Food processors cut capacity, focus on key products
Canada’s food manufacturers are cutting capacity and focusing on key products as they confront labour shortages and supply chain bottlenecks that show no signs of easing.
Shipping backlogs, delays in obtaining packaging and ingredients and high worker absenteeism due to COVID-19 isolation protocolsare interfering with the availability of certain products, experts say.
The situation has prompted some food suppliers to inform grocers about the steps they’re taking to fulfil orders, including finding new sources for materials, adding transportation capacity and even changing product formulations in some cases.
Shoppers should expect intermittent issues with product availability, said Michael Graydon, CEO of Food, Health & Consumer Products of Canada.
“There are certain commodities that will come and go and be a bit sporadic,” he said. “But the essentials in life will there.”
Many food manufacturers are coping with labour and product shortages by concentrating on key product flavours and sizes with the highest demand in order to maximize efficiencies, Graydon said.
Still, others have been forced to reduce production as absenteeism reaches up to 20 per cent in some plants, Graydon said.
“You end up having to cut significant manufacturing capacity because you don’t have the labour,” he said. “We already have high demand for products because the restaurant industry is virtually down and out and home consumption increased.”
Meanwhile, supply chain issues are also impacting the flow of goods, especially over the border.
Shipping problems are delaying the delivery of U.S.-made products to Canadian distribution centres as well as the availability of raw materials like packaging, experts say.
“There’s a massive shortage of truck drivers,” Graydon said. “Goods aren’t moving and the cost of moving those goods is going up.”