If you are like me, the holiday decorations are all safely tucked away, overly-ambitious personal wellness resolutions have possibly already been broken, and we are completely focused on and full speed ahead into 2022.
I hesitated to do a “look ahead” dissertation at all, as if the last few years have taught us anything it is that we cannot accurately predict unforeseen events during a pandemic. Despite this fact, this industry, is more than ready for a return to normalcy, especially a stable costs and logistics landscape.
I’ve remained steadfast in knowing that through all the challenges behind and ahead of us that there are also great opportunities, and with that, we are are marching boldly into the year ahead.
The first question many have when looking in the crystal ball of the months ahead is when will our supply chain return to pre-pandemic operations. As much as I hate to say it, I do not believe we are going to see much “normalcy” surrounding costs and ocean shipping until Q2-2023. The delicate chain of global procurement is still constricted in layers that run the gamut of dominos from cost, labor, availability of trucks, chassis, ocean containers, and vessels – to say nothing about schedule integrity. As the various ocean carriers grapple with the list of issues, the pain rolls downhill to growers, importers, exporters, and customers.
As customers, growers, and end consumers all battle rising sticker shock, this raises questions for the organic category. When these increased prices were padded to an already high organics market, we learned there is a point at which consumers just will not pay the premium. There is still a positive halo around Organics as a category, however recent data shows that much over a 20% cost premium versus non-organic products will drive consumers back to conventional fruits and vegetables. With the tremendous increase in costs for labor, packaging, and transportation, I will be eagerly watching and analyzing how this impacts the organics category share.
Over the course of the last two years during the pandemic, we have internally audited, adjusted, and improved most of our standard operating processes and procedures, all with the goal of improving our service levels and maximizing internal efficiencies to reduce costs. As a result, 2022 will be a year where the industry is better prepared for the unpredictable than it likely has ever has been.
Technology will also be a critical player for corporate communications. We have learned new ways to connect with one another, often virtually, and a level of this we know will be utilized to keep our teams connected in the future. If I again look into that magical produce 8 ball, it would likely read “the future in uncertain” to the question of our working environment. What we do know is we have the technology in place to ensure our promise of Produce. Precisely.
My personal hope is we can come back together in person by Spring/Summer 2022. I’m proud of our ability as a large group to pivot to virtual, but there is a lot to be said about being in the office where our collective energy and positive culture brings us closer together and incubates innovation in ways that just cannot happen virtually.
Every day is different at Vanguard; with new growers joining our community, new crops and fresh varieties being introduced, and new markets opening. Keep up to date with what’s happening in our expanding world.