COVID-19: How the Supply Chain is Pivoting to Meet New Industry Demands
The newest word on everyone’s lips is “pivot.”
It doesn’t matter which industry you’re in, the Coronavirus pandemic has created a situation that requires swift pivoting.
With suppliers and distributors experiencing an immediate and enormous decrease in demand from restaurants during the crisis, the world’s food supply is quickly being diverted to where it’s needed most.
Mary Coppola, vice president of marketing and communications at the United Fresh Produce Association, estimates that losses to the food supply chain are currently topping $1 billion per week.
Food Where It’s Needed
In addition to donating 2.5 million meals to those in need, on March 24, foodservice distributor Sysco’s President and CEO Michael Hourican said in published reports and in a release that the company, which normally supplies institutions such as restaurants, schools and colleges, was aggressively pivoting its support to help retail grocers.
Part of that support for grocers involves Sysco acting as a third-party trucking company, transporting supplies from point A to point B, supplying fresh produce and meat, and, as of this past Friday, partnering with Kroger to lend temporarily furloughed Sysco employees to Kroger stores where they are needed most. In Chicago, the local Sysco arm donated foodstuffs to local chefs, who worked together to distribute meals to laid off or furloughed hospitality workers.
Nearly every supplier has a similar story.
Sirna & Sons, which has provided produce to the industry for more than 80 years, has made critical changes to its operations over the last couple of weeks.
Anthony Sirna, head of business development, says that while the company is maintaining existing customer relationships, they have also reduced labor and began selling to retail stores. The biggest change for Sirna & Sons is its new online grocery for consumers. “The website was created in order to streamline the process of taking orders for both our employees and the public,” says Sirna. The online grocery has become a service for the community as well as a way for Sirna & Sons to sell some of its inventory.
When backed up against the wall, the first concern of suppliers and distributors is getting food where it needs to go. This means redirecting food that may not be needed by some—not all—restaurants right now. “We’re working with schools and food banks across the country to ensure that they have enough fresh produce available,” says Coppola. “In a lot of cases, these are donations, so it’s a loss of sales, but it’s not a loss of healthy, fresh produce.”
Building and Growing Supplier Relationships
Now more than ever, it’s important to keep the lines of communication open between yourself and your suppliers and distributors. Let them know where you’re struggling and how they may be able to help. “The fresh produce growers and distributors are craving opportunities to keep their food in the supply chain,” says Coppola. “The produce industry is full of optimistic people, and I believe that what we’re doing now is putting new business models in place that may be sustainable once we’re all back in business.”
Businesses are changing and evolving every day, so change with them. “Be as flexible as possible right now,” says Sirna. “Keep your inventories as low as possible, especially on perishable products.”
In the meantime, figure out what works best for your individual business and have a conversation with your supplier. Adjust delivery schedules and routes and examine your inventory. “Be flexible with product types because inventories may be lower than usual,” says Sirna. “Call to ask which products are best buys.”
The food is there, and your suppliers and distributors will remain your partners throughout this process, however long it takes.
-Liz Barrett Foster is an award-winning business journalist specializing in the hospitality industry. Learn more at lizbarrettfoster.com.