Food manufacturers

Food manufacturers pass their biggest test | 2020-03-31

KANSAS CITY — The modern food industry has never seen a crisis like COVID-19. The spread of the virus has disrupted everyday life in the United States and around the world and has shed light on the essential role food manufacturers play in the daily lives of consumers. It is impressive to see how well the industry has responded to the challenges presented to date.

The importance of the industry was reinforced on March 19 when the U.S. Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA) identified food and agricultural production as one of 16 critical infrastructure sectors. The statement was crucial because, as state and local officials ordered businesses to close and issued stay-at-home orders to residents, critical infrastructure sectors needed waivers to keep operating and for their employees to work.

Normally, disparate laws and regulations enacted by states and local governments are nuisances that create market inefficiencies for large national manufacturers. In times of crisis, such local declarations have the potential to create significant supply chain disruptions.

To further complicate the issue, it falls to states and local governments to adopt CISA guidelines for granting waivers to companies deemed critical. Industry trade associations have worked diligently to ensure that as more state and local governments issue stay-at-home mandates, local officials understand their responsibilities and embrace the guidelines.

The pressure on food companies to meet retail demand has been immense. The very infrastructure of the industry is in transition as manufacturing plants dedicated to serving foodservice customers are adjusted to produce retail products. These types of line conversions and installations can take months during normal times, yet many manufacturers have done it in days or weeks.

The coronavirus has also highlighted the immense benefits of a well-trained and dedicated workforce. Management decisions, supply and demand planning, and logistics programs are useless without the frontline people needed to get the job done. At the best of times, executing plans presents challenges. The hovering presence of COVID-19 adds significantly to the pressure.

Food manufacturers understand the situation and are investing heavily to ensure their employees are safe and compensated for their efforts. Programs have been put in place to promote social distancing and limit team sizes.

Hormel Foods Corp. pays more than $4 million in bonuses to full-time and part-time employees who have helped the company meet customer expectations. Mondelez International, Inc. is raising wages for hourly workers by $2 through May 2 and is in the process of hiring 1,000 additional employees. The JM Smucker Co. donates $1,500 each to approximately 5,700 employees who are central to manufacturing, distributing and delivering products.

At a time when the US economy is rapidly slowing and millions of service workers are out of work, these initiatives may seem less substantial. But they reflect an awareness that senior managers understand the critical value of everyone within their organization.

Unfortunately, these are the first days of the COVID-19 crisis, and food manufacturing will face even greater testing in the weeks and months to come. The impressive manner in which this early hurdle was cleared builds confidence that the industry will rise to the challenges ahead.