, the need to improve food logistics strategies has never been greater. The role of technology in providing greater accuracy, traceability and transparency continues to be a critical component in food logistics management—and the matter becomes more urgent when dealing with perishable food products. Shipping these products requires stringent cold chain controls to prevent spoilage. In a Q&A with Food Safety Tech, Oren Zaslansky, CEO of Flock Freight, discusses how more thoughtful food logistics strategies can ultimately save companies time and money, as well as get products on store shelves faster.

Learn about how to manage supply chain challenges during Food Safety Tech’s upcoming virtual event on Supply Chain Hazards | May 18, 2021 @ 12 pm ET | Register nowFood Safety Tech: How is technology helping food companies solve the logistical challenges triggered by the pandemic?

Oren Zaslansky: Shipping perishable or fragile goods is no easy task. Shippers must maintain tight controls over every aspect of the shipping process—from timing to handling—to avoid damage or compromised product integrity. When things go wrong, rejected shipments can cost money, and food safety concerns can cost business. A recent survey of shippers across the United States found that 100% of respondents reported that their LTL freight arrived late in 2021, and 100% had to remanufacture and reship goods due to damage.

Luckily, there are food transportation methods that lower the risk of product damage and spoilage due to delays. Right now, food manufacturers typically choose between truckload (TL) and less than truckload (LTL) shipping, but they should instead consider shared truckload (STL) for freight that can’t fill an entire trailer to capacity. Speed to shelves is key for food shippers and traditional LTL has as low as 40–70% on-time service. Meanwhile, STL has a 94% average on-time performance.

STL places shipments (from multiple shippers that are traveling on a similar route) onto the same truck, optimizing the best possible routes so freight never loads or unloads between pickup and delivery. To achieve this, an STL solution can use advanced algorithms to analyze hundreds of thousands of shipments, with the goal of combining freight into terminal-free loads that fill trucks to capacity. This minimizes potential delays and reduces damage to 0.1%. Trucks are filled to capacity, reducing the cost of shipping midsized freight, while maximizing carriers’ earnings, eliminating unnecessary mileage, and contributing to a more sustainable supply chain.

Oren Zaslansky
Oren Zaslansky, CEO of Flock Freight, a logistics provider that guarantees shared truckload service.

FST: Are there particular sectors of the food industry that can benefit more from these technologies?

Zaslansky: Any perishable and fragile foods are an obvious answer, but this technology can be deployed for any type of food or beverage, and even for companies that create packaging for foods and beverages. Any sector that has difficulty filling its trucks to capacity, yet has strict product integrity and delivery timeframes, is the right fit for technology that enables shared truckloads at scale.

FST: How can logistics companies work with food manufacturers to ensure the most effective method/solution is implemented when shipping products?

Zaslansky: As COVID cases start to fall, people will start eating out again, putting pressure on restaurants, which will ultimately lead to truck shortages because everyone will need them. The number one way to combat this will be to make sure each truck is filled to capacity and rely on technologies that optimize routes that will get them where they need to go in a timely manner.

For shippers, shared truckload service enables them to only pay for the space they need (versus paying for space they can’t fill), and for carriers, optimizing their truck and driver schedules to make the best use of their fleet will help them stay ahead.

The above technology that enables shared truckloads at scale will help food shippers track perishable shipments and spot inefficiency in their food and beverage supply chains. By working with the right partners and implementing sound food logistics strategies, shippers can better understand weak spots in their supply chains, more quickly implement solutions, and more effectively protect the freshness or integrity of perishable and fragile goods.

Emily Newton, Revolutionized Magazine
FST Soapbox

Packaging Automation Can Be an Essential Tool for Food Manufacturers

By Emily Newton
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Emily Newton, Revolutionized Magazine

Food and beverage manufacturers face various challenges—including a labor shortage, rising demand and ongoing supply chain disruptions. Food packaging automation can be an essential tool for these businesses, as the technology can improve manufacturing productivity without hiring additional workers.

As demand continues to rise over the next few years, and as the labor shortage continues, packaging automation will likely become more important. This is why manufacturers are turning to the technology and how innovations in Industry 4.0 solutions may reshape food manufacturing this decade.

Food and Beverage Manufacturers Are Doing More With Less

Food manufacturers face the same market challenges that most companies are navigating right now. Even two years after the beginning of the COVID-19 pandemic, the supply chain remains unstable, demand is volatile and job openings continue to outstrip available workers.

Consumer expectations are also changing. A growing segment of American shoppers expects businesses to deliver items faster than ever, putting greater pressure on manufacturers to accelerate production and logistics operations.

These trends aren’t likely to reverse anytime soon, even as the pandemic eases and vaccines become available globally. Some experts predict that the labor shortage may be on track to last for years, and the lack of essential raw materials or components may similarly drag on well into the future. This means hunkering down and attempting to weather current market conditions will not be an effective strategy. Instead, businesses will have to experiment with new ways to improve productivity, reduce operating costs and accelerate delivery times.

Automation may become an essential strategy, especially for food and beverage manufacturing tasks that have traditionally been time-consuming and challenging to automate.

