CBA: ‘We’re still in a crisis situation and … the supply chain is more strained at this point than any point previously’

By Elizabeth Crawford contact

- Last updated on GMT

Source: Getty/Thomas Barwick
Source: Getty/Thomas Barwick

Related tags: Consumer Brands Association, labor shortage

An end to pandemic-related government subsidies last month did not, as hoped, end the labor shortage currently hamstringing manufacturers’ ability to meet the sustained higher demand for food consumed at home – forcing industry to seek other solutions.

“Even though we’re not behaving the same way we did last March or last April, we’re still in a crisis situation and what I am hearing from leaders in our industry is that the supply chain is more strained at this point than any point previously,”​ Geoff Freeman, president of the Consumer Brands Association said this week at the Consumer Federation of America’s 44th​ Annual National Food Policy Conference.

Limited access to key ingredients and materials, inflation and transportation bottlenecks all are contributing to the strain, and all of these factors boil down to “the availability of humans who want to do these jobs … and there aren’t enough of those humans right now,”​ Freeman explained.

“There was a sense among many that as soon as the supplemental benefits went away in September that we would see a change in the workforce. A month later and we haven’t see the change. The expected demand to work is not there in the numbers that we need,”​ he said, adding: “The golden question right now, then, is – are these short-term labor solutions? And I don’t know that they are.”

In the immediate future, the struggle to keep people on manufacturing lines, behind the wheels of trucks, at ports to maintain the flow of goods, and in other key positions is a threat to the holiday season.

“I am quite worried, based on the feedback that I’m getting, about the ability to keep pace … to meet consumer demand in the environment that we’re in today,” ​Freeman said.

As industry considers ways to entice workers back, Freeman says CBA is pursuing regulatory options to “let some of the steam out of what is an overheating engine.”

For example, he said, the trade group is working closely with The White House to create a centralized Office of Supply Chain that can function as a control tower for the overall industry.

“When it comes to supply chain, one of our weaknesses as a country is that we really don’t have a centralized point of view as to where the roadblocks are. Where are the problems? There’s no command or control system. It’s just a system that has always worked. But now we’re in a crisis moment, and as I read in an article last week, it’s almost a set of beautiful violins with no conductor,”​ he said.

A centralized office could act as that conductor and help set a steady tempo so that bottlenecks are less likely.

‘Now is not the time to implement changes that are going to put further strain on the supply chain’

Freeman also is calling on the government to pause implementation of regulations that are not time sensitive so that industry can focus on keeping supply chains running as smoothly as possible.

“Regulations that were in the process of being implemented were paused during the early days of COVID because we needed all hands-on deck. Quite frankly: We should continue that pause right now,”​ he said.

For example, he suggested that the bio-engineering labeling regulations be paused because many companies are struggling to have new labels produced and it is distracting them from meeting other basic requirements.

“Now is not the time to implement changes that are going to put further strain on the supply chain,”​ he said.

Power lies with employees

The labor shortage also is putting more power in the hands of the workforce to demand change and assert themselves in ways that employers cannot ignore.

One way this is playing out is through strikes as unions play hardball for better benefits and worker equity. Bakers and cereal makers at Kellogg’s went on strike earlier this week, while earlier this fall those at Mondelez went on strike, which was successfully resolved.

Another way it is playing out is by companies taking bolder stances on social issues and embracing community partnerships at the behest of their employees.

Ultimately, Freeman said, industry is pursing many options to alleviate labor constraints, but there is no one silver bullet and change will take time.

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