How’s this for an appropriate post-Halloween but still-in-the-thick-of-the-pandemic headline; “Supply Chain Nightmares are doing what Regulators and Rivals can’t: Slow Amazon down.” Apparently world-wide shortages of everything are hurting the company that sells everything.
Apple is saying it will lose $6 billion due to shortages of microchips. Auto manufactures are unable to produce enough cars, also due to the microchip shortage.
Our food supply is also taking a hit. Chipotle customers are noticing shrinking portion sizes as the company reacts to a 30% increase in its ingredient costs due to supply shortages.
At Harvest Market we have been dealing with supply chain disruptions for the last 19 months. In March and April, of 2020 the cause was simply due to panic buying at the beginning of the pandemic and during the initial phase of lock downs and restrictions. That disruption took months to recover from as producers worked to replenish supplies. We rationed products like butter, flour and toilet paper to ensure as many customers as possible would have at least some of the things they needed.
Though those times are behind us, we are now firmly entrenched in a period of long-term supply chain challenges, and it pretty much boils down to a labor problem. There simply are not enough people willing to work in agriculture, manufacturing, distribution, trucking, retail and food service as there were before the pandemic. Products can go AWOL from our shelves when any little link in the supply chain is broken.
Think of all the things that go into getting you your favorite jar of pasta sauce. First, the manufacturer has to have every single ingredient. Then a glass jar. Then a metal cap. Then a printed label. Then a cardboard box. Each of these items comes from a separate supplier. At every step along the way labor and transportation is involved. After production the cases of pasta sauce are then shipped to a distributor, slotted into a warehouse and then shipped again to the store where it is stocked on the shelf for you to buy. It is a long and sometimes brittle chain.
So, what does all of this mean right now at Harvest Market?
Some of our suppliers are routinely running at a 30-50% out-of-stock rate. On one recent grocery delivery we were shorted more than 400 items. One supplier recently had to shut down for two weeks when ¾ of their staff tested positive for COVID. One of our supplement suppliers just sent out a letter warning of two to three-week shipping delays for the rest of the year.
And most recently we were informed by Tierra Farm, our main supplier of organic dried fruits and nuts, that they would no longer be packaging their products (except for granola and coffee) for retail sale as of November 1. The main factor in their decision was their inability to attract enough workers to their rural, upstate New York packing facility. They just cannot keep up with the rising demand for their products with the labor that they have. We have stocked up as best we can on Tierra Farm products, but you will see them gradually replaced over the next few weeks by other brands or equivalent products that we bulk-pack ourselves.
Despite all of these challenges, our buying team at Harvest Market has done an outstanding job keeping our shelves vibrant and well stocked. Our team works hard to quickly offer substitute products when possible. Thank you for your continued support, patience and flexibility as we offer the best assortment of nourishing, sustainable and delicious foods that we can.
Founder and C.E.O.