How Food Packaging Automation Helps Manufacturers Stay Competitive

Manufacturers that need to increase factory throughput may struggle to bring on additional labor necessary to improve production. Instead, solutions that help them increase productivity without hiring—like packaging automation—may help companies meet existing demand.

Packaging automation tools allow manufacturers to automate various tasks that are tedious, dull, time-consuming and potentially dangerous.

Industry 4.0 technology also allows packaging solutions to automate work that previously required human labor. For example, AI-powered automation systems can use machine vision—algorithms that enable machines to “see” objects — for quality control and manufacturing purposes. These systems may be able to automatically package items or visually inspect them for defects, allowing businesses to improve quality control processes without the dedication of additional labor.

Food packaging automation can also help make food and beverage products more consistent and safer for workers and consumers. Quality control processes are often tedious or repetitive. Throughout a shift, workers assigned to these tasks tend to slow down and make mistakes, potentially allowing defective or dangerous products to move further along the production line.

Automated packaging systems are remarkably consistent when well-maintained. They can run for hours at a time without the same risks that may come with human workers assigned to tedious or repetitive tasks.

Some internet grocery retailers are also using a combination of AI and RFID to improve package branding and drive sales. RFID allows businesses to embed unique identifiers into the packaging of every product they sell, making it possible to collect deeper information about consumer demands and purchasing habits.

Other AI systems use IoT devices that gather real-time data on equipment operations to streamline or automate maintenance checks. For example, a predictive maintenance approach uses AI forecasting algorithms and IoT data to monitor machines and predict when they will need maintenance. The approach is similar to preventive maintenance but is more effective at keeping machines online. In practice, the forecasting power of a predictive maintenance algorithm can reduce downtime and maintenance costs.

Similar AI technology can also be used in the packaging design process. An AI algorithm trained on a library of packaging data may be used to create new packaging—helping businesses identify novel options when it comes to shape or material choice.

Other Advantages of Packaging Automation

Reducing the cost of packaging can also allow manufacturers to spend more money on higher-quality food wrapping—which can, in turn, improve customer satisfaction and drive revenue. For example, many manufacturers have begun to offer eco-friendly packaging materials that can be customized with branding elements. These packaging materials will attract customers who want to buy products from eco-friendly brands. They will also help manufacturers build deeper client relationships while growing additional company awareness.

Over time, these decisions can help a business transform its packaging into a branding tool. This will require an additional up-front investment, but the improvements will pay for themselves over time.
Packaging Automation Can Help Food and Beverage Manufacturers Adapt

Cutting-edge industry technology has made packaging solutions more effective than ever. The right equipment allows food and beverage manufacturers to automate various packaging, design and maintenance tasks—making individual facilities and businesswide processes much more efficient.

FDA

FDA Offers Help to Companies with Supply Chain Disruptions

By Food Safety Tech Staff
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FDA

FDA has given an update on its resources to provide the industry with continued assistance as it struggles through the challenges presented by the ongoing pandemic.

Sanjay Sharma, Roambee
FST Soapbox

The Need for Improved Visibility in the Fresh Produce Supply Chain

By Sanjay Sharma
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Sanjay Sharma, Roambee

The Ever Given eventually broke free, but the Suez Canal blockage was just one dramatic incident in a year full of “black swan” events exposing weaknesses in the global supply chain, including daily mini disruptions. Among the lessons to be learned is the need for verifiably better supply chain visibility that goes beyond crowdsourced carrier or telematics data. This article hones in on the significant challenges faced in the fresh produce supply chain, and strategies suppliers can implement in situations to help improve supply chain visibility and prepare for an unpredictable future.

The Reality of Today’s Food Supply Chains

As the global supply chain continues to expand, the distance fresh produce travels to reach the consumer is extended. According to the International Institute of Refrigeration, the lack of a functioning cold chain causes significant food loss; the Global Cold Chain Alliance (GCCA) reports that “one-third of food produced globally is lost or wasted between farm and fork.”

Multimodal shipping, as well as the change in hands before the harvested produce reaches the consumer, makes it hard for food to retain its freshness. Moreover, multiple parties involved in the supply chain create plenty of room for coordination issues, contributing to delays, damaged products, and increased costs. Potential challenges faced while transporting fresh produce include the following.

Reusability and Circular Economy of Plastic Containers

The best way to preserve quality and freshness from source to consumer, retail-ready transport packaging solutions are needed to optimize space, improve temperature control and protect quality into the retail distribution center. While it is an environmentally sustainable choice, renting returnable plastic containers (RPC) instead of corrugated boxes comes with its own challenges. These RPCs get lost or misplaced from the time they are rented, during use to ship products from consumer locations and during the return of the empty RPCs back to the renter.

