Getting Back to Business of Doing Business Will Be Big Test of Our Resilience
If there ever was a genuine collective hope that the world would return to some sort of normality once we finally got out of the COVID-19 lockdowns bringing western economies to their knees, Russia’s brutal invasion of its Slavic neighbor Ukraine last month was a mortal blow to those aspirations.
As a crisis without any silver linings to provide even a hint of optimism, this reckless naked aggression by a madman thrust into position of absolute power is a grim and permanent game-changer.
At times like this, it’s impossible not to feel blessed for the being fortunate enough to live in a country like Canada, despite all the divisive forces and events that conspired to haunt the country over the last two years at a time when the need for unity of common purpose and resolve have never been greater.
But life must go on, and as inconsequential as many daily challenges and grievances may seem against the fatalistic backdrop of vicious open warfare a the heart of Central Europe, many Canadian industries will find it hard to come to full pre-pandemic speed quickly and smoothly enough to avoid the pains and pitfalls of rising inflation and disruptive supply chain bottlenecks worldwide.
As a sector heavily reliant on global trade and commerce to sustain itself, the resilience of the country’s fresh produce industry will undoubtedly be severely tested in coming months, says president of the Canadian Fresh Produce Marketing Association (CPMA) Ron Lemaire.
Over the last two years of COVID-19 pandemic, the $13-billion business has been severely impacted on numerous fronts, according to Lemaire, including aforementioned supply chain disruptions, product availability, border crossing issues, access to foreign labour, erratic weather impacts, employee absenteeism, and, as always, seismic changes in consumer buying habits.
Citing a CPMA survey carried out in October of 2021, Lemaire says that “a staggering majority of fresh produce supply chain participating in the survey (82 per cent) were adversely impacted by the persistent labor shortage, further aggravated by steep rises in wages and COVID-linked absenteeism.
According to Lemaire, this labor shortage—problematic at the best of times—has had a major adverse impact on the companies’ productivity, sales, profitability, access to products/ inventory, and new business development.
“Overall, prior to the Omicron wave, our supply chain saw a labor decline upwards of 26 per cent,” Lemaire laments.
With severe shortages of traditional “flex staf” to do the heavy lifting in packhouses and distribution centers, many companies were forced to cut down on the production of value-added items requiring further processing—slicing, dicing, mixing, bagging, etc.—and sophisticated packaging capabilities and know-how.
Unfortunately, there is no magic switch for these companies to turn back on to reverse the slide, according to Lemaire.
Moreover, the relentless pressure by the public and regulatory bodies to force fresh produce suppliers to make drastic cuts in the use of plastic packaging is further pushing the industry’s backs against the wall, Lemaire warns, undermining the industry’s competitiveness it has worked so hard to build up in the last 20 years or so.
While the industry has a moral duty to help stem the tide of global warming and climate change, Lemaire says its biggest critics are often barking up the wrong tree.
“Packaging plays a fundamental role in the fresh fruits and vegetable supply chain,” Lemaire sates, “as it allows for efficiencies in packing, shipping and merchandising.
“Companies looking at their packaging development need to understand the variety of paths and destinations their products will travel, and to consider the buyer requirements and the public trust associated to the packaging, price, and product quality and freshness,” Lemaire proclaims.
“When functioning within a commodity-based trading environment, pennies mean everything, and change across an entire sector is essential when addressing the challenges of competitiveness, sustainability and public trust.” Ready or not, those challenges will test the industry’s resilience to the max soon, with no quarter given or taken.