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Frozen-food industry increased supply lines in pandemic: Trade group chief (with video)

The nation’s frozen-food industry has broadened its supply lines as a result of the pandemic and boosted the number of its suppliers, according to the head of the sector’s key trade group.

Alison Bodor, president of the American Frozen Foods Institute, told the FreightWaves North American Supply Chain Summit in a solo chat that the need for a more diverse supply chain was a “lesson learned” for the industry.

“When the pandemic first started, it was typical for companies to have one or two suppliers of certain ingredients,” Bodor said. “What we’ve seen now is suppliers have three or four to reduce their dependence on any one supplier.”

The push to increase diversity in the supply chain also has included trying to broaden the geographical location of a company’s suppliers of ingredients. 

But that’s not the only change, Bodor said. The “end market” for the frozen-food industry also has become more important, she added, driven in part by the collapse of the base of customers that she referred to as “food service,” including restaurants.

At the start of the pandemic, according to Bodor, the frozen-food industry’s two key markets went in different directions. Demand for frozen foods at supermarkets soared; demand for it in restaurants and other parts of the food service customer base collapsed. 

Bodor said frozen food suppliers tried to adjust, but it wasn’t that easy. In particular, just taking products that had been ticketed for the food service industry and putting them into a retail supply chain was complicated.

Even after government agencies provided “dispensation” to sell restaurant frozen foods into retail, the package size was still an impediment, Bodor said. 

The “cost/benefit just wasn’t there to shift into retail,” she said. “It’s too difficult to do that.”

Not all frozen foods stay good forever, and Bodor said there were additional supply chain challenges with perishable foods. Such foods have a short shelf life, she said, so an attempt was made to capture those foods that were headed into the food service sector “and move them into a stream of commerce that could receive them.”

“And that proved to be quite a challenge, more than we would have thought,” Bodor said. 

Part of the problem, she said, is that the industry has such a tight supply chain now that it didn’t take well to being shifted in a massive fashion.

The relationship between the frozen-food processors and farmers who supply goods is a “sophisticated” one, she said. “So there’s not a great extra capacity to handle unexpected supply that was available when the food service market crashed.”

The efficiencies in the supply chain “didn’t necessarily transfer to this unexpected situation where retail doubled or tripled and food service fell,” Bodor said. “So there’s work to be done to build flexibility into the supply chain.”

Food processing companies were some of the first private sector firms that had to deal with a COVID-19 outbreaking among its workers,, with meatpacking companies in particular the site of early outbreaks of COVID-19 among employers.

While meatpacking companies would not be the types of firms in the Frozen Food Institute, Bodor said “worker safety remains paramount.”

“The frozen-food industry continues to take great measures and put significant resources in worker safety, in how we protect our workers as they come into the facility, when they are there and when they go home, as best we can,” she said. 

Providing workers with personal protective equipment is important, but communication with employees is “paramount,” she said. Those workers need “trust in their employer, and the message about what the employer is undertaking to protect them.,” Bodor said.

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John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.