As they stroll through the aisles surveying the goods on offer, most people don’t give
a moment’s thought to how those pineapples from South America or that basmati rice from
India made it all the way to their local grocery store.
That is, until something prevents them from being able to get their favourite Vietnamese
hot sauce!
Only then do they start to wonder - how do grocery stores restock their shelves during
a pandemic with products from around the world?
Times of global upheaval, like what we’re currently experiencing as this video is being
made, put a lot of pressure on our food supply system and show us just how complex and essential
our supply chains are.
Not so long ago, most of the food people ate was grown in their own communities, even in
their own backyards.
These days, though, most of our food needs are met by grocery stores, and it’s big
business - in the UK, groceries account for nearly half of all retail sales.
A centralized food supply system does offer us some advantages over relying on what can
be grown close to home, including more variety, increased efficiency and stability, and lower
food costs.
That said, there are some drawbacks to this model, not least of which is the incredible
distance that our food has to travel to make it to our plates.
So, just how far does our food travel?
Farther than you might think.
For example, raw sugar from sugarcane grown in Maui gets shipped to California to be refined
into white sugar, which is then shipped across the country to New York, where it’s put
into individual paper packets and shipped all over the country - including back to Maui!
Most of the produce sold in US grocery stores is grown in Mexico, California and Florida.
Fruits and vegetables are picked before they ripen and transported around the country.
Fresh produce is then gassed to ripen quickly, or highly processed using preservatives for
a longer shelf life.
Apples and tomatoes travel an average of fifteen-hundred miles before they reach your grocery store;
grapes and lettuce travel more than two-thousand miles!
All of this food has to make it to stores around the world, but how exactly does that
happen?
Well, a lot depends on the type of grocery store we’re talking about.
Locally-owned independent stores may take more direct-delivery of products - local produce
and artisanal products may be delivered directly to the store by the producer.
Mid-size stores and smaller chains will have a roster of regular supplies and distributors
that they work with to keep their shelves stocked.
The largest national chain grocers may even own their entire distribution network so that
they can control every step of the supply chain.
To keep things simple, we’re going to be talking about larger national chain grocers
from here on out.
The supply chain is different for different types of food, as well.
Even large chain stores will accept some items through Direct Store Delivery, or DSD.
Things like locally-made baked goods and artisanal products will be delivered directly to the
store by the producer.
Even many dairy products are sourced from producers closer to the store - it makes more
sense to produce less stable products like milk closer to the end consumers to limit
the distance it has to travel and the amount of time it needs to be stored.
Fresh produce and meat is often purchased by distributors at regional auctions, sometimes
even before the food has been harvested, before being shipped to grocery stores or sent on
to other food producers who process and package it.
There are many, many steps along the supply chain before the food produced by suppliers
makes it onto grocery store shelves and into the carts of consumers.
To get a birds-eye view of how our supply chain works, let’s follow a freshly harvested
apple as it makes its way from the field to your plate.
After carefully tending to his trees for months, the supplier - the apple farmer - harvests
his crop of apples and offers them for sale at the regional produce auction.
At the auction his entire crop is purchased by a large grocery distributor that serves
a well-known national chain.
Even though he got a lower price per pound than he could have for smaller orders, he’s
relieved to have the entire crop off his hands and money in his pockets.
Once the apples are delivered to the distributor’s warehouse by a trucking company, they review
the apple orders from their customers - the grocery stores - and prepare the orders for
delivery.
The trucking company returns to the warehouse to pick up the apples, this time delivering
them to grocery stores throughout the region.
Once the apples arrive at your local grocery store, the stockers unload them and display
them prominently in the produce aisle.
As you pass by the attractive display during your next shopping trip, you are enticed to
throw a few of these fresh apples into your card, thus completing the apple’s journey
through the food supply chain!
Admittedly, that’s a pretty simple example of how our food supply chain works - there
are often many more steps between harvest and plate, especially for processed foods,
and some goods travel clear across the globe before they reach customers’ carts.
It’s helpful to keep in mind that grocery stores don’t actually provide a product
- their real offering is the service of being able to reliably find multiple products from
around the world in one convenient place.
Grocery stores act as the intermediary between the food suppliers in different geographical
areas and the consumers scattered all over the world who ultimately buy their products.
For most consumers, their only interaction with the food supply chain is their local
grocery store, but this is pretty well the end of the road - there are plenty of steps
in the supply chain before food reaches your store and ends up in your cart.
Grocery stores rely on a huge network of distributors to keep their shelves stocked.
The distributors act as the middle men between suppliers and stores, and function as an extended
‘back room’ for grocers around the world.
Distributors provided variety, stability, consistency and savings to stores and consumers.
Take toilet paper as an example - rather than have to predict future sales and make sure
they have enough extra stock on site to meet demand, grocery stores rely on distributors
with huge warehouses packed with a surplus of toilet paper.
When the store’s stock is running low, they place an order with their distributor and
more arrives within a few days.
This is much more efficient than stores having to wait until they need to order enough to
fill a full order directly from the supplier.
Distributors buy from suppliers for multiple stores, so they can get bulk discounts on
these much larger orders and pass savings on to stores, and ultimately, to consumers.
For example, the US grocery chain Kroger, which controls much of its own supply line,
buys cereal from producers like Kellogs to fill the warehouses that serve their three-thousand-plus
stores, which means they pay a lower price than each store could get if they ordered
only what they needed to stock their own shelves.
This complex distributor network would not work without the transportation infrastructure
in place to move products all around the country.
We rely on ships, trains and trucks, as well as the essential personnel who operate them,
to ensure food can be shipped from suppliers to distributors and on to the grocery stores.
