Grocery shelves are not returning to normal this year
Major food and consumer manufacturers being short of supplies on certain items “will be a challenge in the grocery industry” during the last few months of the year, said Steve Howard, vice president of merchandising at Bristol Farms, a California grocery chain. Suppliers are warning the company of “potential shortages” of food, glass jars and packaging containers. In response, Bristol Farms is working to take inventory “earlier than any other holiday,” Howard said.
Manufacturer buying limits were rare before the pandemic and create “less than full conditions” for customers at Morton Williams stores, said Steve Schwartz, the chain’s New York area sales manager. Morton Williams tries to use secondary suppliers when its major suppliers of essential food and household products cannot fulfill orders.
“This is not your ideal situation,” Schwartz said. Some customers have been forgiving when they are unable to find what they are looking for. But others “just want to know why they can’t get their item.”
Shortages in grocery stores are nowhere near as visible as they were at the start of the coronavirus epidemic, when shoppers flocked to stores to stock food and essentials. But supply in the grocery store aisles has not fully recovered to pre-pandemic levels, and companies such as Costco and Sam’s Club recently reinstated purchasing limits for customers on paper products and bags. cleaners.
Before the pandemic, 7-10% of products were typically out of stock on shelves, according to IRI.
When supply is tight, manufacturers often cut out some of their fringe items to focus on ramping up production of top-selling products, said Krishnakumar Davey, president of IRI’s strategic analysis practice. They also tend to cut more expensive products to make, according to Davey.
“The new standard”
Some food brands impose allowances, or purchase caps, for certain products at grocery stores and distributors, while other sellers more generally warn of limited availability. Suppliers typically allocate products when there are supply shortages.
The four distributors shared the email with CNN Business on condition of anonymity to avoid jeopardizing their supplier relationships.
Kellogg spokesperson Kris Bahner said in an email the company has seen increased demand since the start of the pandemic as people ate more meals at home. Bahner said the company is working with retailers “to ensure that our food flows through their systems” and, in cases where capacity is limited, it limits orders over certain time periods. The company did not specify how many retailers received award notifications.
Mondelez is experiencing “limited availability” on items such as Sour Patch Kids and Swedish fish candy, Toblerone chocolate and Halls cough drops “due to supply chain constraints,” the company said in an Oct. 1 email to a distributor. Mondelez estimated in the email that the “pick up date” for these items would be February or March of next year.
A spokesperson for the multinational food company said in an email that the company faces “high demand for labor” and “logistical challenges”. Mondelez believes it is “relatively well positioned to meet the challenges of the market and will continue to monitor things closely” to deliver products to retail customers and buyers on time. The company also did not specify how many retailers had received limits on these items, but said “we are preparing communications for our sales team to use, if any, when they engage. with its customers “.
Unilever told a distributor in an email on September 14 that “labor shortages continue to cause limited ability to meet demand” and that it is deprioritizing production of some products. including the flavors of Ben & Jerry’s Cold Brew Caramel Latte and Ice Cream Sammie, Breyers Vanilla Fudge Ice Cream and Firecracker popsicles “until we are able to return to a stable state of supply”. The company said it would “instead focus the working hours on our top selling items.”
“Like many industries, it can be difficult to get all of our products to stores at times, for various reasons related to sourcing and distribution,” a spokesperson for Unilever told CNN in an email. .
Packaging issues also continue to be a problem. For example, some seasonings are in limited supply due to difficulties in supplying glass bottles.
A McCormick representative said in an email to two distributors on September 20 that “our US cylinder supplier has shut down due to a Covid-related issue and we have not received any cylinders for several weeks.” for its range of gourmet spices. “The lack of bottles has impacted our production and is eroding our safety stock down the line,” said the representative. As a result, McCormick said, it would ship around 70% of what it previously planned, and the company was encouraging customers to cancel their promotions in November and December for the spice line.
Lori Robinson, spokesperson for McCormick, said in an email to CNN Business that “Gourmet is the only product line affected by this packaging shortage,” and the company’s most recognizable red-cap spices will be fully in stock during the holidays, which customers can use as a substitute for gourmet spices, she said. The company did not say how many retailers have received gourmet seasoning award notifications.
And some sizes of Marie Callender’s frozen pies might be harder to find.
Conagra said in a Sept. 27 email to a distributor that it was putting an allowance on Marie Callender’s 10-ounce and 15-ounce pies until Nov. 29, because she “ran into problems with materials in the box. ‘packaging from our supplier of trays and cartons, causing production downtime. “
Conagra did not respond to requests for comment.
Danielle Wiener-Bronner of CNN Business contributed to this article.