With holidays around the corner and COVID-19 cases on the rise, many supermarkets and food distribution companies are anticipating another surge in demand.
When the news of COVID-19 reached the U.S. early March, there was frenzy and fear that led people to overfill their homes with food and other essentials. Supermarkets found themselves with empty shelves and no timeframe for new shipments. Major food companies were unable to fulfill orders because they lacked the necessary supplies. This led to a disruption of the supply chain and a subsequent halt in food distribution.
In anticipation of another hoarding crisis, companies such as General Mills Inc. and Campbell Soup Co. have implemented changes to avoid delays in production. In early June, companies began cashing in their profits to stockpile raw ingredients, such as oats and sugar.
In the past, these food companies maintained inventories that held the bare minimum. Their new stockpiling strategy allows companies to now hold most of their money in raw materials, which enables them to produce their goods up to 90 days prior without any new shipments. However, these companies were not designed to sustain or store the amount of ingredients that they now accumulate during the pandemic.
This shift in strategy has also changed what companies produce, increasing the focus on items that are popular and in high demand rather than on developing new food products.
Companies have been planning for months for another surge in demand. However, current data shows that the increase in demand for food and other essentials has already started.
Research reveals the hoarding mentality directly corresponds to the rise and fall of COVID-19 cases. During the slower months of summer when the cases were at an all-time low, hoarding and anxious buying ceased to be a problem. However, as cases started to climb in the fall, the panic began to set in again. On Nov. 9, the U.S. reached 10 million confirmed cases with an estimate of 100,000 new cases daily.
This rise in cases has created a surge in demand. Centricity conducted a study indicating that the demand for baking ingredients has tripled in just the first three weeks of October as compared from the previous year. Despite consumers’ common behaviors, food distribution companies and supermarkets advise against stockpiling food and other essentials and instead encourage people to purchase items as they would in a normal situation.
“No, I mean, the key is for people not to hoard. And, you know, what we ask our customers is, buy what you need, but no need to go and hoard because cows are still producing milk and the farmers are still growing products and it’s still flowing across the country,” Rodney McMullen, CEO of the supermarket chain Kroger, said in an interview with Marketplace.
Food distribution companies are not the only ones preparing for a second wave of stockpiling. Grocery stores have also made changes to their system to avoid shortages. Some stores have even gone so far as to order their Thanksgiving turkeys over the summer, months before orders are typically made.
Anxious buying and food hoarding has not only affected the supply chain but also the amount of food waste produced in America.
Prior to the pandemic, American consumers wasted about 40% of food purchased annually, equating to 63 million tons. That number is predicted to be much larger this year with the added waste from hoarding.
However, anxious consumers are only one cause of the abundant food waste. Farmers are finding themselves unable to harvest their produce due to the lack of seasonal migrant workers. 200,000 migrant workers have been unable to enter the country due to the COVID-19 pandemic. In the past, farmers have disposed up to half of their crops because they did not live up to cosmetic standards. Without their usual workers, farmers are unable to fully harvest their fields of crops and will have to dispose of many fruits and vegetables, adding to the growing rate of food waste.
“In economics, hoarding is often explored in the context of savings. When consumer confidence is down, spending drops and households increase their savings if they can, because they expect bad times ahead,” behavioral economics professor Michelle Baddeley said in an interview with Science Daily.
Supermarkets and food distribution companies are anticipating the peak of demand to occur 10 to 14 days before Thanksgiving. Until then, businesses are doing all they can to maintain a steady supply.
Amy Duong is a City News Intern for the 2020 fall quarter. She can be reached at email@example.com.