SFA asked its maker members to share their biggest struggles. To help tackle the four major issues shared: Labor, Logistics, Shipping, and Supply Chain, Jeff Grogg of JPG Resources, Zach DeAngelo of Rodeo CPG, and Jessica Spanton of Cyprus Ascendants, will strategize during the session “Solving for Success: Labor, Logistics, Shipping, and Supply Chain” at the Winter Fancy Food Show on Sunday, January 15, at 8:30 a.m. The session is part of the Maker Pass, a one-price ticket that costs $99 for SFA members, and $199 for non-members, which gets you access to sessions that are designed for both new and running specialty food companies.
SFA News Daily spoke with Grogg about the challenges.
What are some of the biggest problems affecting the specialty food industry today?
One issue still on everyone’s mind is the supply chain, which includes elements of availability, inflation, lead time, and labor. Most of these are at least a little bit better than 6-9 months ago but are still far from optimal or what we’d consider normal. Businesses still need to plan ahead and be proactive to ensure supply, especially when doing something new or trying to add capacity or capability via expansion. Equipment and building contractor services still seem to have long lead times and are unreliable.
An effect of the supply chain issues, and to some extent the retail buyer response to the resultant empty store shelves, has been a dampening of innovation. It’s a more difficult environment with less predictability in which to launch new items, and retailers are still highly motivated to just ensure there is something on the shelves. If it feels risky or they don’t trust the brand to deliver, they may not want to displace an incumbent supplier.
What mistakes related to logistics or shipping do you tend to see small businesses make?
In a disrupted environment, especially when supply is tight, relationships matter more, and good planning and communication pay off. Not to mention being a solid on-time payer! Too many brands run on “a finger in the wind” instead of good planning processes, and they don’t communicate well enough with partners. Now, the shipping/freight environment has shifted, there is capacity available, and prices have dropped. It’s time again to try to find the best value in a partnership rather than continue to pay the premiums that were in place a year ago. Brands often don’t understand their supply chain very well, which leads to overpaying and not partnering well.
Do you have any advice for specialty food businesses attempting to scale supply chain hurdles?
Plan, communicate, and deliver! Too often brands will be very hard on their suppliers but are terrible customers. It’s the brand’s job to know what they need in the future, not the supply chain’s job to cover up their poor discipline. Business owners and leaders need to have good systems and higher expectations of their own teams to work ahead and try to smooth out the supply chain. Brands with some maturity in planning and communication with their partners will inevitably receive better responsiveness in return from their supplier partners.
What would you like attendees to get out of this session?
Supply chain, despite all the disruptions, is less of a mystery and more of a formula than many early-stage brands appreciate. It’s hard, and it takes experience to do it well, but there are fundamentals that apply in terms of how to be good at the supply chain and operations side of the business. With ever more focus on achieving profitability and good margins, it’s even more critical to not just deliver but to be efficient. This session should be a discussion around issues that have come up in real-life situations, and how ideally brands would try to manage through these scenarios.
Related: Specialty Food Sales Basics: Q&A With Thorpe; Winter Fancy Food Show Education Preview: Building a Brand With Unite's Paye