Food supply chain issues – the cause and consequence

Supply chain issues in the food industry

We have all seen images circulating on social media and in the news of empty supermarket shelves, echoing some of the challenges seen with stockpiling during the first Covid lockdown in March 2020.

It’s true, supermarket shelves are light in some areas across the country however, buyer demand through panic- buying is not the driver this time round – it’s due to issues around the supply chain.

Fueled by the pandemic and Brexit, the UK supply chain is under pressure, but why is this happening now?

Reasons for supply chain issues

• Brexit

Before the pandemic, about 600,000 HGV drivers were employed in the UK, with about 60,000 from EU member states. Many of the EU drivers returned to their home countries when lockdown and travel restrictions were imposed and have not returned. Why? Prior to Brexit, drivers from the EU were able to freely travel, however now – even with travel restrictions easing, the additional border bureaucracy and the fact many are paid by mile or kilometre and not by hour, mean these delays can be very costly. There is expected to be a shortfall of 70,000 HGV drivers by the end of the year.

• HGV Licenses

Covid-19 restrictions have also meant driving tests have been put on hold, so those looking to take their HGV license have been unable to which has resulted in a 62.5% decrease in drivers successfully completing their training, going from 40,000 in 2019 to only 25,000 in 2020.

The reality is the long hours, evening and weekend work and days spent living out of a small cabin is not something that will appeal to everyone – particularly those with young families. Currently the average age of an HGV driver is 55. However fewer than 1% are younger than 25. There is possible a reputation problem for the sector that needs to be addressed as there is the potential to attract a younger audience who may not have family commitments and looking to earn good money with a reputable brand.

• Pingdemic and staffing shortages

There is the general consensus across the industry that there is no food shortage, but issues arounds actually getting the food to store and also in some cases producing on site.

Andrew Opie, Director of Food & Sustainability at the British Retail Consortium, said: “A shortage in HGV driver numbers has resulted in minor disruption to some supply chains, delaying the restocking of some items in some areas.”

The ‘Pingdemic’ has had an effect on the food industry, with numerous factories unable to continuing the usual level of production as staff were asked to isolate. The recent exceptions brought in by the government around isolation for those who work in particular industries, including food production and supply, hopefully will ease this pressure.

The industry also has a recruitment hole following many of those who found themselves on furlough or redundant are being recruited back to their old roles.

Summer holidays and the accrual of leave built up over the last 12 months will also mean staffing pressures are unlikely to ease anytime soon.

• Excess Supply

There is also another problem with the current supply chain and that is the excess stock many supermarkets and suppliers are harbouring that will result in significant losses for many. Following the pandemic and the subsequent stockpiling, food retailers stocked up on products – however the issues mentioned above mean these products are sat in warehouses and not available on the shelves. This could result in a huge amount of unnecessary wastage and potential cost increases to make up the shortfall.

What can be done?

A number of the issues are now being acknowledged by officials and policy makers which is resulting in the fast tracking of some legislation and exceptions where needed.

Going forward, whether these amends are around isolation requirements or easing recruitment for non UK residents, change is needed for the longer term sustainability of the sector.

Recruitment and retention has long been an problem for the industry in all areas and this continues to be an issue that needs to be developed and addressed.

We discussed several ideas in our previous blog post about how the sector can appeal to a more diverse workforce. Incentive schemes, golden hellos, working conditions, greater brand awareness and engagement and innovative technology are all things to consider as we look to recruit from a UK based workforce for a sector that is becoming increasingly self-sustaining in terms of food production.

The Covid pandemic did catch many industries by surprise and the lack of contingency planning was felt by many, not least the food industry. Whilst there have been many lessons learnt over the last 18 months, the longer-term survival of the UK food industry is dependent on the sector being prepared for the next ‘Covid’ and that can only be done by people from across the industry, policy makers and business working together to develop short, medium and longer term solutions that specifically address the logistical and resource issues we have.