National Post (Latest Edition)

Gro­cers build up stock­piles as CO VID -19 cases surge.

Gro­cers and food man­u­fac­tur­ers build up in­ven­to­ries as se­cond wave threat­ens

-

Su­per­mar­kets and food man­u­fac­tur­ers are build­ing up their in­ven­to­ries to pro­tect against surges in de­mand as a se­cond wave of COVID-19 in­fec­tions hits parts of Canada.

Gro­cers and their sup­pli­ers don’t ap­pear to be ex­pect­ing the same level of hoard­ing that they saw at the out­set of the pan­demic this spring. But as daily case counts have sharply in­creased in On­tario and Que­bec, some re­tail­ers are al­ready re­port­ing slight jumps in de­mand for what have be­come pan­demic sta­ples, such as toi­let pa­per and flour.

For ex­am­ple, Kraft Heinz Canada has stock­piled mil­lions of ex­tra boxes of Kraft Din­ner in an­tic­i­pa­tion of a se­cond wave.

Be­fore the pan­demic, the com­pany held an av­er­age of three-and-ahalf weeks’ worth of Kraft Din­ner in its ware­house as “safety stock,” so it could still fill or­ders even if de­mand un­ex­pect­edly surged.

But that sup­ply didn’t last beyond

April and the com­pany was forced to tem­po­rar­ily cut more niche ver­sions, such as KD with spi­ral pasta, so its pro­duc­tion lines could fo­cus on meet­ing the soar­ing de­mand for its big­gest sell­ers, KD Orig­i­nal and KD Ex­tra Creamy.

Through the sum­mer, the Kraft Heinz plant in Mon­treal has built up a far larger safety stock of 4.6 mil­lion boxes of Kraft Din­ner, or roughly eight weeks’ worth of av­er­age de­mand, said chief ad­min­is­tra­tive of­fi­cer Av Ma­haraj. The com­pany has also ex­panded safety stocks of other in-de­mand, shelf-sta­ble prod­ucts.

“We are ex­pect­ing an in­crease in de­mand, but we don’t an­tic­i­pate that it will be as high as the begin­ning of COVID- 19,” he said. “The big­gest is­sue is whether restau­rants will close. That will af­fect de­mand at the gro­cery stores sig­nif­i­cantly.”

Calls to tighten rules on restau­rants have been mount­ing in On­tario, which recorded a record- high 700 new COVID-19 cases on Mon­day.

But the main in­dus­try as­so­ci­a­tion for the food man­u­fac­tur­ers said a se­cond wave isn’t likely to cause ma­jor is­sues at the re­tail level, since sup­pli­ers have been adding ex­tra shifts at their fa­cil­i­ties and work­ing to build in­ven­to­ries at their ware­houses, as well as at re­tail­ers’ ware­houses.

The worst im­pact, if de­mand in­creases, might be that “they just may not have the prod­uct I want on the day I go in,” said Michael Gray­don, chief ex­ec­u­tive of Food, Health and Con­sumer Prod­ucts of Canada. “Cer­tainly, I’m less wor­ried to­day than I was in March. We kind of got caught off guard in the first wave.”

The runs on prod­ucts this spring forced man­u­fac­tur­ers and re­tail­ers to re­think sup­ply chain norms in Canada, which had fo­cused on pro­duc­ing the right amount of prod­ucts “just in time,” as a way of cut­ting down on ware­hous­ing costs, Gray­don said.

Man­u­fac­tur­ers are also quick to note that even in the most fren­zied days of the pan­demic this spring, the sup­ply chain never ac­tu­ally ran out of food, but it did strug­gle to move food from ware­houses to stores quickly enough.

“We all need to do a bet­ter job of re­as­sur­ing Cana­di­ans that we’ ll make more,” Ma­haraj said. “You don’t need to panic buy. We’ll make more.”

Em­pire Co. Ltd., Canada’s se­cond- largest gro­cery chain, which in­cludes Sobeys, Safe­way and FreshCo, on Tues­day said it has been work­ing with its sup­pli­ers to in­crease its in­ven­tory of “key items we know Cana­di­ans have been look­ing for through­out the pan­demic,” in­clud­ing toi­let pa­per and flour.

“We are start­ing to see slight in­creases in shop­ping be­hav­iour in re­gions where COVID cases are ris­ing, in­di­cat­ing that fam­i­lies are plan­ning to spend more time eat­ing at home,” spokesper­son Jacquelin Weather­bee said in an email. “Although you may see an empty shelf, from time to time, rest as­sured more prod­uct is on the way and it will only be for a very short pe­riod of time.”

Loblaw Cos. Ltd., the coun­try’s largest su­per­mar­ket chain, also stressed in a state­ment that it is “not wor­ried about run­ning out of food.”

But both Em­pire and Loblaw said they would con­sider re­in­stat­ing per- cus­tomer lim­its on in- de­mand prod­ucts in some cases.

“We’re mak­ing the prepa­ra­tions our cus­tomers would ex­pect, in­clud­ing in­creas­ing in­ven­to­ries and lim­it­ing pur­chases in some very spe­cific cases,” Loblaw spokesper­son Cather­ine Thomas said in an email.

One man­u­fac­turer of toi­let pa­per and pa­per towel said it hasn’t been able to re­store its in­ven­tory lev­els be­cause de­mand for pa­per towel has re­mained high since the spring, and de­mand for toi­let pa­per is still higher than nor­mal, though slightly down from its peak ear­lier this year.

Irving Con­sumer Prod­ucts Ltd., which makes the Royale brand of pa­per towel and toi­let pa­per, said its in­ven­to­ries have slightly re­cov­ered, but are still “far from pre- COVID-19 lev­els” de­spite its pro­duc­tion fa­cil­i­ties run­ning all lines, with added staff and over­time.

“We con­tinue to run all as­sets and op­ti­mize our runs to sup­port our ex­ist­ing cus­tomers on house­hold towel and other essen­tial tis­sue prod­ucts,” the com­pany said in a state­ment.

 ??  ??
 ??  ??

Newspapers in English

Newspapers from Canada