Temperature Excursions During Transport & Transshipment

Transport losses in a fresh food cold chain are primarily related to temperature and humidity excursions, caused by delayed/improper cooling or refrigeration equipment failure. The biggest problem is not always the lack of data, but rather the lack of timely data that can be used to correct anomalies in time to prevent spoilage.Temperature excursions can occur both while in transit and at transshipment points. During the former, it can happen due to failure of cooling equipment, while for the latter, it can occur if active cooling containers or reefers are not plugged into power sockets for extended periods of time during handling or when on a ship. In air transport, the goods can face temperature excursions during loading, unloading and storage, such as on the tarmac on a hot day.

Damaged Packages

Early spoilage in fresh produce can be attributed to both handling as well as changes in external environment. An example is the impact of atmospheric pressure on bags of potato chips traveling through a mountainous region or by air. The financial impact of damaged packages—one of the leading reasons for increased cost of food logistics management—goes beyond the visible replacement and re-shipping costs; in the case of fresh food spoilage, not only can your brand be impacted, legal issues could result if consumer health is affected.

Safety/Security Issues

Fresh produce is easily contaminable and thus requires extra care in the chain of custody. Today, customers are not just demanding visibility into the authenticity of how their food was farmed, but also how safely it was transported. The right temperature and humidity play a vital role in maintain the quality of the fresh produce reaching the grocery store. Whether it is a Black Swan event like a widespread E. coli contamination of tomatoes that can endanger human lives, or just a daily product freshness issue, there’s considerable impact on the food brand and retail store.

High Maintenance Costs

Maintaining the right conditions, ensuring quality packaging, and facilitating quick transportation increases the cost of a fresh produce supply chain significantly compared to other products.

Lack of Information Accuracy in Data Sharing

Every actor in the supply chain is working toward maintaining the freshness of a product, such as avocadoes imported from Mexico. But tying this data into a common thread is difficult due to disparate systems and processes in monitoring condition, handling and chain of custody. For example, the warehousing company may only measure temperature in a few corners of the warehouse where the fresh product wasn’t technically stored and the trucking company will only have the reefer’s temperature, but the product may have never traveled on that reefer owing to a missed connection. This makes data aggregation inaccurate and unactionable.

The Need for Improved Visibility

Whether it be food losses, increased costs, or food safety regulations, improving the verifiability of supply chain visibility from end to end can ultimately help eliminate these challenges. The following are some measures that can help contribute to food supply chain success.

Enhancing Information Transparency

A clear string of communication from end-to-end is critical to manage the supply chain. Increased information transparency and a clear chain of data can reduce food damages and losses.

Optimizing Maintenance

Maintenance costs can arise out of substandard packaging, lack of adherence to quality standards, and mishandling during transportation. Additional measures can be taken in order to reduce the overall maintenance costs, as well as time and effort spent tackling late or damaged product delivery. Such measures include adding more service locations, improving on time delivery, monitoring in real time, improving reusable packaging (if applicable), and performing thorough quality checks.

Building Faster, Flexible and Precise Supply Chains

Running a lean supply chain is vital to successfully delivering fresh food products. Many items such as yogurts or fresh produce have a short shelf life. Hence, the slightest reduction in transit time has significant benefits. Predictive analytics, image recognition and process automation offer timely alerts to improve actionability.

Where to Begin

You need to take a top-down, end-to-end approach to visibility because a supply chain involves several stakeholders and modes of transport from farm to fork.

Sensor-driven visibility helps implement a top-down, end-to-end approach because it is firsthand and not reliant for data from the actors in the chain of custody. Sensor-driven location and condition in real time offers transparency, collaboration and ultimately, reliable logistics automation.

End-to-end real-time data on inventory location and package conditions can result more transparency and control across the supply chain. The best, and often the only way to wade through both the visible and hidden business costs of in-transit damage is to keep track of your shipments from door to door with the help of an on-demand food and beverage monitoring solution.

When working with low shelf life products like food, reliable supply chain visibility is vital to prevent incidents that can contribute to financial loss. The loss of customer relationships, dealer loyalty, and cascading delays can have a ripple effect and result in further monetary losses as well as long-term business impacts that might take very long to resolve. Implementing the above recommendations can help supply chains recover from accidents and prepare for the inevitable future of “black swan” events and daily mini disruptions alike.

Stephen Dombroski, QAD
FST Soapbox

Regulatory Issues and Transportation: Critical Factors in the Quest for Sustainability in Food Manufacturing

By Stephen Dombroski
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Stephen Dombroski, QAD

Over the last several months, we have been exploring the details of several critical factors that are impacting the food and beverage manufacturing sector in terms of sustainability, including:

Two additional factors that food manufacturers now have to manage regarding sustainable practices are transportation and regulatory restrictions. Each can be discussed as a separate topic, but they are intertwined, as there have always been regulations regarding food transportation, and obviously food has always needed to be transported. Now that sustainability is an important topic in all areas of food manufacturing, it makes sense to discuss these two subjects both individually and collectively.

Transportation and Regulatory Joint Concerns

Ensuring that all areas of food transportation incorporate sustainable practices is a critical component of achieving sustainability in food manufacturing. To this point, however, these types of practices have not fully been implemented or even designed. This area is still evolving. From a straight transportation point of view, governments globally have been imposing restrictions for decades. These restrictions vary from country to country, province to province, region to region, and so on, and this causes confusion when inter- or intra-region transportation of food is required. There are also several regulatory differences based on mode of transportation. Land, air and sea transportation can and should have different regulations.

