A Hard-Hitting Pandemic and the Canadian Food Supply Chain

August 3, 2021

When looking at articles from spring 2020 as the pandemic was emerging, it’s evident that the general public had a negative outlook on our global food supply chain and an overwhelming fear of food scarcity. The shelves of meat departments and non-perishable aisles across Canada sat empty for weeks at the beginning of the first mandated quarantine. However, after emerging on the “other side” (keeping in mind that the pandemic is not over yet), it does look like the results are not nearly as bad as the outlook from last year.

Our food supply chain faced many challenges with material and labour shortages, transportation and logistics, and massive consumer demand fluctuations. Companies that were able to pivot quickly, reevaluate their business practices, and embrace change wholeheartedly are coming out on the other end with a positive outlook and better contingency plans for future interruptions. However, companies that have adopted increasingly more Industry 4.0/Digital technologies are emerging on top.

Read on as we look at some of the most considerable Canadian food supply chain disruptions, what caused them, and how digitization is making massive changes in the industry.

Food Supply Chain Disruptions

Labour Shortages

Throughout the Canadian food supply chain, many individual industries have a large population of migrant workers. From farming to food processing and packaging plants to warehousing and beyond, migrant workers are a necessity to fill in labour shortages and seasonal positions. But what happens when they can’t get here?

Migrant workers have faced border closures and mandatory isolation throughout 2020, and it continues as we plug through 2021. Many workers were unable to come to the country as the Canadian border has been closed since March of last year. And workers that have received exemptions are facing mandatory isolation. Since many migrant workers live in a “crew house” type situation, they have to find a place to independently isolate and finance that time. The financial stress of isolation, both having to pay for a location to isolate and not receiving a wage during that time, has deterred many workers from taking jobs and making the trip to Canada.

Manufacturing Plants

Manufacturing plants seem to be the part of the Canadian food supply chain that has been hit the hardest due to the pandemic. Requiring a large workforce and relying heavily on their demand outlooks coming to fruition, plants have faced a few different disruptions. Many plants employ a labour force that is at least partially migrant workers, and as noted above, migrant works have been faced with border closures and mandatory quarantines that they can’t afford. But these aren’t the only labour shortages to note.

Across Canada, workers are required to isolate if they show any symptoms or have come into contact with someone who tested positive for COVID-19. Meaning many workers have had to take up to two weeks off, even if they didn’t end up testing positive. To further complicate this, many migrant workers live in “crew-house” type situations which keeps people from different families (and who all work together) in close quarters, making social distancing and contact tracing even more difficult.

Canadian parents have had to make difficult childcare decisions as children stay home from school due to closures and online learning. One parent often has to stay home full time, meaning many workers have had to take extended leaves or even quit their jobs to care for their families.

Beyond labour shortage issues, manufacturing plants have had to reevaluate their processes and procedures around social distancing, a concept we haven’t had to deal with before. Processing plants, particularly in the meat industry, are extremely labour intensive and require many workers to be on the floor close to one another. Often, even when worker availability isn’t an issue, shifts are short-staffed to adhere to the new social distancing requirements. New scheduling efforts have also been made to stagger shifts and develop working pods to keep contact tracing as simple as possible.

Unfortunately, not all social distancing efforts have been successful. Many manufacturing and processing plants across Canada have been the epicentre for COVID-19 outbreaks. High infection numbers and tragic deaths due to the pandemic have led to multiple plant closures. Most notable are the temporary closures of the Belmont Meats plant in Toronto, the Cargill meat processing plant in Guelph, and the Olymel pork processing plant in Red Deer.

Manufacturing plants also had to pivot for consumer demand. With the mandatory closures of restaurants, many plants resized their packaging to suit families rather than large-scale kitchens. The Little Potato Company made great efforts to provide Canadian consumers with family-sized and pre-seasoned options that they previously wouldn’t have carried as they catered mostly to restaurants.

Bottlenecks on Farms

The closures of significant meat processing plants across Canada, the slowdown in production lines due to labour shortages, and massive changes in consumer demand have been borderline catastrophic for Canadian farmers. This bottleneck effect has left thousands of heads of livestock and tons of crops to sit waiting for processing. Leaving the farmers to cover the costs of feeding, housing, and caring for animals that should have already left for market and footing the bill for their spoiled crops that were left too long.

Also, considering the time of year when the pandemic began, farmers were already beginning to sow their crops. Many farmers decided to destroy the crop before putting in the capital, labour, and time to help it grow.

Transport and logistics

While they didn’t face as steep of challenges as the manufacturing sector, food transportation and warehousing have had to overcome some disruptions. Much like the other food supply chain sectors, labour shortages were also a challenge to be faced; many migrant workers who work in transportation were unable to cross the border.

Government-mandated transportation restrictions on land, water, and air travel made it more difficult to move goods. But beyond that, strict rules previously placed on exports and imports had to be reevaluated to keep food on our shelves and keep industry moving. Changes to import and export regulations have been made throughout the pandemic to meet those needs and keep more Canadian foods in Canada.

