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According to McKinsey research, before 2020, consumer demand for food in the United States had been stable, growing at a consistent pace of 4% in each of the previous five years. The supply was dependable and predictable. Retail and food services had a roughly equal share of sales until the pandemic struck. Lockdowns and physical distancing forced consumers to eat more at home, which caused an increase in grocery sales and a decline in revenues at dining locations.
At the same time food and beverage manufacturers and distributors were dealing with fluctuating consumer demand, they also faced bottlenecks at ports, severe labor shortages in the trucking industry, layoffs, factory shutdowns, production cuts, and COVID-19 outbreaks. These conditions produced cascading effects, including scarcities in raw ingredients, extended production lead times, rationing among distributors, and retail outages.
The COVID-19 pandemic caused 4,200 disruptions in the first nine months of 2020, making it the most disruptive event in modern supply chain history, according to Resilinc’s Eventwatch risk monitoring system. By McKinsey’s projections, all companies can now expect major supply chain disruptions to become more common, with disruptions lasting a month or longer every 3.7 years.
