Since the start of the COVID-19 pandemic, food manufacturers have had to contend with a range of supply chain challenges, from ingredient availability issues to labor shortages. While supply chain disruption seems to have hit an apex in late 2021, the leaders of the world’s top food and beverage manufacturing firms say that these concerns have persisted this year and will likely continue to impact the industry in 2023.
Powder & Bulk Solids gathered some key quotes from recent presentations by food industry executives to provide a view of the state of the supply chain as we prepare to enter 2023.
Continued Volatility in US Supply Chain
“We continue to manage through volatility in the supply chain, especially in the US due to labor shortages at third party [suppliers] as well as a continuing shortage of trucking capacity and containers. We are prioritizing key SKUs to protect share and continue to make progress in improving manufacturing and warehouse capacity.”
Chairman and Chief Executive Officer Dirk Van de Put
Q2 2023 Earnings Call
Nov. 1, 2022
The Disruptions are “Very, Very Real”
“I think supply chain disruption is still very, very real. Categorically well above historical levels and the cost of servicing volume in this business even as we think we are doing it competitively in our North America business is just higher and will remain higher until we see stabilization.”
Chief Financial Officer Kofi Bruce
Q1 2023 Earnings Call
Sept. 21, 2022
Some Signs of Progress
“There is clear progress happening in supply chain. It’s at Conagra. It’s across the industry, and it’s improving. Service levels have materially improved […] Core productivity is tracking as well. Clear progress. Is it flawless? No, it’s not flawless.”
President and Chief Executive Officer Sean Connolly
Q1 2023 Earnings Call
Oct. 6, 2022
Continued Normalization in 2023
“The challenges in our supply chain have taken longer to normalize, [and] we have now passed an inflection point. We have begun to recover the cost inflation that has been outpacing our pricing actions, while executing on a plan to aggressively eliminate supply chain costs, and we expect 2022 fourth [quarter] operating margin expansion and continued improvement into 2023.”
McCormick & Co.
Chairman and Chief Executive Officer Lawrence Kurzius
Q2 2022 Earnings Call
Oct. 6, 2022
Material Availability Woes to Continue
“Although I feel tremendous about the progress we’re making on supply chain, we still have a few businesses where material availability has slowed fully supply recovery. That’s primarily [in the brands] Lance, Late July, in V8, where each of them have their own kind of material availability challenge that will take us some time into ’23 to fully recover.”
Campbell Soup Co.
President and Chief Executive Officer Mark Clouse
Q4 2022 Earnings Call
Sept. 1, 2022
What to Expect in 2023
Supply chain issues will likely continue to impact food manufacturers in 2023, but executives say the overall picture is slowly improving. The US Department of Agriculture’s (USDA) Economic Research Service forecast in late October that all food prices – food-away-from-home and food-at-home – will climb by 3% to 4% in 2023, slowing from the projected increase of 9.5% to 10.5% this year. Energy costs are also anticipated to dip significantly in 2023 across the globe, which could lead to improvements in commodity prices.