The US food industry is emergency prepping and we need to pay attention
With a second wave of coronavirus potentially upon us, one question is gripping the preparedness community: could grocery store shelves empty out again like they did last spring?
If recent revelations from the Wall Street Journal, CNN, and others are right, there may be some cause for concern. Reports have uncovered that many of the largest grocers and food manufacturers in the country indeed think store shelves could empty again—so much so, they’re staking millions of dollars on it.
“In a first-time situation like this pandemic, there’s a lot of questions we can’t answer,” said TJ McIntyre, CEO of Bobo’s, a national snack manufacturer. “If we ran out of oats, we’d be in trouble.”
McIntyre isn’t alone. From the creation of pandemic pallets to stockpiling months of supplies, we’re going to take a look at what the largest food companies in the US are doing right now to get ready for a second wave of panic buying, and what it tells us about the likelihood that food could run out again.
Here’s What We Know
According to reports, many of America’s major grocers are spooked. Just a few examples of how this is playing out include:
Giant and Food Lion grocery chains, one of the largest in America, said they will be stocking 10 to 15 percent more inventory across the board for fears of panic shopping.
The CEO of the Hy Vee grocery chain, with 240 stores in the Midwest, is stockpiling cleaning, paper, and sanitizing items.
Southeastern grocers (parent company of BI-LO, Harveys, Winn-Dixie, and Fresco y Más), in anticipation of a possible second COVID wave, started stocking up on holiday foods months earlier than usual—especially Thanksgiving turkeys and holiday hams.
United Natural Foods, America’s largest publicly traded wholesale healthy food distributor, is back-stocking extra cold remedies and herbal teas in anticipation of an extra-large rush on those products during cold and flu season.
Food companies are also making major investments to build up extra supplies:
Campbells Soup Company is stocking up on extras of its soup brands as well as snacks like goldfish crackers and potato chips.
Associate Foods Stores, a cooperative that supplies over 500 retail supermarkets in the American West, has reported putting together “pandemic pallets”—warehouse pallets stocked with extra cleaning and sanitizing products to make sure they’re on hand if and when another panic buying episode grips the US.
Hormel Foods Corporation, owner of brands like Skippy, Dinty Moore, and Jennie-O, is stockpiling “core center store items” like bacon, pepperoni, SPAM.
World foods giant Saffron Road, known for pre-made Eastern cuisines, has increased their inventory purchases by 50%.
Could it happen again?
With much of the country feeling less worried these days about the dangers of the coronavirus, are the major players in American food being overly cautious, or is there really a risk?
Conditions Are Ripe for Further Waves
Talk in the media about the second wave of the coronavirus are everywhere—and have been for months. Every community in America remains at high risk for COVID. As attitudes and restrictions are loosening, the virus is spiking in nearly half the states in the US.
“We’re not in a good place,” said Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Disease, “There are states that are starting to show an uptick in cases…we very well might start seeing increasing deaths.”
And health officials are worried things are going to get worse.
The Institute for Health Metrics and Evaluation (IHME) at the University of Washington, an influential voice in American public health modeling, has recently laid out a scenario of 415,000 COVID deaths by January with a worse-case of 600,000.
"When we look ahead into the winter with seasonality kicking in, people becoming clearly less vigilant, you know mask use is down, mobility is up in the nation, you put all those together and we look like we're going to have a very deadly December ahead of us in terms of toll of coronavirus," said IHME director Dr. Christopher Murray.
WE'RE STILL RECOVERING FROM THE LAST PANIC BUY, AND THAT WEAKENS THE FOOD INDUSTRY
We’ve heard dire virus predictions before that never fully materialized, so the state of COVID might not be the only thing driving concern among grocers. A mix of market conditions could help enflame public panic as well.
Demand is still up. For starters, with COVID, demand for groceries is higher than its been in a long time—most Americans are eating at home more. That wouldn’t put a significant strain on grocers under normal circumstances, but if panic buying were to happen again, the strain of demand would be much harder to bear. That could put producers and retailers in an even tougher position than last spring.
Shortages are ongoing. Add to that the fact that some segments of the market are still recovering from the last panic buy. Cleaning product shortages, for example, are still ongoing. Paper towels often sell out as soon as they appear at Amazon, Costco, or local grocers. And that’s to say nothing of disinfecting wipes. Clorox, who produces 45% of the disinfectant wipes in the US, reports that their shortage will go on well into 2021.
The market is no shape for another run, and the folks at the top know it.
THE FOOD SUPPLY CHAIN IS STILL VULNERABLE—AND HAS BEEN FOR A LONG TIME
Remember back in the spring when demand for food from restaurants and schools completely dried up? Farmers had to leave crops rotting in the fields while grocery stores sold out of food.
The problem was a mismatch in supply and demand. If the farmers can’t get food to the right places, they may as well not have it.
This was a well-known weakness in the food supply chain that long pre-dates 2020, but was exposed by the coronavirus. And while the problem may have died down by now, the underlying weakness that caused it remains. It showed food industry leaders that in panic buying scenario, there is no guarantee raw foods can be processed and get to market.
Prepare for the Worse & Be Ready for Anything
We don’t know what the future holds. With increased adoption of mask wearing and social distancing, there’s every chance this winter will be far easier than some experts predict.
Then again, things could get bad. Only time will tell.
We’ve said it a thousand times, and we’ll say it a thousand more: prepare for the worst and you’ll be ready for anything.