The past few years have been redefining the norm for food and beverage manufacturers around the world — putting in place new challenges and opportunities for process iteration and refinement. The recent global wheat and sugar shortages have created ripple effects up and down the food and beverage industries at a global scale, and will likely continue to further disrupt the normal function and flow for at least the next quarter or two. While the immediate response to this may be concern, fear, or restriction, there are also lessons to be learned for food and beverage manufacturers and distributors. Below, we’re discussing the current events surrounding the global wheat and sugar shortages, how they can affect food and beverage companies, and what lessons can be learned from this global-scale change. 

Why is there a global wheat and sugar shortage? 

From the start of the pandemic in 2020 to the present, there has been strain put on some of the world’s most common commodities and goods: such as wheat, sugar, microchips, and most recently, baby formula and processed goods. 

Currently, there are global wheat and sugar shortages. There are many contributing factors, such as global instability in world superpowers (such as the U.S., Russia, Ukraine, and China), as well as more restrictive measures being put in place as national governments prepare to weather some more uncertain times in trade. While many think that shortages are a top-down problem only, it is nuanced and often begins with restriction, coupled with additional restrictions or transportation issues across the global supply chain. 

The most recent constraints have been attributed to two global trade events: India’s recent food protectionism stance, inhibiting its wheat and sugar exports to partner and trade countries, as well as Ukraine and Russia’s ongoing war. These countries play a large role in global commodities and trade, holding up to 30% of the world’s supply of wheat and sugar at any given time. This issue is complicated due to rising retail prices of food and beverage goods across many countries, namely the United States and China. 

How will food shortages affect food and beverage companies? 

While there isn’t a playbook that will show exactly what will happen as a direct result of the shortages, food and beverage manufacturers can safely assume that it will be much harder to get the ingredients needed to formulate their products. This is especially true if your business is extremely reliant on exports, or if you have not diversified your procurement strategy. 

You can also expect higher prices across the board, as inflation continues to rise in the United States and other key countries for distribution and manufacturing. 

How to make your food and beverage company recession-resistant 

If you’re looking for a resilient procurement model or refinement process that you can implement, it’s important to consider the health and agility of your current process. Diversifying your supply chain can enable you to more easily move with the ebb and flow of the market, keeping your prices as competitive as possible amid unprecedented and unpredictable market shifts. 

In order to properly track and manage the model, you’ll need an end-to-end management system that is suited to the needs of your business. Areas to consider when evaluating this solution include:

Traceability 

Beyond attracting additional public confidence, choosing a tool that puts traceability at the core of its offer allows you to have greater oversight and control over your customer’s experience. Knowing where your product is can help you to be more reactionary and agile in the case of a compromise or recall and can enable you to act quickly — no matter how large your fleet is. =

Vendor Cost Reporting, Tools, and Dedicated Interface 

Tracking and recording vendor cost reporting is a valuable tool that your team can enjoy through a single centralized solution. Having this information available in an easily-accessible way is vital to keeping your vendor records accurate, and efficiently diversifying your procurement strategy for your goods and other needs. Information and knowledge drive success in your organization, so housing this information in a single place can be incredibly helpful and time-efficient when compared to other more fragmented methods. 

Customer Relationship Management (CRM) Capabilities 

While this area of business doesn’t have to do with your procurement method, you may want to check to see if your current solution offers CRM capabilities. This is incredibly helpful in streamlining your operations, and housing your clients’ key needs in a single location for reference and resolution. 

Inecta provides traceability and software ERP solutions for food and beverage manufacturers 

If you’re looking for your next food and beverage software solution, reach out to the team at Inecta today. For over 20 years, we’ve continued to redefine success with food and beverage manufacturing and distribution companies, helping them to streamline and optimize their traceability, operations, fiscal, and management processes. For more information, please visit our website.