Will supply chains become part of the permacrisis?

One of the most positive facts that emerged from the pandemic was the robustness of food supply chains. Despite the huge issues that sweep the world, bar a few items, food kept appearing on the shelves of our supermarkets and small stores.

But the same isn’t true now. Report after report points to supply issues and gaps in supermarket shelves have nearly become the new normal. We have four main factors to ‘thank’ for this situation. Brexit continues to deliver what many had anticipated: massive trade disruptions.  In addition, we have the ongoing bitter war in Ukraine that shows no signs of ending.

As I reported previously in New Food, we have the resulting cost of living crisis driven by these two factors which in turn are causing massive damage to the agricultural base in the UK, which is not being treated well in terms of fair pricing by the retail sector. It could be argued that all of these issues may be resolved at some point in the future. The same does not apply to factor four ….. our climate crisis.

It’s because of this that I believe supply chains, especially those involving imported goods, will become part of the permacrisis, which was named the Oxford Dictionary’s word of the year very recently, ie supply chains will lurch from one unprecedented event to another.

I have delivered this uncomfortable message over recent months to a variety of audiences. I’ve further broken the supply chain issues into two distinct categories; Single Points of Failure (SPOFs) and Cascading Failures (CAFs). A few examples of SPOFs that have manifested themselves over recent times include; carbon dioxide, food packaging materials, aluminium for cans and vitamins. Perhaps not the list of issues that many expected to read about.

CAFs are also starting to emerge and one of the best example I gave is vegetable oils. The shortage of sunflower oil due to the invasion of Ukraine meant other vegetable oils had to be used, such as rapeseed oil. But of course, that put huge strains of this supply chain and palm oil was then thought to be the replacement for this. However, some of the major countries exporting this commodity cut back to ensure there were sufficient supplies for the indigenous population and thus the cascade of supply failures became clear to see.

This has impacted the industry in a number of ways; companies have been frantically reformulating recipes on a regular basis, but much more sinister than this are the massive issues of adulteration in vegetable oils in different parts of the world that I am continuing to pick up. Shortages are a clear driver for fraud and some will see an opportunity to exploit the supply chain failures that are becoming more and more widespread.

So what to do about the potential permacrisis in food supply chains? A new terminology will become part of the everyday language of managing supply chains: food system resilience. Building resilience will help to develop strengths against a wide range of shocks such as climate change, urbanisation, natural disasters, disease outbreaks, and financial and political crises.

I have become involved in this activity for some time at both a company and country level. The starting point is to identify supply chain SPOFs and CAFs and then start to develop mitigation plans. Some of these are relatively straightforward, whereas others are highly complex and will need multiple actors to become involved. Supply chain transparency will become even more important, as will understanding both financial and environmental sustainability across supply chains. For the past number of years there have been discussions and some actions around transforming the global food supply system.

This is something I fully endorse but do think that too much of the efforts to date have focused on single agenda items and not really on the full and complex picture of what will be needed to ensure food security for all going forward. Perhaps the permacrisis will be what helps drive a more joined up effort?