Food manufacturers are limiting their production to their most popular items in order to maximize volume and meet the skyrocketing demand caused by the COVID-19 pandemic.
As Canadians self-isolate, eat more meals at home and stockpile essentials, demand for some grocery items has been up by 400 per cent. Major retailers, which typically stock on a “just enough, just in time” basis, have struggled to replenish their shelves.
Manufacturers have responded by limiting their portfolios to just their most popular items, allowing for the more efficient operation of their machinery and production lines. In these unprecedented times, they are going back to basics.
During the first week of April alone, the leader of a national purchasing organization received messages from dozens of companies saying they are concentrating their efforts on commonly sold items.
“They’re just trying to meet demand and provide something to eat,” said Denis Gendron, the president of United Grocers Inc., which negotiates purchasing agreements on behalf of various retailers who together comprise one-third of the Canadian grocery industry. “They’re doing the items they can do the fastest that are selling well.”
While many businesses have been shut down to slow the spread of the novel coronavirus that causes COVID-19, food manufacturers are considered essential services and are permitted to continue to operate.
Ontario’s Italpasta typically makes 63 types of pasta, but the company is focusing on the top six cuts in its Tradizionale range of products: spaghetti, spaghettini, penne, fusilli, elbows and lasagne.
“We’re running the spaghetti 24 hours a day,” said owner and president Joseph Vitale. “People aren’t so fancy right now. They just want pasta.”
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By focusing on the core cuts and pausing production on whole-grain pastas and egg noodles, the company’s manufacturing plant can increase its output by operating more efficiently; it takes about three hours to change the mould on the pasta press, he said.
Mr. Vitale said the ramped-up, streamlined production is necessary. One night last week, about 15 trucks were lined up outside the manufacturing facility waiting for a spot at one of 20 loading doors – all of which were occupied. “We’re loading all night, and all weekend,” he said, adding that production is up roughly 30 per cent.
Nestlé Canada is also reducing the number of products it makes for the time being. “During this dynamic situation, we are carefully managing our supply chain and being agile with what is produced and shipped, which varies by product and customer,” the food and beverage giant said in an e-mail. “We believe that a simplified portfolio approach enables greater efficiencies across the entire value chain in a time of crisis.”
Manufacturers that supply grocers with household items are similarly changing tack. Kruger Products, the country’s largest producer of toilet paper, is making only its high-demand brands and formats: Cashmere and Purex bathroom tissue, SpongeTowels paper towels and Scotties facial tissue. The company said it is running all eight of its manufacturing facilities at full capacity, and has also opened up old production lines.
On the retail front, Walmart Canada has been speaking with suppliers more regularly as they cope with changes in demand during the pandemic. Cutting down on the variety of their product assortment is a common tactic right now, said Lani Lindsay, the company’s vice-president of replenishment. One pasta sauce manufacturer is now making three kinds of sauce instead of the usual eight, for example, and a toilet paper maker is producing two package sizes instead of five.
“With each supplier, we discuss the items our customers are looking for the most and prioritize [certain products],” Ms. Lindsay said in a statement. “We also look for the goods to be ordered and shipped in efficient quantities, such as pallets. The strategy also cuts down on handling time and allows product to move faster.”
A spokeswoman for Metro Inc., which is a member of the UGI purchasing group, said the company is supportive of the pared-down manufacturing approach. “It’s the right thing to do in the circumstances,” said Marie-Claude Bacon, adding that the retailer is confident customers will still see enough variety.
And the situation is only temporary. Mr. Vitale said when life goes back to normal, the company will resume making cuts such as rotini, rigatoni, scoobi do and fettuccine. “As soon as this thing is over, we’ll go back to doing it all,” he said. “This is an emergency.”
Source: Originally posted at The Globe and Mail April 5, 2020.