The COVID-19 Pandemic has created a large disruption in the supply chain that is being felt across the world. Restarting a high-demand global economy after a recession has been clunky and jerky like a sputtering old car.
So many factors have combined to make this issue go deeper and last longer than first expected. There are many full containers sitting in port, and it will take months before this bottleneck works its way back into a normal rhythm. Another factor causing this disruption is the lack of personnel and getting people back to work. Many companies have also adopted new operational processes for social distancing and other COVID protocols that are less efficient. Add other major items to the mix, like the shortage of automobile chips, and you have a perfect storm.
What has changed in the world of vending, micro markets, and coffee services?
First, product availability has been a major issue. Many of our manufacturers have run out of popular brands and can’t keep up with demand. One day we will receive an item and on the following delivery, we are shorted. The manufacturers have not been forthcoming about whether the outage is a short-term or long-term issue. If we know it to be a short-term issue, we wait for the product to return; however, if the shortage is more than a couple of days, we can replace the item with a different one. A sudden move to a new item has also created shortages of the new item. This can cause empty spirals or columns.
We’ve also had several scheduled deliveries canceled because our suppliers didn’t have enough drivers to make all their deliveries. Some of their drivers were making multiple runs but were unable to finish the week because they had already met their drivable hours for the week.
For flavored beverages that don’t have a strong brand preference, we’ve worked to keep the flavor alive by buying the flavor from whichever manufacturer has the flavor in stock. When selecting an orange soda, our customers may receive Orange Crush, Orange Sunkist, or Orange Fanta. Our goals have changed and now we just try to get our customers some type of orange soda. There are many other beverages where we have had to make similar substitutions: Gatorade vs Powerade, Minute Maid Lemonade vs Brisk Lemonade, Schweppe’s Ginger Ale vs Seagram’s Ginger Ale, 7 Up vs Sprite, and the list goes on.
There are other low-volume beverage flavors that the bottlers have just eliminated, so they can focus on their core items and the items that have higher profit margins. Whether or not these flavors return is yet to be determined.
One of our major distributors has openly shared their in-bound rates and shockingly, they are only receiving about 72% of the items they order. This forces A.H. to change out candy, snack, and K-Cup items to provide what’s available.
Our commissary has also been juggling our menu due to product availability. Certain meats become unavailable or their price doubles overnight. We offered a wide variety of breads and tortillas, and now these manufacturers and bakeries have reduced their offerings to focus on the core items. Currently, it is difficult to find pesto or tomato tortillas and specialized breads and buns, i.e., pretzel buns. Some of the popular, supplemental food items like Big AZ, Tyson, or Lunchables have been getting substituted with less popular items due to lack of inventory.
Code sensitive items like dairy were having issues as schools had unpredictable start dates and attendance levels. School meal trends were off, as many students were eating in the classrooms to allow for social distancing. This created one of two scenarios for us. We either couldn’t get enough milk, yogurt and juices, or the codes were shorter than we normally receive.
Finally, the equipment and parts themselves are more difficult to obtain. If you are hoping to have new equipment installed, the timeline will be extended. As discussed earlier, parts and equipment sit in containers, so demand is much higher than current supply.
How does this affect my break room?
Many Operators, like A.H., strive to provide an excellent customer experience. Even with all the supply chain challenges, our Team is resilient and works through these issues. We have gone through great measures to keep our points of sale full and uninterrupted. However, based on availability, we may not always have the most popular items, a column may be empty, or a different brand of the same flavor may be delivered.
We’re very fortunate to have great customers that have been patient with product changes and outages. We’re all in this together, so being flexible and going back to some basics is what our current situation requires. Soon, the variety of offerings will go back to normal…a time when an Orange Crush will be an Orange Crush.