by Kari Hensien, President of RizePoint
The food industry learned some valuable lessons from the COVID-19 pandemic, including the need to be nimble, flexible, and creative to weather that storm. In fact, the biggest learning from COVID is that restaurants and other food businesses must be prepared for any crisis – and ensure their suppliers all along the supply chain are also prepared and resilient.
These lessons are essential because we’re now facing simultaneous challenges that are negatively impacting our food supply (and our businesses):
- COVID-19 repercussions are widespread and long-lasting. Even though the worst of the pandemic is over, we’re still dealing with COVID aftershocks, including supply chain disruptions, product and labor shortages, and sky-high prices.
- The Ukraine/Russian waris causing a “food catastrophe”. Ukraine and Russia, two of our world’s biggest big food commodity exporters, supply 60% of the global sunflower oil production. Before the war, Ukraine exported 6 million tons of products, including grain, per month, but now are only exporting 15-20% of their typical capacity. Additionally, 20 million tons of grain are currently being stored in Ukrainian silos during the exporting pause. If these products haven’t been stored safely, the products may have declined in quality and may be unfit for human consumption. This is not just a short-term problem. Next year’s harvest is expected to be lower than normal by at least 30 million tons because of war-related disruptions in the farming cycle.
- Extreme weather is causing more world hunger because of crop failures, livestock deaths, and poor soil conditions. Extreme drought conditions are destroying crops out west. The Midwest, which produces approximately three-quarters of our country’s corn, is facing the opposite problem, with frequent floods washing away soil and negatively impacting their corn supply. Record-setting heat is torching vegetation in Europe and Australia, and an ongoing heatwave is forcing India to pause exports.
- Product shortages. We’ll never forget the toilet paper shortages of 2020 and, unfortunately, we’re still experiencing significant product shortages on a variety of items, including popcorn and sriracha. Globally, numerous products have become extremely expensive and/or difficult to find, including lettuce in Australia, onions and salami in Japan, and bottled beer in Germany. Restaurants globally are struggling to find substitutions.
- Soaring inflation is leading to leading to increased food insecurity. For instance, even before the Russia/Ukraine war, prices for wheat and corn were 40 to 50% higher than average prices from the past decade. As a result, the number of food insecure people is predicted to grow globally from 440 million to 1.6 billion, as an astonishing 250 million people face famine.
- The ongoing labor shortage is disrupting the supply chain. Crates of perishable foods are rotting in shipping containers, warehouses, and trucks. There aren’t enough workers to get these foods safely to their final destinations, leading to excessive food waste.
During the COVID crisis, our industry was reactive, not proactive. We simply didn’t see the pandemic coming and weren’t prepared for such epic disruptions to our supply chains, labor pool, and food supply. With the advantage of hindsight, we’ve learned the importance of proactively preparing for any eventuality.
As we face a perfect storm of threats to our food supply, restaurants and other food businesses should proactively:
- Develop back up plans. What if your restaurant relies on Midwestern corn or lettuce from California, and weather events mean these items are unavailable for the foreseeable future? What’s your backup plan? Do you have reliable produce vendors closer to home? Can you partner with a nearby vertical farm, where produce is grown indoors and immune to the weather perils that are plaguing traditional farms? If you’re switching to new vendors, do you have systems in place to determine whether they adhere to the highest safety and quality standards? Today, many restaurants are using technology to proactively plan, anticipate, and reduce product delays.
- Rely on tech tools. Today’s digital solutions allow you to audit and evaluate your supply chain’s sustainability and resilience. It’s essential to use technology to better track all the suppliers along your supply chain, organizing supplier certifications into a system you can see and manage. Tech tools can elevate every aspect of a restaurant’s operations, including scheduling, inventory, purchasing, tracking safety certifications, and more. At a time where every penny – and every morsel of food – counts, tech solutions will be your lifeline.
- Think local. Various issues are negatively impacting food exports, the supply chain, and the food supply. And many of our country’s crops are being destroyed by extreme weather, compounding food supply problems. This is a good time to focus on local products, buying from local farms or growing your own produce to ensure a continuous supply of fresh, safe foods. If your business lacks space, even planting herbs in rooftop or windowsill gardens can be helpful.
- Consider vertical farms. Increasingly, companies are looking for alternate solutions like vertical farming, which grows crops closer to their final destinations. Growing foods closer to where they’re needed helps reduce food deserts, lower safety and quality risks, and minimize food wastage. Additionally, vertical farms are typically indoor, climate-controlled spaces, which protects crops from severe weather, like droughts, extreme temperatures, flooding, etc.
- Reduce food waste. Since prices are so high – and certain products are difficult to get – it’s important to reduce waste and make every piece of food count. Use tech solutions to help minimize food waste, make inventory more efficient, and provide predictive ordering and historical sales patterns so you can make more informed purchasing decisions. Make waste reduction part of your company’s culture and encourage buy in from all employees. Encourage kitchen staff to be creative and use every scrap of food. Stale bread can become croutons, veggie scraps can be used to make broth, past-their-prime fruits can become a delicious cobbler or other dessert.
- Revamp your menu. Last year, 75% of restaurant operators tweaked their menus due to supply chain disruptions. Now is a good time to streamline and simplify your offerings. Buy fewer ingredients and use each product multiple ways. Offer more plant-based meals to reduce costs. Use what’s fresh, local, and in season. Transform yesterday’s leftovers into today’s specials. Find suitable substitutions for products that are hard to get or prohibitively expensive.
- Prepare for things to get worse. While I don’t want to sound like a Negative Nelly, many experts are forecasting that our food supply issues could get worse before they get better. If we look at the Russia/Ukraine war as an example, this year, we’re facing logistics issues, such as diminished exports. But next year, the Ukrainian food supply could be in danger since their annual farm cycle has been disrupted, which will result in fewer crops to harvest in the future. Experts predict that Ukraine’s production of grains, such as wheat, will decrease by 35% to 45% for the next harvesting season due to today’s conflict. Take proactive steps now to prioritize waste reduction. Research new suppliers. Grow your own produce. Stay aware of industry trends and current events – and how they may impact your business. And, importantly, utilize tech tools to streamline operations and make important tasks more efficient and accurate.
Our food supply is in peril, with a combination of extreme climate conditions, the Russia/Ukraine war, and ongoing COVID repercussions. While we don’t have any control over these simultaneous problems, we do have control over our own actions. Therefore, the food industry must act proactively and be prepared, resilient, and nimble to deal with this perfect storm of challenges.
As President of RizePoint, the longest-lasting quality management vendor in the marketplace, Kari Hensien has been instrumental in launching the company’s Ignite Supplier Certification Management solution and adding new features to make the platform even more valuable. Ignite allows companies to gather, organize, and manage supplier documentation and information in a centralized location, track status and deadlines, ensure compliance, and reduce time-consuming administrative tasks. Ignite leverages the latest tech stacks in cloud computing to deliver better speed of service, security, and performance, with shortened development cycles. For more information or to discuss RizePoint’s solutions, please contact Kari at kari.hensien@rizepoint.com.
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