Spice Boom Shocks Food and Beverage Industry: How Demand Planning Can Help Mitigate these Disruptions
The global coronavirus pandemic has dramatically affected the food and beverage industry: ingredients ping pong between surplus and scarcity. Disrupted and broken supply chains have resulted in dumping milk and rotting produce and shortages of meat, flour, and yeast. Yet spices have seen a spike since the start of the pandemic, with plastic and glass container manufacturers struggling to keep up.
Why have spices seen such a spike while other ingredients in the food and beverage industry have not? To start, stay-at-home orders placed earlier this year meant more meals were prepared at home, leading to updating and adding to consumers’ existing herb and spice pantries. Also, younger or first-time cooks are taking the plunge and using more seasonings beyond salt and pepper. Americans have always embraced international restaurants, which have made us long for certain flavors during food service shutdowns. With the ease of multicookers, such as the Instant Pot, many international cuisines are within reach.
Consumers’ willingness to pay a premium for new flavors and global tastes has fueled this growth for some time, and the pandemic has accelerated this. With more consumers staying home, more meals such as breakfast and lunch, which are historically eaten away from home, are being made at home. Instead of a grab-and-go style meal of the pre-pandemic era, households have more time, and meals have become more involved.
Sales of McCormick branded spices were up 35 percent over last year. Furthermore, McCormick reportedly predicts an even busier holiday season than usual, with products like cinnamon, garlic, pumpkin spice, and vanilla seeing a particular uptick in demand.
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On the other hand, a bigger issue is packaging material. Shakers, tubes, bags, and glass containers are experiencing longer than usual lead times, with packaging facilities following precautions in hopes to stave off any outbreaks. While the spices themselves have been relatively easy to source, the containers they are sold in have been in short supply.
The need to balance supply with increasingly varied demand is more critical than ever before. With the right cloud-based demand planning software, organizations can gain a consolidated view of demand and supply across facilities, product families, and lines of business that position your business for recovery and success in the aftermath of the coronavirus pandemic. Food and beverage organizations, manufacturers, and distributors must optimize inventory levels to have the right product variety and amount in the right place at just the right time. Vanguard Predictive Planning enables organizations to improve forecast accuracy; enhance intra-company and partner collaboration; reduce stock-outs; and increase service levels, revenues, and consumer satisfaction.
Vanguard Predictive Planning™ for food and beverage supply chains is a cloud-based planning and forecasting platform designed to help food and beverage manufacturers and distributors collaborate with every aspect of their supply chains, including suppliers and buyers, to ensure best-possible product availability, safety, and fulfillment at the highest possible profit. Vanguard Predictive Planning includes applications such as demand and supply planning, inventory optimization, product portfolio optimization, new product planning, sales and operations planning, and integrated business planning. All of these applications leverage Vanguard’s in-memory database that is pre-built with industry-leading forecasting algorithms and features to automate your supply chain processes while improving accuracy and efficiency for maximum returns.
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