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We were told that the "Surge" would happen in late April, but it never did. Now it appears that it is, or nearly is here. The article suggests that producers are moving as fast as they can to restock suppliers/grocers.
www.wsj.com
By Annie Gasparro and Jaewon Kang | Photographs by Katie Currid for The Wall Street Journal
July 12, 2020 5:30 am ET
Manufacturers including General Mills Inc., Campbell Soup Co. and Conagra Brands Inc. say they are pumping out food as fast as they can, but can’t replenish inventories. Popular items such as flour, canned soup, pasta and rice remain in short supply.
As of July 5, 10% of packaged foods, beverages and household goods were out of stock, up from 5% to 7% before the pandemic, according to market-research firm IRI.
“We are running flat out,” said Conagra’s Chief Executive Sean Connolly. He said Conagra won’t be able to build up inventory of certain brands, such as Chef Boyardee and Healthy Choice, unless demand slows or it further increases manufacturing capacity.
SHARE YOUR THOUGHTS
Have you noticed any shortages at the grocery store? Join the conversation below.
Food makers and grocers expect prolonged shelter-in-place orders and restrictions on restaurants, as well as the battered economy, to result in a longer stretch of eating at home. Added safety measures at plants are slowing operations, too. There is enough food in the U.S. to keep people fed, executives say, but every product might not be available everywhere while inventories are strained.
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Many retailers in states where cases are surging, including Texas-based H-E-B LP, are reinstating rationing on high-demand items including paper products. They say their distributors are still capping the amount of fast-selling products that can be ordered at one time.
In mid-March, flour sales soared 233% from a year earlier, according to market-research firm Nielsen and remained 25% higher in June than the prior year.
Mark Griffin, president of Nebraska-based B&R Stores Inc., said the chain would be in worse shape if cases rise again in the Midwest because it lacks the inventory it had in March. B&R has been stockpiling bottled water and other products at its warehouses, he said. The grocer has also tried to secure new suppliers for canned products, baking items and ramen noodles. So far, that has only yielded a truckload here and there, Mr. Griffin said.
Soup is particularly hard to source, he said: “There’s no plethora of manufacturers available.”
Campbell’s CEO Mark Clouse said the company ran through reserves of its namesake soup and snacks such as Pepperidge Farm Goldfish crackers during the initial rush of orders in the spring. That demand was a shock to a supply chain that had been largely recalibrated to handle flat or falling demand over the past decade, he said: “We’re racing to try to rebuild some inventory.”
General Mills, which owns Gold Medal flour and Betty Crocker dessert mixes, said it hasn’t built up normal levels of inventory of baking ingredients or its Progresso soup.
McCormick & Co. is also struggling to rebuild inventory of its spices and other items. It is adding the equivalent of another U.S. factory by using more third-party manufacturers and increasing production at its own plants.
Koninklijke Ahold Delhaize NV, owner of the Giant and Food Lion supermarket chains, said it is trying to build up inventory by finding new suppliers and adding shifts at distribution centers. The company found a new toilet paper supplier that primarily sold to college bookstores before the pandemic, said Andre Shaw, a senior vice president of supply chain at Ahold’s services business. Ahold Delhaize also found new pasta suppliers in Italy.
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Will the coronavirus pandemic lead to long-term changes in how we shop for food? To better understand the challenges facing grocery stores, WSJ’s Alexander Hotz spoke with an industry insider, a store owner and a Walmart executive.
Wisconsin-based grocer Festival Foods is receiving about 80% of the goods it orders and is removing some products from shelves to make room for roughly double the toilet paper it normally stocks, said Chief Executive Mark Skogen.
Availability for some products has improved, Mr. Skogen said, including meat, which ran short this spring when some meatpacking plants temporarily closed after they became hot spots for coronavirus transmission.
Flour has remained particularly hard to come by, as a surge in home baking caught the sleepy industry off guard. Sales of baking ingredients had been sluggish for years, making it difficult to ramp up to meet the sudden demand.
In mid-March, U.S. flour sales soared 233% from a year earlier, according to market-research firm Nielsen and remained 25% higher in June than the prior year.
“The orders are still there even though we are producing double to triple the normal volume,” said Bill Tine, head of marketing at King Arthur Flour Co.
Mills that never caught up with that demand are now trying to build surpluses to prepare for the holiday baking season and the potential for higher orders if the rise in Covid-19 cases causes more areas to slow reopening plans and weigh a return to shelter-in-place status.
A Farmer Direct Foods mill on July 8 in New Cambria, Kan. The company has increased its production after demand climbed during the coronavirus pandemic.
King Arthur has added a fulfillment center in Kansas and booked more time on manufacturing lines at the mills that make its flour.
“There is enough wheat. There are a lot of mills. The packaging lines at the mills are the limiting factor,” Mr. Tine said.
Home bakers such as Beth Boyington, an athletic trainer near Boston, have had difficulty securing flour. Ms. Boyington splurged on a 25-pound bag of her favorite King Arthur flour when she finally found it.
“Stores seem to continue to be low on specific brands and types of flour, which is annoying,” she said. “Baking is my stress relief.”
Farmer Direct Foods Inc., a Kansas mill and supplier for King Arthur, is filling about 35 trucks a month with flour, up from 18 typically.
The mill has run out of packaging at times, said CEO Bob Morando, and equipment has broken down because he added a shift and hasn’t had time to do preventive maintenance.
“We’re going to run like crazy from now to Christmas,” he said.
