February 13, 2022 at 2:13 a.m.

Adapting to industry changes

Panelists reflect on supply chain disruptions with COVID-19

By Abby [email protected] | Comments: 0 | Leave a comment

MADISON, Wis. – When the coronavirus pandemic hit nearly two years ago, Craig Culver and his business were not prepared for what would unfold in the months that followed but quickly adapted to create a growing market of dairy sales.
“Before COVID-19, we were so ill prepared,” said Culver, co-founder of Culver’s. “We were so fortunate to have the drive-thru. The lines were long; we are the slowest fast-food restaurant in the world and I’m proud of that. We were able to take care of our guests.”
Culver spoke of the disruptions in the food supply chain and the way consumers think about their food as part of a panel, “Supply chain crisis: What we learned and where we’re headed,” at the Dairy Strong conference in Madison Jan. 20.
Culver was joined by Chad Vincent, CEO of Dairy Farmers of Wisconsin, and Scott Sexton, CEO of Dairy.com.
After an initial drop in sales in March 2020 for the fast-food restaurant, the year ended with an increase in sales of 5% in 2020 and 18% in 2021, Culver said. There were also over 50 new restaurants opened in those two years, despite supply challenges.
“I am amazed that somehow or another, our suppliers had it pretty much taken care of,” Culver said.
The one food source the restaurant did not run short on was dairy.
“We were scared, and it’s a mess yet today,” Culver said. “But when it comes to the dairy products, we haven’t missed a beat. You guys have done a great job supporting us and the United States. You keep producing, and the trucks keep getting to our places.”
Along with supply chain disruptions for restaurants, American households developed purchasing and eating habits. Because of this, grocery stores saw an increase in dairy sales.
“When the chips were down, they went straight to dairy,” Vincent said of consumers. “To me, that warms the heart because we all know the power of dairy and how good it is. Sometimes people like to pick at that because there are competitors out there that want to try and portray us as anything less than wholesome, and great for you and great for the planet and great for the environment.”
Vincent said consumer preference has changed beyond the grocery store with people wanting to know exactly where their food comes from.
“There is a higher level of transparency that is not just requested but demanded by consumers,” Vincent said. “A young 12-year-old girl is like, ‘I like dairy, but I’m not sure if it’s good for the planet and I’m not sure if the animals are really happy.’ When I was 12, I was like, ‘Can I stay out past 7 p.m. and ride my bike?’”
Sexton agreed.
“The younger the consumer is, the more they want to know about the companies providing their food,” Sexton said. “We all know what’s happening (on farms); we all know that that’s the truth. We are actually bringing farmers up to tell these stories because it is critical.”
Sexton also said companies will need to look at data to determine how to keep up with the changing demands.
“There are a slew of new technologies emerging, but we as an industry need to figure out how they all connect,” Vincent said. “I would focus on accelerating data and getting it into an open format where you can share. That is what’s going to be important to consumer preferences, and when these huge disruptions hit us, that you are agile and you can make changes quickly.”
Sexton said there is technology being used in the event of a recall to track a product from the store shelf back to the farm of origin in less than two hours.
However, the more pressing concern for food processors is available labor.
“We’ve got a restaurant here in town (Madison) that is advertising $20 an hour, and she could not get one single person to apply,” Culver said. “And that was just a crew member, not a manager or anything.”
All the panelists agreed the pandemic caused disruptions, but they have all learned things from it and feel better prepared for these changes going forward.
“We know bad things are going to happen to upset our industry that will upset the flow,” Vincent said. “Everybody I spoke to is a lot smarter today than they were a year ago.”
Sexton said there is good news for data in the future.
“Good news is there are a lot of digital systems today capturing and managing data,” he said. “I think a lot of what you will see is the openness of those systems and the connectivity of the data.”
Culver agreed that the pandemic has accelerated certain changes he thinks are good.
“We didn’t have online ordering or the ability to take tablets outside and take orders there. We were just way behind,” he said. “COVID-19 has pushed us to get those things in place. In many ways, it was good for us, but I still don’t want to go through it again.”


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