The Covid-19 pandemic has had a profound effect on all aspects of society from our cherished institutions, to our ability to freely travel the globe, to how we view our health and wellbeing. Included in the long list of pandemic-influenced outcomes is how ingredients are located, sourced and transported for food and beverage production. The public’s attitude towards what is used in the production of food and how those ingredients influence health and wellness have also evolved over the course of the last year and a half. The pandemic affected our global and domestic supply chains, revealing many defunct areas in procurement and transportation. In all – the COVID-19 pandemic has continued to redefine how ingredients are sourced and with it, the public’s attitude towards what is purchased and consumed.
Pre-pandemic, our food and beverage supply chains were fairly stable. Prior to the spring of 2020 consumer spending in the U.S. saw around 4 percent growth over the previous five years. Sales and revenues were split fairly evenly between retail outlets and food service companies.The food supply chains which supported this stable growth, while not perfect, got the job done. Then came March of 2020 and most of the U.S. and the world at large experienced lockdowns on a scale never before seen. The Covid-19 pandemic brought on new challenges such as a loss of food workers, both upstream and downstream due to restrictive movements and a decline in the labor force. Consumer demands also changed as eating out in restaurants almost ceased to exist, ushering in a resurgence for cooking at home. Food production facilities closed or were severely understaffed. Food trade restrictions both locally and internationally pressured the world’s food supply chain. And pertinent to our topic, the way in which ingredients are sourced began to change.
Ingredient sourcing has always been a challenge, even in the best of times. Many factors contribute to the complexities of sourcing including geography, regulations, governmental policies, country specific infrastructures, the continuing climate crisis and of course, business to business relationships. On top of all these existing issues, the pandemic added an additional layer of complexity. The following are five key areas which provide a snapshot of the challenges faced by those in the sourcing business during the pandemic.
The Geographical Area An Ingredient Is Sourced From
COVID-19 created a new urgency to source ingredients locally. While local sourcing was experiencing an uptick pre-pandemic, once worldwide lockdowns took effect, companies quickly found themselves looking locally to satisfy shortages for product ingredients. While it is true that the majority of manufactures can’t source everything from local farms or markets, the pandemic forced manufacturers to source creatively and establish local alternatives. Creating products which contain exotic, functional ingredients has been trending. However, the pandemic has forced many manufactures to look closer to home for ingredient substitutions. The vast geographical distances involved with procuring ingredients has become that much more apparent as we continue to navigate the pandemic.
Supply Chain Disruptions
The COVID-19 pandemic is the perfect example of a supply chain disruption playing out in real time. As farms and factories were shut down or severely restricted by labor shortages, harvests and processing screeched to a halt. Suppliers found it extremely difficult to source and deliver on key ingredients. Manufactures suddenly were in need of product reformulations using ingredients that could be sourced locally or derived from different source countries.
As a result of this massive disruption, new response plans have been developed to address potential complications including new sanitization methods, state-of-the-art monitoring systems to detect issues along the chain, improved screening procedures for workers, and enhanced procedural methods for cleaning and disinfecting facilities.
The pandemic greatly affected imports. Thousands of containers packed with important ingredients are still waiting offshore. While the pandemic was the catalyst for the massive supply chain disruptions we are currently facing, our domestic supply chain infrastructure has also slowly become antiquated and not as efficient as it once was. It is loaded with potential bottlenecks from unloading containers to mismanaged rail transport to trucking shortages, skyrocketing shipping costs or port mismanagement. The pandemic has made it apparent that ingredient transportation methods must be reevaluated and overhauled. If the sourcing industry is to survive the next pandemic it is imperative for companies to closely scrutinize their existing transportation models.
Ingredient Sustainability And Climate Impact
Interest in ingredient sustainability is at an all time high. The pandemic has caused many consumers to take note of what ingredients are in the products they eat and drink. Health and wellbeing are at the top of the list when it comes to what people are purchasing. Consumers are looking to maximize the healthful benefits that foods provide with the result being many companies are actively searching for ways to provide ingredients that are grown, packaged and transported in environmentally sustainable ways. Perfect examples of ingredient sustainability are sorghum, okara flour and shelf-stable plant milks. Sorghum can be grown domestically here in the US, which cuts down on transportation costs while also providing jobs here in the US. Okara flour produced by Renewal Mills is an upcycled product made from soybean pulp produced during soybean milk production. This is a great example of using every part of an ingredient. Finally, shelf stable plant milks do not require refrigeration during transport or while sitting on store shelves, reducing this product’s energy consumption.
Supply chain issues like those experienced during the pandemic can be minimized if companies seek out quality relationships with suppliers. Having secure partners which can be relied on to deliver ingredients to ingredient suppliers is an important link in the overall food and beverage supply chain. A number of food-borne illnesses can be prevented by using trusted sources for obtaining raw ingredients. Ensuring products are being produced, stored and transported properly is critical to meet a companies’ production, environmental and social goals. One benefit of the pandemic is the attention being paid to how suppliers provide ingredient traceability. A supplier should be able to track a product through all its stages including harvesting, production, and distribution. In addition, a supplier should be able to provide quality assurance for any ingredient they are sourcing. The quality assurance of any raw ingredient should be determined by testing the product for authenticity, consistency, potency and purity.
Sourcing ingredients for food and beverage development has always been challenging. The difficulties associated with proper sourcing is the reason independent sourcing companies exist. Reputable companies take the time and resources required to seek out specific ingredients that might be unusual or unheard of within mainstream development circles. Stellar sourcing companies invest an incredible amount of time and effort in cultivating relationships with growers and suppliers. It is imperative to find partners who can provide food sustainability and security up and down the supply chain. The pandemic has attenuated and clarified what proper sourcing looks like. Here at Food Business Consulting – we have used the pandemic as another opportunity to improve upon our ingredient sourcing and foster new relationships with companies with proven track records. Our goal is to provide our clients with the highest quality ingredients for their food and beverage production.