Dairy Processing - April 2021 - 58

SUPPLY CHAIN

Changing

Course

The COVID-19 pandemic pushed the industry to
its limits, but may have changed it for the better.

L

argely driven by the decrease in food service demand
and restaurant sales, COVID-19 has dramatically
affected consumer habits and dairy supply chains,
leaving the dairy industry to cope with some new realities.
As the economy continues to reopen, potential changes in
consumer habits, the level of social distancing that remains
will reshape dairy supply chains long term.
" Our supply chain's been tested over the last 12-plus
months, " said Mark Baum, senior vice president of Industry
Relations and chief collaboration officer, FMI - The Food
Industry Association, Arlington, Va. " Food retailers and
their suppliers have been dealing with natural disasters for
decades ... so we're pretty good at pivoting and being able
to expand the supply chain, reduce assortment, rationalize
use, if needed to meet demand for those items that
consumers want the most and expand capacity for those.
But we've never experienced anything on the scale when
you're talking about literally a global pandemic. "
A 2020 report from CoBank's Knowledge Exchange
indicated that consumer behavior would be different well

58 APR 2021 | DAIRYPROCESSING.COM

into 2021, compared to pre-pandemic, and that would force
dairy supply chains to adjust from farm-to-fork.
As stay-at-home orders were put in place, consumers
increased purchases of more traditional dairy products,
such as fluid milk, cheese and butter. They also stopped
going out to eat, especially once indoor dining was
shuttered across the United States. Retail was facing
shortages in store while there was a surplus inventory
in foodservice.
" I remember April of last year going to the grocery store
and for the first time in my life seeing butter sold out, " said
Christina Adams, partner, McKinsey & Company, during her
presentation, " Embracing the Future of Dairy " at the 2021
IDFA Forum. " It was hard for me to imagine, but that's part
of the world, particularly as we were living it last year, but
it's impacted so much of how things have changed, as well. "

REALLOCATING RESOURCES
At the onset of the pandemic, there was a spike in demand
and a decrease in supply for food products. Retail stores

©SemA - stock.adobe.com

by Kristen Putch | kputch@sosland.com



http://www.DAIRYPROCESSING.COM

Dairy Processing - April 2021

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