Plants ‘operating 24/7’ to meet consumer demand for food amid COVID 19
April 20, 2020 by Aleksandra Sagan, The Canadian Press
Campbell Soup Company’s production goes into overdrive during what executives dub “soup season.”
Starting in October and ending with the close of winter, Campbell’s manufacturing centres run non-stop, staffed by extra employees.
Since the arrival of the COVID-19 pandemic, consumer demand has soared, eclipsing that of the company’s busiest time. In March, there were more orders during one week than are typically seen in the entire month.
“Our plants are operating 24/7 right now, which is fairly unusual for April, to be honest,” said Beth Jolly, vice-president of communications at the company’s meal and beverages division, which includes Campbell Canada. “It’s really just been a dramatic shift to a full-out production increase.”
Demand for food, particularly non-perishable products, has surged as physical distancing measures keep Canadians close to home. Grocers are ordering more from manufactures, who like Campbell have hired more workers, increased operating hours and enacted other measures to increase production.
At Campbell’s, weekly case orders for that one week in March jumped about 366 per cent at the company’s meal and beverage division, Jolly said.
Kraft Heinz Canada, meanwhile, reported an 80 per cent increase in demand for its signature Kraft Dinner product last month compared to March 2019, the company says.
To meet that demand, both manufacturers had to make several changes to ramp up production.
Kraft’s Montreal-area production facility – where more than 90 per cent of its food for the Canadian market is produced – now operates 24 hours a day, seven days a week, said Av Maharaj, chief administrative officer for Kraft Heinz Canada.
The company is considering new ways to increase efficiency. It may prove simpler to produce only one type of packaging for Kraft Dinner rather than a variety of box designs, Maharaj said.
“From an efficiency perspective – you don’t want to stop your line, change packaging, build out the other one for a smaller packaging line,” he said. “But rather, produce the most popular brand, popular size and that gets more product to the market.”
More difficult is changing production lines. Demand is down from food service clients, such as restaurants and hotels. But transforming a food service production line to one making grocery products is not so simple.
“In many ways, it’s like, you know, a giant Lego system where every piece is connected,” said Maharaj.
It can be very expensive to switch a production line and take months to do, he said.
“You can’t sort of switch overnight from one product to the next.”
The company has been in talks to see if any of its food service products, such as single-serve peanut butter packets, can be sold at grocery stores.
Campbell’s, meanwhile, is trying to focus more on its most popular varieties of soup.
“It’s a bit of a balance,” said Jolly, since the company has to ensure it has enough ingredients to match the increased production.
“It’s not as if we can just put out chicken noodle and tomato.”
Campbell’s also dipped into its existing stockpiles. The company had about 1.5 million cans with limited-edition Andy Warhol labels ready to release in May, but decided to forgo the promotional activity and release the product in April to address demand.
These changes allowed the companies to make more of their products quicker.
Kraft typically makes about seven million Kraft Dinner boxes a month, according to the company. Last month, it made roughly 15 million.
Once the product is made another challenge is getting the extra goods to distribution centres and eventually grocery stores.
“Most food manufacturers don’t own their own trucks,” said Maharaj, and Kraft hires local trucking firms to transport its goods from production facilities to distribution centres.
“Very often, that can be a bottleneck because everyone needs trucks right now to get food out the door,” he said, noting the company’s logistics team has been working hard and “for the most part, we’ve been able to find the trucks that we need.”
In some cases, Kraft is bypassing distribution centres entirely and instead shipping straight to grocers.
“That’s one of the ways we’re speeding up getting product to customers.”