The pandemic’s impact on food supply chains

As an immigrant from India, I frequent grocery stores in Auckland’s Sandringham suburb to procure some of our traditional ingredients. However, for over a year now the availability of regular items in those stores has been hit-or-miss. We have gone months without our favourite mango puree or our preferred mustard oil, something hitherto unimaginable until COVID-19 struck. And it’s not just for items from the Indian subcontinent that availability has become unreliable. Things such as Canadian maple syrup have also been hard to find in supermarkets.

While the worst effects of the pandemic’s disruptions on the global food supply chain might be a thing of the past, the ripple effect is expected to continue for the foreseeable future. A recent article in the Wall Street Journal describes how shortages of ingredients and labour are affecting restaurants in the US that are now reopening for business after a long closure. The supply issues for most of these ingredients do not stem from a scarcity of the product itself but rather from the logistics network buckling under the stress of the pandemic due to ongoing issues such as port congestion.

That the COVID-19 pandemic has broken the global food supply chain is not an overstatement. At the peak of the pandemic, outbreaks among food processing plants have seen them scale or shut down operations. The US meat industry was particularly hard hit by a large number of infections and deaths amongst its workers.

Stringent border control measures added to the logistical difficulty of getting items across international jurisdictions. Mobility of people has been restricted, resulting in a severe shortage of seasonal migrant farm labourers, an issue that has hit several agricultural economies, including New Zealand, very hard. The problem has been exacerbated in the UK, where tightening immigration from Brexit has caused a shortage of truck drivers resulting in 48 tonnes of weekly food waste.

It is worth remembering that as an industry with thin margins and generally steady demand, the global food supply chain had naturally evolved to an efficient supply chain, one that keeps logistics costs low. A price of this efficiency has been a lack of resilience and responsiveness, something that became evident as the global pandemic rattled global supply chains. An example we might recall is the apparent scarcity of items such as flour in New Zealand’s supermarkets (the same phenomenon happened in many parts of the world). The underlying problem was not so much because of an increase in absolute demand for flour, but the shift in higher demand of smaller package sizes (for use in households as people stayed home) and lower demand for industrial-size packages (as restaurants and bakeries remained closed during lockdown).

So how should global food supply chains be redesigned to improve resilience and responsiveness? There are suggestions that lengths of supply chains should be reduced to minimise risks of disruptions. This would mean eating more locally grown food and reducing reliance on items imported over long distances, thereby improving environmental sustainability as well. Would such a move jeopardise New Zealand’s food exports, which often travel long distances before reaching their customers?

Some are suggesting that the reliance of seasonal migrant agricultural labour can be reduced by increased automation, for example, by increasing the use of robots in agricultural work. In the meantime, it seems like robots have started replacing humans at the other end of the food supply chain. In multiple US university campuses, on a trial basis, robots are now delivering pizza at doorsteps.

One thing is clear, the pandemic has shaken up the global food supply chain and the effects will continue to be seen over the coming years.

Subhamoy Ganguly is a senior lecturer at the University of Auckland Business School, department of Information Systems and Operations
Management.