Warehouses dealt with new social distancing regulations. Attempting to keep up with demand while short-staffed and sticking to social distancing rules posed a few challenges. Picking orders quickly and loading trucks safely were big pain points for companies to navigate.

Massive Changes in Demand

Probably the most notable change caused by the pandemic was the massive change in consumer demand. With the public ordered to stay indoors and to avoid public spaces as much as possible and the mandatory closing of restaurants, Canadians began cooking at home more. While this resulted in empty grocery store shelves and a little hysteria at first, once the supply chain was able to catch up, many consumers enjoyed cooking with their families, learning new recipes, and returning to comfort foods like mom used to make.

With mass quarantine well underway, Canadians began looking for more new ways to connect to the people around them while sticking to a safe distance. Social media and news outlets revealed to the public how hard-hit farmers were, leading to a re-connection between the public and farmers. Customers began seeking ways to directly support farmers in their community; this encouraged farmers to open roadside stands and mini markets where consumers could purchase directly from the farmer. Beyond supporting their community directly, consumers had the added benefit of seeing where their money goes, transparency in food handling, and more eco-friendly and ethical food options.

It shouldn’t come as a surprise that once consumers began cooking for themselves, they began to care more about what was going into their meals. This pivot to seeking out healthier options led to consumers demanding more ethical choices and healthier plant-based meats. The issues faced in the meat processing industry didn’t do much to instill trust in the public’s mind, and the effort to “control what you can” began to expand. Fast food restaurants worldwide have started seeking high-profile acquisitions to include plant-based foods on their menu (ex. McDonald’s McPlant) as a result.

Industry 4.0/Digitization

Industry 4.0 is the name given to the fourth industrial revolution, the digitization and automation of the manufacturing and industrial sectors. The focus on connectivity, automation, and advanced monitoring technologies allows for advances in production efficiency, expanded customization options and abilities, and an increase in the speed at which a product can reach market. While Industry 4.0 did begin long before the pandemic started, COVID-19 has brought it to the forefront of the C-Suite’s mind like a slingshot. Companies positioned throughout the Canadian food supply chain that have adopted digital technologies, and continue to move in that direction, are the ones who were best prepared to deal with this massive disruption and have the most promising future outlook.

Digitization in Manufacturing Plants

Many manufacturing and processing plants are dealing with labour shortages by fast-tracking automation programs. Plants have started instating smart factory solutions like collaborative robotics that work alongside human workers to make specific tasks easier or faster and autonomous material movement with automated or remote-controlled forklifts and cranes. The industrial Internet of Things, which is all of the physical sensors placed throughout the plant, provides real-time data on efficiency and helps maintenance managers plan their predictive maintenance schedules. Some technologies have even provided companies with the opportunity to monitor employee social distancing and if face coverings are being used.

Digitization in Transport and Logistics

Manufacturing and processing plants aren’t the only ones adopting digitization; the goods transport and logistics industry has been moving forward with Industry 4.0 wholeheartedly. Warehouses are becoming increasingly automated, instating storage and retrieval systems like smart-picking robots and drones to complete inventory inspections. This change allows companies to keep fewer staff on shift, providing a better social distancing and contact tracing opportunity. One employee can monitor the automated systems while the robotics and drones carry out laborious tasks.

Goods transportation has seen a positive uptake of digitization as well. Fleets are managed digitally with cloud-based programs, driver routes are optimized to make more deliveries in less time, and carrier analytics allow companies to monitor the location of their goods even when using a third party. We’ve also seen widespread adoption of contactless delivery options.

Empowering People

In the past, we have seen a negative attitude towards automation. Widespread fear of “robots taking our jobs” made companies hesitant to adopt automation and staff reluctant to use it. But that doesn’t have to be the case; companies who position their digitization as empowering to their workforce are seeing a more enthusiastic uptake. Seeing automation as an opportunity to make work more comfortable and safer while encouraging enhanced performance has put the human value back into Industry 4.0.

“Edelman Trust Barometer research reveals that 65% of people will change who they buy from based on how brands managed staff safety, wellbeing, and security during the COVID-19 pandemic. Empowerment, ethics, and sustainability are now priority in manufacturing.” (https://blog.global.fujitsu.com/fgb/2020-08-16/covid-19-has-changed-the-business-landscape-how-will-manufacturers-adapt-2/)

If anything at all, the disruption to the Canadian food supply chain caused by the pandemic has revealed shortcomings in the supply chain and a massive opportunity for companies to embrace digitization. The supply chain has moved towards a more transparent business model for both businesses and consumers. This transparency gives companies and consumers more choice when it comes to who they choose to do business with. Many choose to work with companies that source their materials in ethical ways, treat their people well, and provide them with a safe workspace.

The pandemic has been a massive opportunity for positive change. Companies willing to embrace that change and move towards digitization and automation will be better positioned to navigate the next disruption with ease and forecast a positive future with lots of growth. Companies preserving cash and not investing in digitization will undoubtedly feel the pain of an uncertain future.

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