While there is no silver bullet solution for the supply chain problems the industry is forced to deal with, Produce Blueprints experts’ collective wisdom coalesces into six priorities for alleviating supply chain pain.
Putting all your proverbial eggs (or fruits and vegetables) in one basket is a risky proposition. A wide range of problems can jeopardize product flows originating from a single grower or region.
Our experts discussed multiple challenges—weather, water rights, regulation, labor availability, and transportation capacity—that serve as the impetus for geographic diversification of the grower community.
The options for sourcing fresh produce have expanded beyond the traditional geographic locations.
Noting the extensive regulation and land cost in California, Kenny Lund, executive vice president at Allen Lund Company, LLC, BB #:107465 talked about the volume shifting to other locations, notably Texas and Canada. The latter includes an increasing volume of produce that is grown in greenhouses.
Martha Montoya, CEO of Agtools, Inc. BB #:355102 discussed the importance of adopting a more global perspective. Initially, she recommends looking south to diversify the supply base.
“We have to at least understand the Americas,” says Montoya. “Mexico, Chile, and Peru warrant attention and [suppliers] need to get invested there in some shape or form.”
Diversification is also a valuable tool to alleviate product availability risks related to supplier consolidation and acquisition of smaller competitors.
Doug Fisher, vice president of Insights at ProduceIQ BB #:368175 notes that companies shouldn’t be solely reliant on a small player whose capacity is eliminated or becomes dedicated to larger buyers. He suggests a network approach to sourcing.
“A network is a lot less risky than a chain,” Fisher explains. “If one link in a supply chain breaks, then you’ve got a problem. A network of suppliers provides redundancy and resiliency from more people working together.”
This an excerpt from the Supply Chain Solutions Department from the May/June 2022 issue of Produce Blueprints Magazine. Click here to read the whole issue.