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Grocery stores nationwide and locally are navigating unchartered territory as supply chain disruptions persist, shorting new items by the day in some cases.
“Not to this extent have we ever experienced the out-of-stock situation like we are right now,” said Margaret Mittelstadt, director of community relations at Outpost Natural Foods Cooperative, which has four store locations in greater Milwaukee.
The grocery supply chain had barely stabilized from the COVID-19 pandemic’s panic buying stage when it was hit early this year with another blow: labor shortages. That’s what continues to stand in the way of Outpost’s wholesalers getting product into their own warehouses as well as delivering that product to stores, said Mittelstadt.
On top of labor challenges down the line – from manufacturing to transportation– raw materials like glass, aluminum and steel are scarce across the globe, slowing the production of food packaging.
Janesville-based Woodman’s Markets, with 19 stores in Wisconsin and Illinois, is experiencing lags in packaged goods across numerous categories.
“Anything that comes overseas from China,” said company president Clinton Woodman. “The shipping delays and the back up at the ports has caused a lot of it. (Shortages are) across the board because a lot of packaging comes from China.”
Grocers are in a crunch just ahead of the holiday season, which is traditionally the busiest time of year and could be even busier this year as families gather again in large groups.
“What we may be seeing are popular items like canned goods, like canned pumpkin, or vanilla or flour – things that people buy more than usual during the holiday season – may be affected,” said Mittelstadt.
To help fill in the holes, Outpost is bringing on new vendors – some for just a month at a time – and purchasing alternate products or brands for items in short supply. It also requires more engagement with shoppers, whether it’s helping them find an in-store substitute for canned sweet potatoes or giving out recipes for homemade cranberry sauce. The company’s weekly sales flyer includes a disclaimer warning of “intermittent supply levels on advertised items.” It’s likely an on-sale item will run out – and be unable to be replenished – before the week-long promotion is over, she said.
Woodman’s has adjusted its brand mix to avoid placing limits on high-demand items.
“Customers should expect that they may not be able to get the specific brand or size of the item that they normally buy, but there’s normally alternate similar product from a different manufacturer,” said Woodman.
Supply chain setbacks are the reason Michael Glorioso considers this to be “probably the most challenging time” for his family’s 75-year-old grocery store. And that’s despite steady demand and “robust” sales. Glorioso’s Italian Market on Milwaukee’s East Side has long been known for its cured meats, homemade meatballs and authentic wine selection. Importing most of its products from Italy, the business has had to remain two steps ahead of supply chain curveballs.
“We’ve been able to adapt, and that’s a direct result of our team being very resourceful and recognizing that the situation is fluid and that what we have on our shelf today might not be there tomorrow,” said Glorioso, general manager of the market.
For instance, one of the store’s most popular items, pasta, has been inconsistent for more than a year now. To avoid running out of any one of its 250 cuts, Glorioso’s backed up the top 100 best-sellers with a second brand.
“That’s worked out really well because, as we anticipated, the popular cuts are the ones that are being short on orders now because of supply,” he said, adding cheese shipments have also been spotty – even for brands produced here in Wisconsin.
Another consequence of an upended supply chain, prices have risen for meat and packaging, which has sparked questions from shoppers.
“When people see our potato salad go up 10 cents, … it has nothing to do with the potato salad – the potatoes didn’t go up, the mayo didn’t go up – but the plastic container that it goes in went up as well as the piece of paper that we’re going to put it in,” Glorioso said.
U.S. consumer prices in October saw the largest increase since 1990, up 6.2% over last year. Food prices jumped 5.3%, according to the U.S. Department of Labor.
Throughout the pandemic’s ups and downs, Glorioso’s has leaned on its differentiator as a single-unit, specialty grocer with a niche customer base. The store may not offer self-check lanes or pre-packaged grab-and-go meals, but on the other hand, “if you want your prosciutto sliced thin, we’ll slice it and show it to you and let you try it and make sure it’s the way you like it,” Glorioso said. The store also draws steady business with its own brand, which has grown from nine items to 250 in the past nine years. Glorioso said production of its own label has not been impacted by ongoing disruption.
Grocery stores are not the only food service businesses dealing with supply chain issues and their residual effects.
Milwaukee-based Hospitality Democracy, which operates AJ Bombers, Blue Bat Kitchen, Onesto and Smoke Shack, recently removed chicken wings from its menus after prices skyrocketed. The alternative was raising menu prices, but that didn’t sit well with the group and its brand.
“Our business is built on being local, neighborhood places that you can frequent often and not necessarily on one-time special occasion business,” said Alex Sazama, vice president of food and beverage and corporate executive chef at Hospitality Democracy.
With pre-processed foods difficult to secure, the culinary team has shifted toward using more raw ingredients to prepare certain dishes. While that reduces inventory expenses, it also requires more time and labor during a time when staffing is already tight.
Lobster and scallops have doubled in price since the start of the pandemic, but Hospitality Democracy has kept them on their menus at standard price because they’re top sellers.
“For the things that are really popular, we figure it out,” said Sazama.
The holiday season may present an opportunity for restaurants as consumers struggle to find the necessary items, or time, to prepare a home-cooked meal.
Hospitality Democracy is focusing on “center-of-the-plate options” that diners can pick up and serve as part of their Thanksgiving meal, he said. Its barbeque restaurant Smoke Shack is offering a menu of smoked turkey breasts, whole ducks and ham, as well as popular sides like mac and cheese and cornbread.
“It can alleviate some of that pressure at home to make that big meal,” said Sazama. “If you’re having a gathering, your turkey or duck or whatever meat you choose, that portion is handled so you’re not spending hours and hours in your kitchen.”