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Information lag. Coronavirus and the CPG supply chain
Just one week after March 15, 2020, when President Donald Trump claimed the US had ‘tremendous control’ of the coronavirus pandemic, California Governor Gavin Newsome ordered all state residents to stay home. “The order,” the New York Times reported, “represents the most drastic measure any governor has taken to control the virus.” Similar orders may become the norm, as ‘worse case” expert predictions place the COVID-19 death toll at potentially millions of people.
Given the public health scope of the coronavirus, it seems somewhat trivial, but the effective shutdown of the American economy will have massive impacts on the CPG world. On one hand, there’s probably never been more demand for a lot of the CPG world’s products (packaged foods, paper goods, and hand sanitizer in particular). On the other hand, it’s going to be harder and harder to source many of the products that Americans use every day.
The result will be a nation of 350 million people, who are used to living in relative abundance, adjusting to a life of relative scarcity. Many in the industry expect that long lines and empty shelves are going to become the short-term new normal. A recent survey by DigitalCommerce 360 revealed that 44 percent of surveyed retailers expect production delays. 40% percent expect ongoing inventory shortages throughout the year. What’s…
