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11/22/2021

How Supply Chain Issues Will Affect Thanksgiving Dinners This Year

The supply chain disruptions affecting this year’s Thanksgiving meal began at the start of the pandemic when many food processing facilities were forced to operate well below capacity. Editorial credit: Sheila Fitzgerald / Shutterstock.com
The supply chain disruptions affecting this year’s Thanksgiving meal began at the start of the pandemic when many food processing facilities were forced to operate well below capacity. Editorial credit: Sheila Fitzgerald / Shutterstock.com

While consumers are expecting supply chain-related gift delays this holiday season, there’s another holiday experience that supply chain volatility will likely disrupt: Thanksgiving dinner.

Price hikes on consumer goods have been steadily increasing in recent years, and it’s estimated that the cost for this year’s Thanksgiving meal will reach a new high. As American Farm Bureau Federation Senior Economist Veronica Nigh noted in the bureau’s recent survey, there are a number of factors contributing to this cost increase. Beyond steady inflation, volatility across global supply chains has led to supply shortages and transportation nightmares, threatening the availability of Thanksgiving staples, and driving prices even higher for consumers. 

Although we’ve seen disruption across global supply chains before, the type and the pace of change we are experiencing today is unprecedented, and our Thanksgiving tables might look different this year as a result.

Availability and Cost Are Top of Mind this Thanksgiving 

The supply chain disruptions affecting this year’s Thanksgiving meal began at the start of the pandemic when many food processing facilities were forced to operate well below capacity. From there, the accumulated impacts of labor, production, and other resource shortages drove further volatility.

For instance, the production of fresh turkeys has been down over the past year, creating an imbalance between supply and demand. At the same time, climate events and materials shortages globally have caused the price of grain-feed to skyrocket — a cost that will get passed on to consumers when they go to purchase a turkey for the holiday.

[See also: Biden Supply Chain Strain Initiatives Include Better Data Sharing]

On top of production issues, labor and capacity shortages have resulted in transportation backlogs, causing delays in deliveries to local grocery stores. Finally, leading turkey suppliers are warning that small turkeys may be in short supply as nearly two-thirds of Americans plan to spend Thanksgiving with just their immediate family due to the ongoing pandemic.

Aside from the Thanksgiving turkey, there are several other traditional Thanksgiving staples that might be missing — or might cost more to procure this year. Domestic steel plants have been dealing with limited capacity due to pandemic restrictions while steel prices have remained incredibly high over the past 18 months. Because of this, favorite seasonal canned goods — such as canned cranberry sauce, green beans, or canned pumpkin — might come with a higher price tag. The same can be said for popular sodas, beers, or hard seltzers that require aluminum for bottling.

We’ve also seen price hikes across almost all the goods required for commercial baking, meaning packaged dinner rolls will likely be pricier at checkout. 

Anticipating Demand Will be Critical to Future Recovery

The shortage of certain holiday favorites and the likely impact on both consumer wallets and commercial revenues during a key season illustrate how closely linked supply chain value is to availability and response time for organizations. As a result, it’s critical that today’s supply chain leaders think farther into the future when it comes to demand and how they can align their resources to shape and meet that demand.

[See also: P&G’s Global Scale Helping Mitigate Supply Chain Woes]

But anticipating what the next few years will look like and what operational decisions can be made today to help ensure you are prepared to mitigate risk and deliver on goals is no easy feat. It requires supply chain leaders to analyze more data than ever before to identify external signals — like buying behaviors and trends, weather data, and insights from suppliers and distribution partners — and then use those insights to create more accurate, data-driven forecasts and predictions.

Evan Quasney
Evan Quasney

With a clearer view of key demand signals, supply chain leaders can align their organization’s resources to try to shape that demand early and feel better prepared to navigate unexpected spikes or disruptions along the way. 

While supply chain volatility is likely here to stay, if supply chain leaders prioritize a more active approach to demand management, we will hopefully be able to spend less and stress less next Thanksgiving, without having to give up that delicious can of cranberry sauce.

Evan Quasney is global VP of supply chain at Anaplan.

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