Private brand meat suppliers under strain

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Private brand meat suppliers under strain

By Dan Ochwat - 04/29/2020

The short-term strain currently on the meat industry is immense, and it’s impacting both national and store brand meat supply .

The United Food and Commercial Workers International Union has said 22 meat processing plants have closed from workers testing positive for COVID-19. 

Private brand consultancy Daymon told Store Brands that 18 North American meat production facilities have had to close or reduce production due to illnesses — a number that represents more than 12% of total production capacity. 

Adding to the issue, President Donald Trump signed an order Tuesday evening for meat-processing plants to continue working, as they have been deemed “critical,” per a declaration under the Defense Production Act.

 

Andrew Moberly

Discussing how private brand meat suppliers are feeling the impact, Andrew Moberly, director of category solutions at Daymon, said over the past two decades the meat and poultry industries have consolidated, so the impact that is undergoing private brand suppliers is a reflection of the entire industry.

He said that in comparison to national brands, processors including smokehouses for hams, sausage and bacon have not yet broadly experienced the impact of shortages, so this is an area where sustained shortages could affect private brand production.

“Where retailers have experienced shortages, efforts have been made to fill shelves by any means possible, including packer labels, national brands or foodservice products," Moberly said. "As production challenges continue to arise, retailers and producers are quickly implementing contingency plans including focusing on bestselling products, pulling from freezer stocks and communicating these changes to consumers.”

Some companies forced to close plants include Smithfield Foods and Cargill, which have private brand production, as well as Tyson.

Trump's executive order will present further challenges on the relationship between workplace safety and ensuring supply chain security, Moberly said. “As producers ramp back up production, they should make every effort to implement the guidance from the CDC and OSHA to ensure worker safety. Producers are looking at changes that will fundamentally adjust how they process, including workstation setup, personal protective equipment, spacing between employees and protective barriers.”

He added that decisions like this could result in raised costs. “Meat and poultry production is based on efficiency, with worker safety imperative in this process. However, as these changes influence cost, unintended long-term affects to labor may arise, with automation technologies becoming more desirable.”