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COVID-19 Survey: How Processors are Coping with Crises

Half of respondents say their supply chains of ingredients, packaging materials, spare parts, and other plant needs have not been disrupted. Many still do not have enough PPE.

Survey says food and beverage processor still do not have enough PPE.
Survey says food and beverage processor still do not have enough PPE.

Over the past few months, ProFood World (PFW) has conducted multiple surveys to take the pulse of food and beverage manufacturers and how they are coping with the coronavirus pandemic. In the early days of the outbreak, many companies were optimistic about meeting production goals, according to PFW’s reader survey in late March. While those responding to the next survey conducted approximately one month later are not all disillusioned, some of the prior enthusiasm seems to have diminished.

Half of respondents say their supply chains of ingredients, packaging materials, spare parts, and other plant needs have not been disrupted. This statistic remains the same from both past and current PFW pandemic surveys. One respondent tells PFW that ingredients and materials supply availability have impacted his company’s production schedules. “We have been able to adjust our manufacturing schedule to meet short-term demand and are working on long-term options and solutions,” he explains. Of those who experienced supply chain disruptions, 40% say the suppliers are in North America, 17% are international suppliers, and 43% are experiencing disruptions from both areas.Unknown 1

The not-so-good news is that shortages of personal protective equipment (PPE) persist months after the virus hit the U.S. About 70% of respondents report their facilities are spending less than $1,000 per month on masks, 25% spend between $1,000 and $5,000 per month, and 5% spend more than $5,000 per month on masks. More than half say that their current mask supply must be disposed of on a daily basis. “PPE is difficult to impossible to get on a predictable basis,” according to a survey respondent.

The line flexibility to keep up with production demands as well as virus unknowns regarding the workforce are challenges for many facilities. “We continue to incorporate automation to offset labor cost and labor losses,” states a respondent. “Thus far, we are keeping pace with the demand for products.”

In contrast, another respondent says, “We will keep falling further behind unless we can make some emergency investments to make our lines and operations much more flexible.”

One respondent tells PFW a new product mix based on current consumer buying habits cannot be supported by his company’s supply chain. “[We have] shortages for some items, with other manufacturing lines 100% idled. [There is] no way to re-balance without multi-$100MM capital,” but if the investment is not needed long term, then nothing can be done to fix the issues, he states.

Production efficiency will also depend on how the outbreak is controlled, according to other verbatim responses such as:

·      “The biggest risk is that we might have a local outbreak that has impacted many meat processors.”

·       “The impact will depend more on if the number of positive cases would continue versus government restrictions. We’re navigating through the restrictions, however, the unpredictability of the number of positive cases is a bigger challenge to maintain consistent manufacturing.”

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