How specialized supply chains are resulting in shortages

I wrote earlier that one reason for the toilet paper shortage is that there are different manufacturers and different supply chains for suppliers for commercial and residential use that have different specifications. The supply side for each sector is carefully balanced to meet the demand side of that sector and under normal circumstances, the system works very smoothly. But when people started staying home in large numbers, the demand side shifted from commercial to residential, and that upset the balance.

That is also the case with the food supply chains. In the US, there are different suppliers for commercial use of food that supply restaurants and the like, while others supply supermarkets and grocery stores for home use. The food for the commercial outlets are packaged and sold differently (eggs come in 72-pack cartons, milk and beer are sold in large volume containers like kegs, and so on.) Again, this is a highly precise operation where supply and demand are carefully matched and under normal circumstances results in food being available when needed.

But again, as large numbers of people suddenly shifted to eating at home, that smoothly functioning system could not shift in tandem, resulting in shortages in grocery stores while at the same time the distributors to the commercial sectors had to dump their excess products.

On the radio show On Point on April 15th, food writer Michael Pollan discusses this question.

Pollan points out that the food supply system is highly dependent on human labor but that these people are paid very poorly, have very few benefits, have terrible work conditions, are often undocumented, and are looked down upon by the rest of society. These awful conditions are what enables people in the US to have cheap food but as Pollan says, “Cheap food is expensive” in terms of the heavy costs it exacts on the people who play vital roles in supplying it to the rest of us.

Now suddenly these people are being recognized as vital elements in the well being of the nation and are deemed ‘essential workers’ and they are using this momentary leverage to demand benefits such as higher wages and paid sick leave, things that they should always have had. Many businesses have provided such benefits, at least on a temporary basis, and he hopes that it will become permanent even after the crisis passes.

On the same show, the president and CEO of LaBonne’s, a small supermarket chain of four stores in Connecticut, says that due to this sudden increase in demand but limited increase in supply, he can get only about 60% of the daily needs of his stores which means that the shortages in some items are going to persist. He predicts that one way to ameliorate the problem is to consolidate and reduce the selection so as to simplify the supply chain. He says, for example, that milk may go back to what is was a long time ago and just become milk and not be split into whole milk, 2%, 1%, fat-free, and so on.

Interestingly, he says that his stores were among the first to institute a series of measures to protect the workers, by installing high plastic screens in front of the cashiers and curtains behind them. He says that they also take the temperature of everyone entering the store and those who show signs of having a fever are turned away. He says that most people go along with these measures but that a small minority object to what they see as an infringement of their right to privacy.

These are also likely the same people who demand the right to violate social distancing guidelines, go to church, assemble in large groups, and so on. For them, protection of these rights takes precedence over short-term measures designed to protect public health. Many right wing politicians and media personalities are supporting these protests against social distancing. I was curious if they are doing it from the safety of their isolation or if they were joining the crowds in the public spaces. My bet is on the former, since their usual stance is to urge people to do what they say, not what they do.


  1. vt says

    I’ve noticed this past weekend in our local Shaw’s Supermarket (A subsidiary of Kroger) here in Vermont that they now carry commercial/restaurant sized cans of various items such as chickpeas and kidney beans. All that I saw were Sysco branded, which is one of the largest (if not the largest) restaurant supply companies in the world.
    So some of that restaurant supply is now available to your average consumer…

  2. Who Cares says

    Funny how those people complain about the owner of what is private property putting up some minor demands of the people wanting to enter said private property because putting up those minor demands is somehow robbing them of their freedom.

  3. xohjoh2n says

    “Cheap food is expensive”

    “The three articles of civil service faith: it takes longer to do things quickly; it’s more expensive to do them cheaply; it’s more democratic to do them in secret.” (Yes Minister, S03E01.)

    I guess that also applies to the private sector, now.


    Well, if you’re not free to kill yourself and all your neighbours, how free can you really be?

  4. jrkrideau says

    eggs come in 72-pack cartons
    The US is weird. Here in Canada a carton of eggs is 180 eggs, 6 flats of 30 eggs per box. And you do not have milk in bags!

    I have not seen any commercial sizes in the local grocery yet, but I am off there tomorrow and may find they have arrived. I wonder if they might have a 1 or 2 litre can of yeast?

  5. jrkrideau says

    @ 3 xohjoh2n
    “The three articles of civil service faith:

    Well, I am not sure about No. 3 but 1 & 2 sound about right.

  6. Jenora Feuer says

    The university residence I used to live in got commercial egg supplies, so I remember those flats of 30 eggs. (The residence didn’t supply breakfast, each floor had a kitchen so you could make your own, and so flats of 30 eggs were something you could order from the main kitchen.)

    When they redid one of the floors with tile in the hallways rather than carpet, somebody used those egg flats as makeshift sound baffles.

  7. jrkrideau says

    @ 6 Jenora Feuer

    When they redid one of the floors with tile in the hallways rather than carpet, somebody used those egg flats as makeshift sound baffles.

    I used to know a sous-chef who played the bagpipes. He was collecting the cardboard flats to soundproof a room in his basement to allow him to play the bagpipes without being murdered by his wife. They probably worked well. At least I have not read of the sous-chef being murdered.

    Egg flats do, apparently, have the problem that they will emit noxious fumes in a fire. The university’s health and safety people probably had a fit when they found out about the makeshift sound baffles.

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