The majority of garlic consumed in the US is imported from China, but the coronavirus caused orders for US grown garlic to increase 20% in March compared to last year. The increase in people cooking in their homes has caused a significant increase in demand for staple food products. This is complicated by the fact that some countries are limiting some exports because of food security concerns, which could cause supply chain problems. Because of this, experts believe that companies will continue to use US garlic rather than relying on China as their only source in the long run.
With more consumers cook at home and stock up their pantries, Olam has seen a “rather significant increase in demand,” Estep said. The largest increase comes from retailers and food manufacturers trying to keep up with demand as sales of staple food products across the grocery store skyrocket.
Estep said Olam has been able to keep up because its operations have historically maintained some buffer of material for unanticipated demand as well as sizable inventories. He said that “gives them the flexibility to mill or create products to meet urgent customer requests.”
Thoughts from Kasia Wenker, ITS Logistics Director of Distribution Sales:
The same holds true for any food, products or consumer packaged goods that are sourced almost entirely in China. You need to ask yourself, “how much of my manufacturing is done in China?”, or “if international transportation is reduced or cut off, how would that affect my business today?” Every company should be re-evaluating their current supply chain and working to mitigate any future disruptions, including broadening their sourcing geographically and increasing their inventories domestically.
These disruptions can also create unforeseen peaks and valleys in inventories. In order to keep up with increased demand, companies are offering their products via multiple channels. Some bypass distribution centers and feed directly into retailers, and some even ship straight to their consumers. Your supply chain flexibility is a key here, and a true omnichannel approach is becoming more and more important. Your traditional supply chain strategies need revamping.
If you need any help in re-evaluating your current supply chain and distribution model, please reach out today at (775) 353-5160.