Miss Piggy said it – if you’ve seen empty shelves in your local grocery store, it’s because people are lifting more than they need. Let’s be clear: there is no real food shortage in Canada or Quebec. Not yet. There may be short-term dislocations because demand for some item is higher than usual. But grocers and manufacturers alike say temporary shortages are to be expected in spite of a supply chain working overtime, because the system isn’t built to predict extreme, large-scale changes in buyer behaviour.
Canadian grocers operate their business with a “just-in-time” food system – meaning that they keep their inventories as small possible. This makes sense – produce is fresh and not wasted and money is not tied up in canned and paper goods.
A typical supply chain in the food business includes four players – the manufacturer, the grocery store, distributors and wholesalers. This system doesn’t work well when shoppers suddenly change their behavior – as in grabbing toilet paper, flour and disinfectants. If you see empty shelves where you shop, it’s because of your and your neighbors’ behavior, not because producers cannot supply products. Almost all members of Food & Consumer Products of Canada, a national association for manufacturers, say they’re confident in raw materials supply for two to five months or more, if current trends continue, according to a recent survey of the association’s members.
This does not mean, however, that temporary dislocations will not make prices rise or that the supply chain will not break in the future. It’s unclear whether enough migrant field workers will come to Canada to pick our crops or whether unemployed students will take their places. Nor is it clear whether meat and other processing plants will have to close. Canada has closed a quarter of its sawmills – that means a smaller amount of word chips which go into the production of toilet paper and sanitary wipes.
What is clear is that the food industry, like many others, will likely build some redundancy into their supply chains in the future so that it will be more reliable than “just-in-time”. That alone will make food more expensive.
We daren’t forget that changing weather patterns – climate change – also threaten our food supply and prices. According to a report by Dalhousie University and the University of Guelph, food prices are expected to rise between two and four per cent this year.
The fate of the restaurant business is another story. Vaughn Tan, a long-time observer of the food and beverage industry and a prof at University College London’s School of Management says there’s now going to be a fundamental rethink of what it even means to be a restaurant. We in the Townships have seen some of that already – pivoting to takeout and delivery, offering expertly made components to incorporate into a meal made at home, etc. Over the next months, consumer behavior and the creativity of restaurant owners will determine where and how we dine out post-pandemic.
Dian Cohen is an economist and a founding organizer of the Massawippi Valley Health Centre.
For information or to share ideas for future columns, contact Dian at: Cohendian560@gmail.com
Crisis as a Catalyst for Change – Never eat more than you can lift
By Dian Cohen
