MANAGEMENT
“The closing of all bars and restaurants changing the focus on which packages take priority.” And in a magnum opus, one specialty bakery referenced food distribution holding up payment: “We are a wholesale specialty bakery. Our normal business mix is 90% foodservice and 10% retail. Our foodservice orders have all basically been cancelled in the last week (some hours before pick-up) and our retail has increased but not to the point that it can cover the lost sales. I have to lay some people off. Also, now my customers (large distributors) are holding up payments.”
The “haves” Of the 19% responding in this vein, there are some that are happily going like gangbusters, and just trying to keep up with demand. Here’s what they had to say: “Meeting the demand for our products, we have experienced a 274% increase over the past two weeks.” “Since we supply products to supermarkets, we are running seven days a week.” “Producing enough food to meet customer demands.” “Keeping up with the increased demand from our retail customers.” “... we produce snack foods and volume has increased over the last few weeks to astonishing levels never seen before.”
And the specter of scarcity But overlapping strongly with those who are doing so well (again, these were verbatim responses, so people could express, one, both, or neither of these ideas) are those who worry about supply chain disruptions and problems with logistics to keep them on track. Here’s what they had to say: “As a food manufacturer, our finished goods inventories are being depleted.” “Freight carriers.” “Worrying about ports and transportation of our product and whether we will have to shut down in the near future. “Supply chain risks and meeting unexpected increases in demand.” “Packaging supply.” “Bottle and label supply.”
Halting or restricting innovation Furthermore, those who are just trying to keep up with soaring demand aren’t going to be able to be innovating at the moment; they don’t have the time to decommission a packaging line for a week to add new or better equipment. Consider these two prophetic responses: “If we are going to add automated or update equipment on a production line, the production line will have to be shut down while the new
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equipment is installed and validated. To allow for that down time required to install new equipment, we would run additional line time to build inventories. Right now, we are getting a strong demand for our products so our inventories are being depleted and we cannot build up inventories. We are just concentrating on keeping our DC’s supplied and our supply chain stocked.” Or more succinctly put: “We have stopped allowing vendors in our plants - this significantly impacts bringing on new production lines & new capacity. “We have stopped most trial work—this significantly impacts progress for new product / package innovations” Of course, the reverse should also hold to be true of those “have nots” who are seeing reduction of demand for their consumer packaged goods. After all, what do toy manufacturers do after Christmas, and candy manufacturers do after Halloween? Well-managed CPGs spell their slow times with equipment upgrades, new lines, plant improvements, and new innovations that will make them that much more efficient when the better days inevitably return. But that sentiment didn’t bubble to the surface anywhere in this 105-answer, hyper-targeted Packaging World CPG survey. Easily share this article with your peers: oemgo.to/CPGCOVID
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