But the real superstars of our food supply chain are the farmers and producers who make
the products that ultimately end up on our plates.
The distribution system is designed to handle a lot of pressure, but without farmers growing
fresh food and raising livestock, there’d be nothing for this network to distribute
in the first place!
The food supply system isn’t static - the system is designed to be flexible so that
it can evolve and adapt to ever-changing consumer preference, like the recent trend towards
organic and natural foods.
This built-in flexibility also provides a cushion against emergencies.
The grocery industry isn’t immune to tech disruption, either - bricks-and-mortar grocery
stores now find themselves competing against online grocers.
Many adapt by embracing these tech innovations, launching their own mobile apps and online
ordering systems.
Elsewhere in the supply chain, technology has improved the efficiency of the production
and movement of goods.
From digital SKUs, or stock-keeping units, which make it easier to track goods and orders
in real time, to fully-automated distributor warehouses, we can thank technology for the
convenience and the ever-widening variety in our grocery stores.
All of this technology also yields tons of real-time data about consumer demand and the
flow of goods, allowing for further improvements to the efficiency of our food supply chain.
Greg Ferrara is the President and CEO of the National Grocers Association in the US, which
represents more than twenty-thousand independent grocery stores.
According to him, thinking of our food supply system as a supply chain is a bit misleading;
thinking of it as a supply network is more accurate - if one link in the network is severed,
there are always multiple alternatives.
Crop failures in one region or a factory fire at one distributor won’t cause the whole
system to collapse - retailers will just swap out products or change suppliers.
This happens behind the scenes more often than you’d think, but the consumers just
don’t see it, since the shelves remain full of their favourite products.
According to Ferrara, our food supply system is strong, even during a pandemic.
He has recently said: “The shelves do have product.
They are stocked.
They are getting restocked on a regular basis.
The supply chain in this country is very efficient and it’s very effective.”
While the food supply system is strong, certain things can put added stress on the supply
chains.
Events like natural disasters send people scrambling to their local grocery store to
stock up on canned food and water, but these events are usually confined to a specific
geographical area, and the supply chain can easily adjust to accommodate the increased
demand in one area.
But what happens during a global emergency, like a pandemic, when it seems like the entire
world is rushing out to buy a lifetime supply of toilet paper and every store across the
country is out of hand sanitizer?
These kinds of large-scale emergencies are a true test of the strength and stability
of our supply systems, putting extra stress on every store and every step in the supply
chain.
During the early days of an emergency like a pandemic, the empty grocery store shelves
don’t mean there’s a shortage of food - it only means there’s a bottleneck in
the supply chain as the system adapts to the changing patterns of supply and demand.
During an emergency like a pandemic, when less people are eating out and more people
are cooking at home, excess food higher up in the supply line that was meant for restaurants
can be redirected to grocery stores to meet the higher demand.
It may take a few days for the supply chain to adapt to these changes, but as long as
farmers are still farming, truckers are still driving and packaging is still being made,
grocery stores will remain stocked with food.
Pandemics can add another layer of issues to supply chain management.
Since many viruses can live on surfaces like cardboard and plastic for up to a few days,
warehouses may have to put incoming shipments into quarantine before shipping them on to
stores.
During a true global emergency, like a pandemic, there are other ways that the supply chain
can adapt to changing circumstances and help protect our food supply.
Stores may put limits on high-demand items to prevent panic buying, and may reduce their
hours to give themselves more time to restock the shelves.
Producers can adapt by increasing production, but they have to be careful to avoid the “bullwhip”
effect - if they hire more employees or open new facilities based on an increase in demand
that turns out to be temporary, they could face financial troubles when the demand returns
to normal.
Another way producers can help out during emergencies is by shifting their focus to
higher-demand products.
For example, Canadian beer company Labatt Breweries has responded to past global crises
by using their beer production lines to produce everything from canned water to hand sanitizer!
We do suspect that demand for beer stays pretty high during times of uncertainty, too…
Consumers can do their part to ease pressure on the food supply system during an emergency
by avoiding panic buying.
As we just learned, there’s plenty of food in our supply system, so there’s no need
to clean out the shelves.
If you can afford it, make a habit of buying just a little more than you need on the regular
so that you’ll always have a bit extra for emergencies.
That way, you can leave something on the shelves for those who truly need it when disaster
hits.
Zippy Duval is the President of the Farm Bureau in the US, and he’s not worried about our
supply system, at least in the short term.
He does have some concerns about what could happen a few months from now, though.
As he has said: “Empty shelves can be frightening, but empty fields and barns would be devastating.”
The truth is, the biggest threat to our supply chains doesn’t lie with the grocery stores.
When a store experiences a rush, they can usually quickly restock with an extra big
order to their distributor, who usually has a huge warehouse packed full of goods.
But we can’t immediately grow more food or raise more livestock, so the biggest risk
lies with the farmers who grow our food and the people who transport it around the world.
Immediately following a major emergency like a pandemic, even when grocery store shelves
are empty, warehouses are full, farms and factories are still operating, and there’s
plenty of food in the supply chain to meet demand in the short-term.
But in the long term, if the workers responsible for growing and transporting our food become
ill or can’t work, or if long-distance and international travel becomes impossible, our
food supply could truly be threatened.
Maybe it’s time to start that garden after all … just in case.
If you learned something from this video, be sure and check out our other videos, like
this enlightening one called “US Healthcare System Explained”, or perhaps you’ll like
this other video instead.
We may not be able to help you get your hands on your favourite out-of-stock treat, but
we can definitely keep you entertained while you wait!
As always, thanks for watching.
Be sure to share your thoughts in the comments, and don’t forget to like, share and subscribe!
See you next time!