As we round the corner on the most tumultuous two-year period the food and beverage supply chain has ever seen, it’s become evident that this will be another year of learning. Due to the Russian-Ukrainian conflict and other such issues, the global chain is beginning to buckle and break under pressure, sanctions, and other delays. While this has left many industry leaders reeling, it also has provided several worthwhile lessons that businesses can apply to their side of the space. Below, we’re examining the current supply issues of the time, and how food and beverage business owners can successfully navigate around them.
What is the supply chain and how does it apply to the food and beverage industry?
The symbolism of a “chain” shows how interlinked and reliant every element of the distribution system truly is. This is especially true for large suppliers or distributors who may be working out of just one or a select few vendors to meet their supply needs. When this is disrupted for any reason, subsequent shortages can occur on a global scale, depending on the severity and type of item that’s limited. For example, the effects of a single shortage item that is a raw product, such as wheat, may be more limiting and devastating to the industry than a specific flavor of trendy snack food.
What are the issues facing the food supply chain in 2022?
There are several global-scale issues at play. Below are just a few issues that suppliers are dealing with in 2022, as well as strategies that they are using to get around them.
Crop failures and weather instability across the globe are causing the loss of raw materials and foods that are vital to the overall chain and fulfillment needs. This is leaving many brands searching for alternative solutions that will still fit within the time frame and parameters that they need in order to fulfill their ongoing order pattern.
To get around this, food and beverage manufacturers are considering going outside of the box and seeking alternative solutions — such as vertical farming and integration, sourcing from smaller farms, or creating a decentralized production solution that features the “best of both worlds” from each production option. These often come outfitted with several different backup plans to ensure that both the brand’s and the client’s needs are met under a variety of difficult or dynamic circumstances.
The COVID-19 pandemic shook businesses to their very core, posing significant challenges and trade delays as countries globally weathered the effects of various strains and continuation of the virus. Even in periods of abatement, the effects of the viral spread still remained littered at every step of the supply chain, leading to massive unemployment peaks, changes in workflows, and newly-created health and safety protocols that took additional time and resources to complete prior to any work being done.
To get around these delays, there was little that organizations and brands could do at the start of the pandemic. As these few years have passed, many are seeking a more decentralized supply structure and have forged local partnerships for raw food and beverage materials that can help them to support their business. As a positive consequence of this, companies have found greener solutions to their material sourcing needs, as local connections offer more fuel-efficient methods of transport in many cases. This has also led to distributors and manufacturers that are smaller pivoting to remain competitive during this time of need, resulting in higher rates of competition and potentially lower prices as a result.
As tensions rise with the Russian-Ukrainian conflict, as well as with The People’s Republic of China, and others, international instability will play a major role in the food and beverage industry in 2022. This type of volatility has led to shortages of raw materials, skyrocketing costs of commodities, and overall dispersal and distribution disruptions.
To get around this, many are looking to the government for assistance. While Congress works to mitigate the effects of the changes, food and beverage manufacturers may work with what tools they do have to begin to adapt. Switching to more streamlined processes that rely on simpler workflows, fewer ingredients, and locally-sourced alternatives can help to maintain normalcy amid these types of changes. Carefully watching the market can help stakeholders to find new opportunities to pivot into more profitable partnerships, or to anticipate any potential disruptions down the line.
Looking to boost your food and beverage manufacturing success in 2022?
Inecta is your premier choice of software to manage your food and beverage manufacturing and distribution processes in 2022. With over 20 years in the industry, Inecta knows how to assist your businesses from your current stage of development, and elevate your processes to be more efficient, adaptable, and tailored to the needs of your business. For more information about what Inecta could do for you, please give us a call at (800)-632-0573