Another ingredient that should be added to this product mix of sustainability, transportation and regulations is food safety and the integrity of the food materials being transported whether it is ingredients, work-in-process foods or finished products. Various modes of transportation can affect the chemical composition, physical appearance, nutritional value and quality and safety of food. It could be straightforward to start implementing restrictions, regulations and new methods of how to package, manufacture and transport food to satisfy the growing trend of sustainable food behaviors. However, what cannot get lost in this is the issue of food safety and integrity.

Sustainability More than Recycling and Litter

When discussing regulations around transportation and food, many people immediately think of littering, of some uncaring individual throwing a soda pop can out of a car window. Littering regulations, laws, fines, penalties and public service campaigns have been in place globally for more than 50 years. The next time you go outside, take a look around at how effective those have been. Sustainability goes far beyond the issue of litter. One area that works hand in hand with transportation of food is climate change. Governments have been evaluating the current practices and have begun implementing changes designed to positively affect climate change. Some examples include:

  • 23 American states and Washington, D.C. limit idling by some or all vehicles.
  • The California Air Resources Board adopted the TRU Airborne Toxic Control Measure in 2004 to reduce diesel particulate matter pollutant emissions.
  • In 2020, the International Maritime Organization will implement a new regulation for a 0.50% global sulfur cap for marine fuels.

The food and beverage industry is actively embracing other changes that affect sustainability. Electric trucks fit well with the F&B distribution hub model, with clean, quiet, short-run deliveries. Fuel usage during transportation is being considered from every angle. Local and regional food systems, where farmers and processors sell and distribute their food to consumers within a given area, use less fossil fuel for transportation because the distance from farm to consumer is shorter. This shorter distance also can help to reduce CO2 emissions.

Change Starts with Money

During many conversations I have had with my wife about a variety of subjects, especially those that can be considered controversial, one of us always raises the same question which is: “When in doubt, what is it all about?” And most of the time, the answer is money. Regulations around sustainability in food manufacturing are being driven by demands made by the consumer. The purchasers of the finished food product dictate almost every aspect of that product to the manufacturer because, let’s face it, if the consumer doesn’t like it, they won’t buy it. And if they don’t buy it, what will eventually happen to the manufacturer? That’s right—it goes out of business.

Now there is a good definition of sustainability or at least of what is not sustainable. From the transportation side of things, manufacturers in almost all cases pay the freight of shipping their food products to the members of the value chain. This obviously affects the costs of goods sold, which is a direct component of the bottom line and the profitability of the business. And with margins typically low in food and beverage manufacturing, transportation costs are always on the minds of the executives. So as the drive for sustainable transportation practices rolls into food manufacturing, you can bet that in addition to meeting sustainable practices, they will fit into the financial plans of the organization as well.

Sustainability: Just Another Component in a Long Line of Disruptors in Food Manufacturing

Years ago, when the topic of disruption in food manufacturing came up, many would mention things like a customer changing an order, an ingredient not arriving on time, or a packaging line going down for an hour. Today, these occurrences are just part of the day-to-day process and reality of food manufacturing. They are going to happen, and disruptions are the things that will make a food manufacturer have to change their business model and force them to change their philosophy and begin to evaluate their business practices and systems to adjust to the world in which they operate.

Sustainability is another one of those disruptions that will impact the process of food transportation long term. Sustainability will be an area that eventually forces manufacturers to operate within new regulatory parameters imposed on how they produce and ship their food. Through these changes, manufacturers will have to ensure that food meets the current and future safety regulations while maintaining profitability. That is where real sustainability will be measured. Changes to business, movements like sustainability are adding to the disruption of the food industry at unprecedented rates of speed. In order to survive and thrive, and to meet these disruptions head on and be sustainable themselves, global food manufacturers must be able to innovate and adapt their business models.

Chris Keith, FlexXray
FST Soapbox

COVID-19: We’re In This Together

By Chris Keith
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Chris Keith, FlexXray

It’s no secret that the COVID-19 pandemic had a major impact on industries and individuals around the world. According to the World Health Organization, as of June 21, 2020, there have been 8,708,008 reported cases of COVID-19 globally, including 461,715 deaths. In a recent article by Forbes, healthcare contributor William Haseltine stated that we are gathering personal stories and statistics right now around COVID-19 survivors who have suffered permanent injuries from the virus. Many experts believe that COVID-19 is also an economic downturn trigger. Author and financial planner Liz Frazier says that even as recessions are a normal part of the U.S. economic cycle, lasting about five and a half years on average, the possibility of a recession starting due to the outbreak would be unprecedented.1 The COVID-19 pandemic is a natural disaster that rocked the world and is a reminder of how connected people are in a global economy.

