U.S. Food Suppliers Are Having Trouble Keeping Shelves Stocked

Leslie Patton and Deena Shanker

In this article:

(Bloomberg) — Some of the largest U.S. food distributors are reporting difficulties in fulfilling orders as a lack of workers weighs on the supply chain.

Sysco Corp., North America’s largest wholesale food distributor, is turning away customers in some areas where demand is exceeding capacity. The company also said prices for key goods such as chicken, pork and paper products for takeout packaging are climbing amid tight supplies. In particular, production has slowed for high-demand, labor-intensive cuts like bacon, ribs, wings and tenders, Sysco said.

“There are certain areas across the country that are more challenged by the labor shortage and our volume of orders is regularly exceeding our capacity,” Sysco Chief Executive Officer Kevin Hourican said in a letter to clients earlier this month. “This has, unfortunately, led to service disruptions for some of our customers.”

An analysis from DecaData, which tracks retailer transactions with shoppers and manufacturers, shows that retailers are bumping up against manufacturer capacity as they stockpile ahead of the holiday season. In July, the incidence of suppliers limiting or putting a cap on orders from customers was more than double what it was in January, its data show.

Another major distributor, United Natural Foods Inc., is having trouble getting food to stores on time. The company said the labor shortages, as well as delays for some imported goods like cheese, coconut water and spices, are causing the problems.

“We anticipate additional supplier challenges in the short term with gradual improvement through the fall and winter,” a United Natural Foods representative said. The company’s top priority is to support customers “by working diligently to recover and bring their shelves back to normal inventory levels as quickly as possible.”

U.S. companies across industries are reporting a dearth of workers amid sweetened unemployment benefits, stimulus payments and a pandemic that has reduced the appeal of in-person employment. Houston-based Sysco is aggressively hiring warehouse workers and truck drivers and offering referral and sign-on bonuses along with retention money for current staff……Story continues

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