It appears that supply chain shortages are causing chaos from cereal to pet food. According to a report from Yahoo News, General Mills Inc missed Wall Street estimates for quarterly profit on Tuesday, as the Cheerios cereal maker grappled with soaring prices of raw materials and higher costs of freight and labor.
Shares of the Minneapolis, Minnesota-based company were down about 4% in premarket trade. Prolonged supply chain disruptions and a shortage of truck drivers in the United States have forced packaged food makers to incur higher costs, adding to spiraling prices of ingredients like wheat, corn, and edible oils that have already crimped margins across the sector.
To ease some of the cost pressures, General Mills, like peers Kraft Heinz Co and Campbell Soup Co, has bumped up the prices of its products. However, heightened inflation and supply costs in the quarter outstripped General Mills’ efforts to raise product prices, Chief Executive Officer Jeff Harmening said in his prepared remarks, adding the current environment is as “challenging as I have seen in my 27-plus years in the industry.”
Meanwhile, Bloomberg is reporting that McDonald’s Holdings Co. Japan will only offer french fries in small sizes from Friday after flooding at a Vancouver port and the coronavirus pandemic has cut off supplies of one of its key offerings.
While the fast-food chain is trying to address the problem with alternative flights and is cooperating with suppliers and importers, it will only offer small-size french fries from Friday through Dec. 30. Elimination of the medium and large-size offerings was necessary “to ensure that as many customers as possible will have continued access to our french fries.”
McDonald’s hopes that supply issues that will affect its 2,900 outlets in Japan will be resolved by New Year’s eve and said the move won’t affect its hash brown offerings. Customers will get a 50 yen (44 cents) discount on set items to reflect the smaller portion.
Set items at McDonald’s come with a medium-size portion of french fries and customers have the option of increasing or decreasing the size. At 74 grams and 225 calories a serving, the small size is about half the portion of the medium size offering.
Have you noticed some empty shelves in the pet food aisle at your local grocery store? The Johnson City Press contacted Ross Purdy at Food City to find out what’s behind the shortage and when those shelves might be fully stocked.
Purdy is vice president of merchandising at Food City. He said problems that have plagued the country’s product supply chain, causing bottlenecks and shortages, have had an impact on pet food.
And the biggest impacted segment of the pet food supply is canned food, especially canned cat food, according to Purdy. “You have heard about all of the port issues, well this is having an impact on the supply of canned pet food,” he said.
WCVB stated: “We’re on the phones daily with our suppliers and they’re trying to get the inventory as best as they can,” said Dan Lavalle, manager of Pet World in Natick.
“It’s tough on everyone, so we’re doing our best to try to get the product in a timely manner. But it’s a matter of containers being stuck out in the ocean,” said Eric Sives, a sales representative for Farmina Pet Foods.
When it comes to combating pet food shortages, Lavalle suggests that a little bit of variety can go a long way. “Try to give your animal some different options to try so you’re not stuck one particular flavor. Get them to try another flavor by that company,” Lavalle said.