How to navigate the impacts of the war in Ukraine and other events on the supply chain

Disruptions to the supply chain are not unusual for food and beverage processors, with most companies already prepared with contingency plans for the unexpected. But with climate change, the COVID-19 pandemic, recent inflation and the war in Ukraine, the food sector is being tasked with overcoming more disruptions and challenges than ever before.

Obstacles Canadian businesses currently face include rising transportation costs, staffing issues such as unemployment and high turnover (which lengthen production time), and increased ransomware attacks in food supply systems.

At NSF, we’re seeing across the board that this is a tough time for anyone in or involved with the food and beverage industries. Businesses are now having to think about everything from supplying alternatives in manufacturing to mitigating the risk of food fraud, all while maintaining food safety and bracing for even more unexpected crises.

The impacts of the war in Ukraine are especially widespread as the country is a major provider of raw materials such as fertilizer, sunflower oil, paprika, maize and rice flour. With the wholesale price of sunflower oil rising more than 1,000 per cent and retailers now rationing purchases, many companies have started looking for alternative suppliers and ingredients, such as rapeseed oil.

Meanwhile, other countries are being impacted, such as Indonesia, whose government recently enforced a ban on the export of palm oil, citing inflation exacerbated by the war and the pandemic. With increasing limits on key ingredients, there has never been a higher risk of bad actors entering the supply chain.

In fact, the Government of Canada’s Food Fraud Annual Report 2020 to 2021 found that several high-risk commodities (including honey, fish, olive oil, expensive oils and spices) were all susceptible to food fraud. Surveillance from the Canadian Food Inspection Agency found that samples were adulterated with foreign ingredients, species in fish were substituted and certain spices were diluted.

Though these are trying times for food and beverage processors, they have continued to persevere and demonstrate just how resilient they are by getting creative in enacting contingency plans. Solutions include pursuing new or novel substitutions and sourcing locally when raw material is unavailable.

An important step is maintaining food safety by holding new suppliers to the appropriate standards, being transparent with both others in the supply chain and consumers, properly disclosing substitutions on product labels and even making public announcements, as necessary.

Processors, especially those certified to food standards such as GFSI, should review their food fraud vulnerability assessments to identify foods that are vulnerable to fraud and the risks that adulteration, substitution or dilution present to consumers. This includes reviewing applicable databases along the supply chain, including raw materials, packaging, transportation and so on.

Any changes or substitutions throughout the supply chain should be communicated in writing to provide traceability throughout the production and delivery of products. This is an important component of any food safety program and can help to avoid mislabeling and confusion, especially at a time when shortages are on the rise.

Another solution for businesses to consider is partnering with other companies to collaboratively meet demands and crowdsource or share resources. Doing so can streamline efficiencies and strengthen partnerships, helping processors to continue meeting the needs of their buyers and consumers. Though the impacts of the world’s current events are sure to continue impacting the industry in the near future, there is hope and inspiration in the act of food and beverage processors banding together.

Karen Leacock is senior food safety consultant at NSF.