Supply chain crunch leaves produce sector ripe with challenges

A new word has entered the grocery industry’s always evolving lexicon: “Shelflation.” A close cousin of the well-known term “shrinkflation,” Dalhousie University professor of food distribution and policy Sylvain Charlebois defines it as when supply chain issues lead to overripe or less fresh food products making their way onto shore shelves.

That means drastically reduced shelf life for fresh products after consumers get them home. Increasingly, consumers are faced with limp lettuce, soggy strawberries etc., sometimes within just a couple of days of getting them home.

Canada is already notorious for how much of its food gets wasted, with some estimates saying as much as 45% of all produced fruits and vegetables end up in landfill. But “shelflation” is being caused by circumstances beyond consumers’ control—from increasingly volatile weather, to supply chain interruptions, to equipment malfunctions and labour shortages.

While none of these are uncommon—or even unmanageable—on their own, the pandemic has led to a confluence of factors that has exacerbated the challenges faced by grocers, says Canadian Produce Marketing Association president Ron Lemaire.

“You’re living with an organic product that is influenced by so many factors, but there was some consistency in how we managed our just-in-time delivery,” says Lemaire. “We had the system structured in a way that was quite effective and efficient. What we’ve seen over the last two years is a total upheaval of those efficiencies.”

As citizens of a cold-weather nation that relies on imported fruits and vegetables, particularly during the winter months, Canadians are no stranger to produce that has spent a lot of time travelling to reach grocery shelves.

However, recent issues—from droughts and floods on the West Coast, to a recent blockade of one of the country’s major trade routes in the Ambassador Bridge (responsible for about one-quarter of the food and consumer goods that enter Canada, according to a Retail Council of Canada estimate)—have underscored just how delicate the system’s balance can be, says Lemaire.

“Everyone has traditionally seen the on-farm labour challenges and the gaps, but now we have last-mile labour challenges—from the distribution centre into the store and then just getting products on shelves replenished,” says Lemaire.

Ted Onyszczak, produce buyer for Toronto-based organic grocer The Sweet Potato, says his California-based supplier of boxed salads, recently reduced the number of shipments to his store to once a week because of trucking issues.

“You want at least two shipments per week to guarantee freshness on the shelf,” says Onyszczak. “The salads usually come dated for about 10 days out, so if you’re getting one shipment per week, by the end of the week your boxed salads are down to three or four days before their expiry date, and they don’t sell at that point. People want to buy them to keep them in the fridge for a week.”

Onyszczak says bunched greens from California have been “weak” this year, mostly because it has been a poor growing season. “It’s been a bad season for California,” he says. “Even our top brand of greens [Cal-Organic Farms], who are usually rock-solid…have been up and down in quality.”

Shipments of other items, such as arugula, have been withheld simply because the quality wasn’t up to snuff, he says. “Putting [organic produce] on a truck from California for two or three days is always a dicey proposition.”

Fresh City Farms founder and CEO Ran Goel, meanwhile, says he’s seeing “much less selection” on some imported produce, not to mention an increasing number of quality issues around highly perishable items.

“On things like raspberries and strawberries, we’re definitely seeing quality issues come to the fore,” he says. Fresh City’s online shoppers are particularly sensitive to receiving low-quality items, he says. “Two days after a delivery, people will say ‘I received this pint [of berries] and it’s already gone bad. For certain SKUs on the produce side, we’re [issuing] more credits.”

And the challenges are not specific to any one region or any item, says the CPMA’s Lemaire. When recent imports of citrus products into B.C. were impacted by weather and port delays, for example, they were brought into Canada through the East Coast and then transported—at significant cost—to the west.

Citrus fruits tend to be hardier than stone fruits like peaches, and can endure the longer travel time, but such steps underscore the amount of problem-solving required to ensure that products arrive on shelves, even if they have a few thousand more kilometres than is customary.

But there is still a cost of all these delays and workarounds to grocers and customers. Some CPMA members have told Lemaire they’re seeing up to three times more waste, largely because of the culling of items taking place behind the scenes.

The grocery industry functions using what Lemaire describes as a just-in-time approach to getting food, but grocers have been actively adjusting timelines to ensure they’re still getting a stream of highly perishable items like leafy greens and berries.

“The hiccups come into play when you have weather issues like the snowstorm we had,” he says. “Which comes back to death by 1,000 cuts; we’re seeing it all happen at once.”