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Supply Chain Woes Crippling US Food Sector

The global supply chain slowdown is affecting some of the largest food distributors in the U.S., which are having trouble fulfilling orders because of a lack of workers, Bloomberg reported.

Wholesale food distributor Sysco has been forced to turn away customers in areas where demand exceeds capacity, according to the report. Short supply has caused prices for chicken, pork and paper takeout packaging products to rise. Production of bacon, ribs, wings, tenders and other high-labor cuts of meat are also slowing down.

“There are certain areas across the country that are more challenged by the labor shortage, and our volume of orders is regularly exceeding our capacity,” said Sysco CEO Kevin Hourican said in a letter to clients earlier this month, per Bloomberg. “This has, unfortunately, led to service disruptions for some of our customers.”

United Natural Foods, another distributor, is also struggling to get food to stores on time because of the labor shortage and delays in imported goods, including cheese, coconut water and spices, according to the report.

“We anticipate additional supplier challenges in the short term with gradual improvement through the fall and winter,” a United Natural Foods representative said, per Bloomberg. The company is “working diligently to recover and bring their shelves back to normal inventory levels as quickly as possible.”

Sysco has been “aggressively hiring warehouse workers and truck drivers and offering referral and sign-on bonuses along with retention money for current staff,” Bloomberg reported.

In separate news, SpartanNash President and CEO Tony Sarsam told analysts on a call last week that the company is overhauling how it operates its warehouses, how it plans for sales and operations, how it optimizes its inventory, how it manages its network and how it approaches procurement.

Read more: SpartanNash Overhauls Supply Chain In Push To Return To 2018 Profitability

“This initiative … will address the short-term challenges in the supply chain,” he said. “It will also allow us to capitalize on the growth of our network in the long term.”

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