Suppliers detail COVID-19 effect on business, outlook— Part 2
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Bil Goldfield, director of corporate communications for Charlotte, N.C.-based Dole Food Co., listed a variety of ways the coronavirus has affected the industry.
“In the banana business specifically, it had been challenging to implement the necessary critical protocols for lockdowns, curfews and social distancing measures in the farm operations where we source, but protocols and procedures were adapted successfully to ensure worker safety. We also have been experiencing more labor absenteeism for obvious health reasons.
“Another impact we have found is that due to closures of schools and restaurants the demand in food service has plummeted dramatically,” Goldfield said.
Even so, the company was able to keep supplying customers with a high level of service, and it plans to continue doing so, labor and equipment permitting.
Dole sources bananas from eight countries in Latin America and has its own shipping service.
“Our ability to control this portion of our supply chain gives us confidence we can continue with uninterrupted supply,” Goldfield said. “At this point, we do not expect issues in the supply of bananas over the next few months, although we do expect that the March peak demand in many large metropolitan areas of the U.S. could return to normal.”
The report on potato supplies for the coming months is mixed.
“The outlook for the potatoes we produce and supply, which is red, yellow, and sweet potatoes is tight,” Halverson said. “The current supply is pretty well spoken for. We will begin harvesting fresh reds in Texas in the coming days; we are hopeful the crop is strong and can help put a few extra units into the supply pipeline.
“We don’t see material relief until the fall, and even at that, with trend-line yields, things could still be tight in reds and golds as the acres planted in the storage regions may be limited by seed availability,” Halverson said.
Alsum-Randall noted the dearth of foodservice demand might help suppliers fill the increased retail demand.
“We are cautiously optimistic about supplies for the next couple of months,” Randall said. “While the retail sector has been experiencing strong growth because of COVID-19, segments of the foodservice sector have been adversely affected. Some potatoes that would have gone to the foodservice sector will now be diverted into retail packs, which will help in balancing supply. Right now, while we are certainly planning for the future, we remain focused on the present so that we can quickly adapt as things change.”
Berries
Soren Bjorn, president of Watsonville, Calif.-based Driscoll’s, said that barring a major harvest interruption, berry supplies should soon be increasing as domestic production starts, with “very significant volumes” expected from California in May.
“One of the question marks in our mind is to what extent can we promote and drive consumption like we historically would have done,” Bjorn said. “It’s very clear that the pattern of shopping in the stores is changing. People aren’t all coming in on Thursday night or Saturday morning to do their shopping, so can you generate those impulse sales that particularly the berry category is very dependent upon? We build big, beautiful displays of great-looking berries, and that’s what helps sell the product. The question is, is that still what’s going to sell the product this year? And we’re about to find out in the coming weeks.”
In the early weeks of the coronavirus crisis, as stores got cleaned out by panicked shoppers, retailers were not wanting to talk about promotion and displays, Bjorn said. At first there was just a mad rush for product, and then demand slowed as some retailers temporarily eliminated some stock-keeping units to simplify operations.
“Probably the one thing that we have started seeing changing this week is that retailers are now beginning to look ahead, and they know what has to happen for us to be successful with the crop that’s coming — and of course behind the berry peak you’ve got lots of other things, you’ve got cherries coming, then you’ve got the stone fruit and so forth, and the grapes coming later on, so there are a lot of things that will have to get promoted,” Bjorn said. “They know that they need to figure out whether this is going to work on berries, so they are making those plans.”
Even as Driscoll’s wants to keep the product flowing, it is prioritizing the safety of its people, Bjorn said. Social distancing measures in the fields have included breaking up harvesting crews into smaller groups and adding many more wash stations so people aren’t congregating closely around just a few spots. Driscoll’s has also made it a point for growers to have plenty of sanitation supplies available in the fields and to continually press the message to its workers of the importance of following safety protocols.
Specialties
Andres Ocampo, CEO of HLB Specialties, Fort Lauderdale, Fla., said that some offshore suppliers of specialty produce have been limited by the lack of freight in passenger planes.
“For markets serviced only by passenger planes, it’s been a big blow,” Ocampo said. “For markets serviced by air freighters (those are still for the most part operational), it has been a lesser blow.”
Ocampo said some airlines have already officially canceled their flights for at least two more months, while others did so for April only.
“I expect that to keep changing and probably only start to get some normality in June, but a full service like pre-COVID 19, maybe only in the last quarter or into 2021,” Ocampo said.
Tom Karst contributed to this article.