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From Flour to Canned Soup, Coronavirus Surge Pressures Food Supplies
Grocers are having trouble staying stocked with goods from flour to soups as climbing coronavirus case numbers and continued lockdowns pressure production and bolster customer demand.
www.wsj.com
By Annie Gasparro and Jaewon Kang | Photographs by Katie Currid for The Wall Street Journal
July 12, 2020 5:30 am ET
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Manufacturers including General Mills Inc., Campbell Soup Co. and Conagra Brands Inc. say they are pumping out food as fast as they can, but can’t replenish inventories. Popular items such as flour, canned soup, pasta and rice remain in short supply.
As of July 5, 10% of packaged foods, beverages and household goods were out of stock, up from 5% to 7% before the pandemic, according to market-research firm IRI.
“We are running flat out,” said Conagra’s Chief Executive Sean Connolly. He said Conagra won’t be able to build up inventory of certain brands, such as Chef Boyardee and Healthy Choice, unless demand slows or it further increases manufacturing capacity.
SHARE YOUR THOUGHTS
Have you noticed any shortages at the grocery store? Join the conversation below.
Food makers and grocers expect prolonged shelter-in-place orders and restrictions on restaurants, as well as the battered economy, to result in a longer stretch of eating at home. Added safety measures at plants are slowing operations, too. There is enough food in the U.S. to keep people fed, executives say, but every product might not be available everywhere while inventories are strained.
WSJ NEWSLETTER
What's News
A digest of the day's most important news to watch, delivered to your inbox.
I would also like to receive updates and special offers from Dow Jones and affiliates. I can unsubscribe at any time.I agree to the Privacy Policy and Cookie Notice.
SIGN UP
Many retailers in states where cases are surging, including Texas-based H-E-B LP, are reinstating rationing on high-demand items including paper products. They say their distributors are still capping the amount of fast-selling products that can be ordered at one time.
In mid-March, flour sales soared 233% from a year earlier, according to market-research firm Nielsen and remained 25% higher in June than the prior year.
Mark Griffin, president of Nebraska-based B&R Stores Inc., said the chain would be in worse shape if cases rise again in the Midwest because it lacks the inventory it had in March. B&R has been stockpiling bottled water and other products at its warehouses, he said. The grocer has also tried to secure new suppliers for canned products, baking items and ramen noodles. So far, that has only yielded a truckload here and there, Mr. Griffin said.
Soup is particularly hard to source, he said: “There’s no plethora of manufacturers available.”
Campbell’s CEO Mark Clouse said the company ran through reserves of its namesake soup and snacks such as Pepperidge Farm Goldfish crackers during the initial rush of orders in the spring. That demand was a shock to a supply chain that had been largely recalibrated to handle flat or falling demand over the past decade, he said: “We’re racing to try to rebuild some inventory.”
General Mills, which owns Gold Medal flour and Betty Crocker dessert mixes, said it hasn’t built up normal levels of inventory of baking ingredients or its Progresso soup.
McCormick & Co. is also struggling to rebuild inventory of its spices and other items. It is adding the equivalent of another U.S. factory by using more third-party manufacturers and increasing production at its own plants.
Koninklijke Ahold Delhaize NV, owner of the Giant and Food Lion supermarket chains, said it is trying to build up inventory by finding new suppliers and adding shifts at distribution centers. The company found a new toilet paper supplier that primarily sold to college bookstores before the pandemic, said Andre Shaw, a senior vice president of supply chain at Ahold’s services business. Ahold Delhaize also found new pasta suppliers in Italy.
The Coronavirus May Forever Change Grocery Shopping
YOU MAY ALSO LIKE
UP NEXT
0:00 / 7:36
The Coronavirus May Forever Change Grocery Shopping
Will the coronavirus pandemic lead to long-term changes in how we shop for food? To better understand the challenges facing grocery stores, WSJ’s Alexander Hotz spoke with an industry insider, a store owner and a Walmart executive.
Wisconsin-based grocer Festival Foods is receiving about 80% of the goods it orders and is removing some products from shelves to make room for roughly double the toilet paper it normally stocks, said Chief Executive Mark Skogen.
Availability for some products has improved, Mr. Skogen said, including meat, which ran short this spring when some meatpacking plants temporarily closed after they became hot spots for coronavirus transmission.
Flour has remained particularly hard to come by, as a surge in home baking caught the sleepy industry off guard. Sales of baking ingredients had been sluggish for years, making it difficult to ramp up to meet the sudden demand.
In mid-March, U.S. flour sales soared 233% from a year earlier, according to market-research firm Nielsen and remained 25% higher in June than the prior year.
“The orders are still there even though we are producing double to triple the normal volume,” said Bill Tine, head of marketing at King Arthur Flour Co.
Mills that never caught up with that demand are now trying to build surpluses to prepare for the holiday baking season and the potential for higher orders if the rise in Covid-19 cases causes more areas to slow reopening plans and weigh a return to shelter-in-place status.
A Farmer Direct Foods mill on July 8 in New Cambria, Kan. The company has increased its production after demand climbed during the coronavirus pandemic.
King Arthur has added a fulfillment center in Kansas and booked more time on manufacturing lines at the mills that make its flour.
“There is enough wheat. There are a lot of mills. The packaging lines at the mills are the limiting factor,” Mr. Tine said.
Home bakers such as Beth Boyington, an athletic trainer near Boston, have had difficulty securing flour. Ms. Boyington splurged on a 25-pound bag of her favorite King Arthur flour when she finally found it.
“Stores seem to continue to be low on specific brands and types of flour, which is annoying,” she said. “Baking is my stress relief.”
Farmer Direct Foods Inc., a Kansas mill and supplier for King Arthur, is filling about 35 trucks a month with flour, up from 18 typically.
The mill has run out of packaging at times, said CEO Bob Morando, and equipment has broken down because he added a shift and hasn’t had time to do preventive maintenance.
“We’re going to run like crazy from now to Christmas,” he said.
RELATED READING
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