As quarantine regulations and temporary closures happened across the United States, businesses had to mobilize quickly, pivoting their strategies, distribution efforts, products and beyond to accommodate the new safety measures and external pressures. The food and beverage industry was no different. Although food manufacturers were deemed essential in the United States by Cybersecurity & Infrastructure Security Agency (CISA), manufacturers had to adapt to a new normal during the shutdown.2 Some of the biggest changes that occurred in the food manufacturing industry include fluctuating customers, prices, product and ingredient availability, packaging, distribution, and food quality and safety.

Shifting Demand, Customers and Food Pricing

Sharp changes in food prices and product availability shocked supply and demand and impacted the entire food supply chain across the United States. According to the USDA, there were record levels of demand for food at grocery stores, and, on the supply side, there has been a reduced supply of meat products over the period of quarantine as meatpacking plants faced temporary closures, decreased slaughter pace, and slower production due to COVID-19 regulations.3 Poultry prices took a sharp dip and have been rebounding, hot dog prices are at an all-time high due to increased demand, and beef prices have been climbing due to scarce supply and limited fresh production. Food pricing fluctuation is one of the largest food industry impacts felt directly by the general public and the on-premise sector. Restaurants and bars were crushed by the skyrocketing ingredient prices and mandatory temporary closures due to COVID-19.

As restaurants, school cafeterias and hotels were temporarily shut down due to quarantine restrictions, the food manufacturing industry’s most prominent customers practically disappeared. Before COVID-19, the USDA reported that in 2018, restaurants provided approximately 50% of meals consumed on a daily basis, up from 41% in 1984.4 When COVID-19 hit, consumer trends showed a monumental shift to eating at home. During the height of the pandemic, more people ordered take out from fast-casual dining places and ate from home. A recently published study reveals survey findings that suggest American’s food habits are shifting, as 54% of respondents confirmed they are cooking more, and 46% of respondents, baking more.5 As customers and demand changed, products and packaging had to follow suit.

Scores of manufacturing facilities had to rapidly respond with different products to meet changing consumer demand, despite already being in mid-production for products for restaurant kitchens, cafeterias, and the like. Most of these large-scale and wholesale products would never make it to their original, intended destinations. Manufacturers swiftly adapted their production, creating retail-ready goods from product made or intended for restaurant or fast food supply. These food production facilities had to creatively find ways to change product packaging sizes, salvaging good product with take-home cartons and containers. Some processors pre-sliced deli meat for grocery stores around the country, as markets were unable to slice the meat in-store, dealing with restrictions on the number of people who could work at any given time. The food manufacturing industry showed great ingenuity, repurposing food and getting creative in order to keep the country fed and bridge the gap in convenience shopping that consumers have grown used to.

New Distribution Pressures

There were also disruptions in the food industry’s distribution channel, and the logistics of distribution were adversely affected. Facilities faced increased pressure to have tighter production turnarounds from new consumer behavior and out-of-stock situations as many markets dealt with temporary panic shopping at the beginning of the crisis. Food manufacturing facilities have always faced tight deadlines when dealing with fresh and refrigerated product. However, COVID-19 introduced new critical, immediate needs to the food supply, and, more than ever before, facilities were pressed for time to deliver. Some facilities didn’t have enough dock loading time, and certain cold storage facilities could not meet the raised demands for dock times, making it harder to get product through the distribution channel to consumers. Shipping and logistics came at a premium. Drivers and logistics companies were at capacity with their service offerings, and unable to mobilize to meet the needs of every manufacturing company.

On top of the pressures from consumer demand, manufacturing facilities had to procure PPE (personal protective equipment) in mass for all employees and adjust employee schedules to meet new national and state-wide quarantine restrictions that strained the system. The PPE requirements are part of the distribution logistics, as plants are unable to distribute safe product without adhering to the system’s regulations. Senior Vice President of Regulatory and Environmental Affairs for the National Milk Producers Federation, Clay Detlefsen, said in an article for Food Shot Global that the whole food industry’s system has been turned on its head, as manufacturers are concerned that if they start running out of PPE and sanitation supplies, they would ultimately be forced into shutting down their food processing plants.6

Regulating Food Quality and Safety

Perhaps one of the biggest concerns surrounding the food supply chain during the height of COVID-19 for both producers and consumers was food safety. While safety and quality are always a high priority in the food industry, rising concern around the transmission of COVID-19 became a new and unprecedented challenge for food quality experts. In February the FDA declared that COVID-19 is unlikely to pass through food or food packaging, but that didn’t stop public concern.7 It was critical for food manufacturers and producers to ease public fear, keep the food supply stable and eliminate foreign material contamination that would adversely affect consumers and brand reputation. A mass recall due to foreign material contamination would have dire consequences for the strained food supply chain during this historic crisis. At the same time, the pandemic limited quality and food safety teams, as key teams had to work remotely, shift schedules had to drastically change to meet new safety regulations, production lines cut in half, and quality and safety teams had to make rushed decisions when it came to reworking product.

