COVID-19 has affected every major industry in the past three months. Arguably the most severely impacted is the food and beverage industry. However while many restaurants are taking major losses, sales are doing well for Consumer Product Goods (CPG), packaged food and beverage brands.


Raw Material Concerns

In a recent video message, Nestle’s CEO Mark Schneider shared that his company needs to focus its efforts on securing supplies, manufacturing and logistics.

Handling a packaged food and beverage business during this time means closely monitoring supply chain to ensure enough raw materials to meet consumer demands.

As noted by Nestle and many others, there are current challenges caused by COVID-19 for sourcing raw and packaging material and solving them will be a priority for most food and beverage companies. For many businesses, this pandemic has highlighted the importance of securing diverse sources of raw material just in case there are restrictions placed on one of the sources, such as government regulations or an outbreak. Having multiple sources for materials will help prevent a breakdown in the supply chain if one vendor/source cannot deliver its product due to the pandemic.


Manufacturing Challenges

Another concern with keeping up with the demand for CPG products is manufacturing. Manufacturing CPG products during this time raises the concern that employees who operate the factories can contract and spread COVID-19.

Tyson Foods has chosen to suspend one of its manufacturing plants in Columbus Junction, Iowa, after 24 employees tested positive for COVID-19. This plant employs roughly 1,400 employees. Due to the outbreak at the Iowa facility, Tyson Foods has taken extra precautions at all of its other facilities to prevent similar closures. Precautions include enforcing social distancing, providing Personal Protection Equipment (PPE) and taking employees’ temperatures before entering manufacturing plants.

These extra precautions, while necessary, are the cause of delays in production. For example, if a plant is being deep-cleaned more often, this may cause production time to decrease. Similarly, if employees are required to social distance, this may increase lag time in production.


Adapting to Changes

Although sales are doing well for CPG producers, there are still other concerns related to sourcing and workforce. Businesses who adapt fluidly to changes in safety information and inventory supply and put processes in place to keep their employees healthy stand to thrive during this pandemic.


To mitigate possible risks or to discuss options for your business to adapt to the changing marketplace, contact Green Hasson Janks Food and Beverage team. For more information and COVID-19 Resources, click here.

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POST WRITTEN BY

Ani Byurat

CATEGORIES CPA Food Bites

Ani Byurat has over a year of public accounting experience and is an associate within the Green Hasson Janks Assurance and Advisory Practice. Ani provides accounting and auditing services to a wide variety of companies and organizations that span multiple industries within the greater Los Angeles…Learn More