As a result, meat prices are swinging dramatically and will likely similarly impact other parts of the food system, he said.
“The big problem in my mind is the question of how long the current situation lasts,” he noted. “The food industry faces significant risk in retooling, or even in not retooling. These efforts are costly, and if the economy and the restaurants are going to reopen soon, it may not be worth it in the long run.”
“Often when we see markets in turmoil, it is due to a fundamental lack of information about the future. Without being able to resolve questions about how long the current situation lasts, it is hard to know how to invest in a response,” he added.
While Just anticipates meat shortages, he expects them to last only a few weeks.
“There could be other foods in similar circumstances. But the supply and manufacturing timelines are different for different foods, and thus the shortages are going to be intermittent and probably isolated to a group of products at any one time,” he said.
Doug Baker, VP, industry relations at FMI – The Food Industry Association, said that rather than shortages, consumers may be experiencing sporadic unavailability of certain high-demand items.
“We can all rest assured that there is enough retail supply of food products and, according to the U.S. Department of Agriculture, there are no nationwide shortages of meat in this country,” he said, citing IRI statistics reporting that meat sales are up 17% at stores.
“We know shoppers are getting what they want — and at a scale our food system has historically never witnessed,” Baker said.
As consumer goods companies grapple with these production challenges, most of whom CGT spoke with expected automation to play a larger role moving forward.
While many plants are currently leveraging such low-tech options as floor decals, protective barriers and staggered scheduling, they’re also exploring more advanced improvements like thermal cameras and vision technology.
“Long term, there will almost certainly be efforts to increase automation and reduce reliance on labor,” said Purdue University’s Lusk. “Unlike manufacturing a car or a refrigerator, animals come in different shapes, sizes and colors, which makes automation more difficult, but not impossible.”
“Our businesses have changed more in the last five weeks than the last five years,” said Baker. “[The] supply chain innovations planned for several years out will be fast-paced now and will catapult us into the near term.”
He cited omnichannel solutions as an example of a resolution that’s become more tangible than just six months ago. “The idea that stores could be built for pick-up only is a very real format this year. Automated warehouses, like what we’ve witnessed with Ocado in the U.K., could be a new normal in our industry.”
As for expectations on how long this manufacturing disruption will occur, Just predicted the disruption would be dramatic — but not ubiquitous. “In other words, some of the big food suppliers are going to retool for a COVID world, and some will make only minor investments and changes,” he said. “As the future comes into view, there will be winners and losers — and those who chose poorly will likely face significant periods of shutdown or holdups in their supply chain.”