Some plants that faced potential foreign material contamination risked sending their product into distribution without a thorough rework, up against tight deadlines. And some plants adopted a multifaceted strategy and did something they’ve never done before: Reworked product on hold for potential foreign material contamination themselves. Many of these companies reworked product with their extra available lines, to keep as many of their workers as possible, despite the fact that food production employees are untrained in finding and extracting foreign contaminants. Inline detection machines are also typically limited to metal detection, often incapable of consistently catching many other types of contaminants such as glass, stones, plastic, bone, rubber, gasket material, container defects, product clumps, wood and other possible missing components. Food safety is of the utmost importance when a crisis hits as the food supply chain is crucial to our success as a nation and as an interconnected world. Facing new pressures on all sides, the food industry did not neglect food safety and quality, even while adopting new strategies. There was never a doubt that the industry would overcome the new challenges.

Looking Forward

The food industry has rapidly switched business strategies, swiftly turned around new products, found new ways to align product traceability and work remotely while still meeting industry standards and production expectations. Manufacturing facilities repackaged and repurposed food to keep the country fed, maintained job security for many employees and procured PPE in mass. The food industry is also full of manufacturers and plants that accomplished things they’ve never done before. There are shining examples of heroism in the food and beverage space as a growing list of food businesses, restaurants and delivery services have donated to healthcare workers on the front lines. Many large companies donated millions of dollars and pounds of food to feed their teams, their communities and the less fortunate.8 In the midst of a large obstacle, we have reached new heights and discovered new capabilities.

The challenges aren’t over. The food industry is still facing the effects of COVID-19 shutdowns on businesses even during this period of re-opening in different parts of the country. A lot of places and companies have been hit hard, some even closing their doors for good. Forbes reported at the onset of the pandemic that Smithfield Foods shut down one of its pork processing plants after hundreds of the plant’s 3,700 employees tested positive for coronavirus.8 Tyson Foods also shut down several meat processing plants under threat of the virus.8 Smithfield and Tyson were not the only ones. Food Dive has a compiled tracking system for coronavirus closures in food and beverage manufacturing facilities, recording reduced production, temporary closures, and permanent shutdowns across the industry. We expect some of the COVID-19 challenges to alleviate over time and hope that business will slowly return to normal and previously closed facilities will be able to re-open. However, we strongly hope some changes to the industry will remain: Creativity, ingenuity, resilience, adaptability, and a strong commitment to customers and partners. The bottom line is we’re in this together––together, we’re resilient.

References

  1. Frazier, L. (April 21, 2020). “How COVID-19 Is Leading The US Into A New Type Of Recession, And What It Means For Our Future.” Forbes.
  2. Krebs, C. (May 19, 2020). “Advisory Memorandum on Identification of Essential Critical Infrastructure Workers During COVID-19 Response.” Homeland Security Digital Library.
  3.  Johansson, R. (May 28, 2020) “Another Look at Availability and Prices of Food Amid the COVID-19 Pandemic.” USDA.
  4. Stewart, H. (September 2011). “Food Away From Home.” The Oxford Handbook of the Economics of Food Consumption and Policy. 646–666. Oxford University Press. doi: 10.1093/oxfordhb/9780199569441.013.0027
  5. The Shelby Report. (April 17, 2020). “New Study Reveals Covid-19 Impact On Americans’ Food Habits.”
  6. Caldwell, J. (April 16, 2020). “How Covid-19 is impacting various points in the US food & ag supply chain”. AgFunderNews.
  7. Hahn, M.D., S. (March 27, 2020). Coronavirus (COVID-19) Supply Chain Update. FDA.
  8. Biscotti, L. (April 17, 2020). “Food And Beverage Companies Evolve, Innovate And Contribute Amid COVID-19 Crisis.” Forbes.
Megan Nichols
FST Soapbox

COVID-19 Led Many Dairy Farmers to Dump Milk

By Megan Ray Nichols
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Megan Nichols

Much of the news coverage surrounding the COVID-19 pandemic mentions infection numbers and fatalities. Those are undoubtedly important for showing parts of the overall impact. However, it’s easy to overlook the ramifications felt by some professionals. One recent example concerns the instances of dairy farmers dumping milk.

Numerous Factors Contributing to the Problem

The pandemic drastically and dramatically disrupted life. Many of the associated changes affected milk producers, but perhaps not in the ways people expect. As schools closed and restaurants operated on delivery or a takeaway-only basis, the demand for milk typically consumed in the food and educational sector went down.

Consider, too, that the pandemic forced the closure of enterprises that did not necessarily serve large quantities of milk every day but still likely placed ongoing orders with suppliers. For example, a daycare center might give toddlers boxes of dairy beverages each day during snack time. Coffee shops often add milk to their lattes or set out bottles for people who want to put some in their coffee.

When coronavirus cases emerged in the United States, many people panicked and flocked to grocery stores for essentials. Milk is often one of the staples people buy before winter storms hit, and they wanted it to prepare for the pandemic, too. One Target store in New Jersey sold out of its entire stock of milk in only five minutes. Stores responded by imposing per-person limits on the product.

If the demand exists, what caused the milk surplus? Part of it boils down to a lack of space at milk processing plants. A related issue is that processors typically serve particular markets. One might cater to retail buyers while another primarily addresses needs in the food service sector. They lack the infrastructure to pivot and begin accepting milk orders from a new type of customer, particularly if the milk-based product is substantially different, like sour cream versus ice cream.

