10% of Packaged Foods, Household Goods Out of Stock

American consumers should expect to see ongoing shortages of high-demand items like flour, canned soup, rice, pasta, and cleaning supplies throughout the summer, reports the Wall Street Journal.

Up to 10% of packaged foods, beverages, and household goods were out of stock as of July 5th due to slowed production and increased consumer demand spurred by COVID-19.

You Might Like
Learn more about RevenueStripe...

Major food makers like Campbell Soup, Conagra, McCormick, and General Mills have reported difficulties replenishing inventories as the increased demand for shelf-stable food continues.

“We are running flat out,” says Sean Connolly, CEO of Conagra Brands.

Campbell is facing the same problem after having run through its reserves of several popular items in the spring. “We’re racing to try to rebuild some inventory,” says Campbell CEO Mark Clouse.

As cases of COVID-19 continue to increase in states like Texas and Florida, retailers have once again been forced to put restrictions on items like toilet paper and milk to prevent consumers from hoarding.

Flour faces particular challenges, as the unexpected surge in home baking hits an industry that has been slowing down for years.

Flour sales in March were 233% higher than the same time last year.

“The orders are still there even though we are producing double to triple the normal volume,” says Bill Tine, head of marketing at King Arthur Flour Company.

King Arthur has started work at a new facility in Kansas and is increasing labor at the mills that make its flour to meet consumer demand. Farmer Direct Foods Inc., a supplier for King Arthur, is filling 35 trucks a month with flour up from the typical 18.

“There is enough wheat. There are a lot of mills,” says Tine. “The packing lines at the mills are the limiting factor.”

Editor’s note: Since there was not a real shortage of these items, and a shortage was not anticipated, this shows how much psychology plays in an economy, indeed perception becomes reality. And as this article shows, the psychology is persistent.

About Alice Green