A First-Time Phenomenon

Farmers discarding milk is not unheard of, but it’s not something many producers do regularly. Andrew Griffith, a professor at the University of Tennessee, said that some farmers had to do it recently for the first time in careers spanning decades. He explained, “It’s not that [dumping] hasn’t occurred from farm to farm.” Adverse weather conditions can delay pickups, and unexpected supply spoilages might lead to too much milk.

“But we’re talking about a level of dumping that is not common at all. There [are] a lot of farmers that are experiencing dumping milk for the first time in their 30- or 40-year careers,” Griffith said in an article published on The Counter.

The highly perishable nature of milk poses another problem contributing to the milk surplus. That aspect hit dairy harder than some other types of agricultural goods. People could put grain into silos, but storage is more complicated for dairy products.

Any exposure to higher-than-recommended temperatures causes spoilage. The subsequent risk to consumers means farmers must throw it away. Cold storage facilities are essential for the dairy industry. Statistics from 2018 indicated an average of 10.67 cents per kilowatt-hour for energy consumption at commercial facilities. However, cold storage facilities operate 24/7, so their energy needs are often higher than those of other commercial buildings.

Cows, dairy, farms
The coronavirus is only one of the challenges likely to impact the dairy industry in the coming months and years. Dairy consumption has been trending down for years. (Pexels image)

The delicate nature of the product is another unfortunate aspect that may lead to dumping milk. If a processor has no room to accept the raw goods, there’s nowhere for them to go. In April The Wall Street Journal reported that in one week, producers threw out as much as 7% of the milk in the United States from that period. The same story highlighted how a specialty cheese factory saw sales of its chèvre and ricotta drop by 95% in one day.

Coping With Dairy Industry Fluctuations

The coronavirus is only one of the challenges likely to impact the dairy industry in the coming months and years. A Statista chart profiles the progressive decline of milk consumption in the United States. The average amount of milk per person in 1975 totaled 247 pounds. It plunged to 149 pounds by 2017.

There’s also the issue of people showing a growing preference for plant-based milk alternatives. One industry analysis tracked sales of traditional and oat milk during mid-March. Purchases for the first category rose by 32%, while oat milk sales soared by 476%. A potential reason for that huge increase in the latter category is that supermarkets sell shelf-stable milk alternatives. Those often stay in date for months when unopened.

People can get them in the refrigerated section, too, but they may have preferred not to as they cut down their shopping trips due to COVID-19. Consumers also noticed the increasing number of milk-like beverages made from hemp, hazelnuts and other options. If a person tries one and doesn’t like it, they may try a different option.

Despite those challenges, some dairy farmers anticipated favorable trends—at least before the coronavirus hit. Producers get paid per 100 pounds of milk. Katie Dotterer-Pyle, owner of Cow Comfort Inn Dairy, said 2013 was a particularly good year for the rates. Back then, farmers received about $30 for every 100 pounds, although the price has stayed at approximately $17 per 100 over the past two years.

When Might the Milk Surplus Ease?

This coverage emphasizes the lack of a quick fix for the dairy industry strain. As restaurants reopen, that change should help address the problem, but it won’t solve it entirely. Some enterprises refocused their efforts to better meet current demands. One Dallas-based plant that handles dairy products more than halved its output of cardboard milk cartons and increased production of whole and 2% milk for the retail sector. It is now back to normal manufacturing runs.

As mentioned earlier, though, many processors can’t make such changes. Dumping milk becomes a heart-wrenching practice for hard-working producers. Many tried to compensate by selling their least-profitable cows for slaughter or making feeding changes to reduce the animals’ production. Some private entities committed to purchasing milk from farms and getting it to food banks. Other analysts say the government should step in to help.

People in the farming community support each other with tips and reassurance, but most know they could be in for a long struggle. As supply chains recovered from the initial shock of COVID-19, most people stopped panic buying, and stores no longer set product limits. Things are moving in the right direction, but the impacts remain present.

A Complicated Issue

Many state leaders have let businesses reopen, and others are following. Any step toward a new kind of normal is a positive one that should gradually help the dairy sector. However, much of what the future holds remains unknown, mainly since this is a new type of coronavirus, and scientists still have plenty to learn about mitigating it.

Tatiana Bravo, INTURN
FST Soapbox

Looking Ahead: The Digital Supply Chain and Fast-Moving Consumer Goods

By Tatiana Bravo
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Tatiana Bravo, INTURN

The global supply chain is changing. The fast-moving supply chains that power many of the world’s top businesses are being transformed before our very eyes, as companies all over the globe compete to beat their competitors through digitalization.

What we’re now seeing is the emergence of a digital supply chain, with processes powered by innovative and exciting new ideas turned into software.

As we look ahead to the coming months and years, we can expect to see incredible changes affecting the supply chains of all manner of businesses. In fact, we’d go so far as to say that any business that’s serious about competing on the global stage will have no choice but to embrace these innovations and go digital.

So, what exactly can we expect to see from the digital supply chain in the near future, and how might these changes affect fast-moving consumer goods?

Advanced Analytics

The potential of analytics is incredible, particularly when you look at supply chains.

Recent years have seen data rise to the forefront of many business leaders’ concerns. Increasing numbers of companies have started to pick up on the impact that informative data can have on their strategies, and ultimately their chances of ongoing success in the marketplace.

The supply chain is no exception to this rule. As the power of analytical software improves, businesses will be clamoring to gain access to, and make use of, the huge amount of data that’s now available.

We’re likely to see those managing data put under increasing amounts of pressure to use that data effectively, helping to inform decisions that impact supply chain processes and limit wastage. This data will also be invaluable in determining the real impact of critical supply chain decisions and informing future strategies.

The Emergence of AI
AI is the next big thing in business, and it’s set to transform the way the digital supply chain works. Artificial intelligence is now emerging as a hugely powerful tool, capable of helping businesses to make the right decisions for their supply chains.

As the potential of AI improves, we can expect to see its impact felt more widely throughout global supply chains. Look out for AI being used to inform businesses on changing customer preferences, disruptions in supply chains, increasing costs and other obstacles to product delivery. Artificial intelligence will predict future problems before they occur, giving business owners plenty of time to steer clear of potential pitfalls and keep things moving.

AI will also prove invaluable when it comes to anticipating the purchasing habits of existing customers and establishing the value of new leads and potential purchasers. If used effectively, this information could have a dramatic impact on the success of a wide range of different businesses—particularly those focused on fast-moving consumer goods.

Automation of Supply Chain Tasks

Automation itself isn’t a new idea, but the way it’s being used in digital supply chains is.

In the coming months and years, we’re likely to see automation transform the way supply chains work. The automation of processes will help businesses to cut costs, improve efficiency and eliminate any skills gaps by which they may be affected.

Supply chain tasks are being automated with the help of something called robotic process automation, or RPA. This form of automation is even smarter than traditional automated processes.

Informed by software bots or AI, RPA is a significant step forward in the world of digital supply chains. It’s highly scalable, incredibly effective and, importantly, it’s been proven to be hugely reliable. So, even businesses dedicated to the very highest standards of quality are now beginning to automate processes using RPA.

Climate Change Challenges

Climate change continues to be a hot topic in the news, and supply chains are likely to feel the impact of these concerns.

Consumers’ purchasing habits are increasingly led by environmental considerations. It’s therefore important that companies consider the environmental impact of their supply chain processes and provide visibility on these, for those who have an interest.

It’s expected that issues surrounding sustainability will become ever more critical in the future. Inevitably, supply chains will be impacted. Companies making use of digitalization will be best placed to prepare for the challenges of sustainability, reducing waste and making speedy adjustments to their processes as and when required.

A Shift in Transportation

The digitalization of supply chain processes has given ecommerce companies and online retailers the edge over traditional high street retailers. And this has led to a shift towards online shopping, which shows no sign of waning. As we continue into 2020 and beyond, we can expect to see more and more consumers choosing to shop online, and that’s going to have a knock-on effect on the transportation of goods.

Experts are predicting a transportation crunch, when demand begins to outstrip the availability of transport for online goods. This is likely to lead to a shift in how goods are transported, which could well align with changes to logistics designed to improve sustainability and reduce the carbon footprint of products.

Changes in Trade Agreements

Changes in trade agreements between many of the world’s leading economies are likely to impact supply chains in the future. With Brexit looming and trade issues between the United States and China continuing, it’s important that companies remain aware of how political decisions might affect the way they work.

Digital supply chains provide enhanced flexibility for companies, enabling organizations to quickly adapt to changes that could be outside of their control. So, companies that continue to provide a fast and reliable service despite changing trade agreements could well gain an edge over less efficient competitors as time goes on.

Companies making full use of digitalization will be best placed to make the most of new opportunities, and avoid supply chain disruption as a result of changing trade agreements.

Security Concerns

While businesses are beginning to realize the potential of the data that’s now available to them, consumers too are opening their eyes to the data that they share with the world. And this increased awareness has led to consumers being newly concerned about the data they reveal, and how secure that data is once it’s been shared.

Companies looking to make full use of the digitalization of supply chain processes will be incredibly reliant on data to maximize their efficiency. For this reason, it will be vital that companies establish trust with their existing customers and new prospects.

Security measures should therefore be top of the agenda for forward-thinking businesses. Companies that fall foul of security breaches and data losses are unlikely to be trusted with consumers’ data going forward, and this could have a detrimental impact on the efficiency of their digital supply chains in the future.

Digitalization is sweeping through the supply chains of companies all over the planet, and its potential is mind boggling. The automation of supply chain processes has already transformed the way supply chains are managed, massively increasing the speed and efficiency of a huge number of different companies.

In the future, we’re likely to see further improvements to digital supply chains, as companies begin to make better use of artificial intelligence and robotics. Look out for supply chains managed by AI-powered software and RPA, and get ready for astounding productivity from early adopters of these exciting new technologies.