The Friday Report: July 8th, 2022

USDA Debuts Framework for More Equitable, Competitive, Resilient U.S. Food Supply Chain 

The United States Department of Agriculture (USDA) recently announced plans for a new framework that will help transform the food supply chain.  The new framework is designed to help not only consumers but also food producers and rural communities.  It will help increase access and options as well as create improved markets for small to mid-sized food producers. Using lessons learned from the COVID-19 pandemic and Russia-Ukraine War, the framework will serve to shore up food supply chains and resolve longstanding challenges. 

The Pandemic Assistance Program helped to fund immediate relief to food producers, businesses, and food workers.   The pandemic has continued, and supply chain issues have become exacerbated by the war between Russia and Ukraine.  Now changes need to be made from how food is produced, transitioned throughout the food supply chain to the point of purchase by consumers. 

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Walmart GoLocal Leverages Local Express to Extend Its Delivery Reach and Food Sector Penetration 

Walmart recently unveiled its plan to continue its penetration into the food sector.  The Walmart white-labeled delivery service, GoLocal will deliver for Local Express, an e-commerce platform that focuses on food and beverage retailers including delis, bakeries, butchers, and grocers.  GoLocal will provide same-day and next-day delivery service. 

The deal with Walmart expands the range of service and delivery capabilities to Chicago, Arlington, Texas and Miami, Florida.  Consumers have proven that there is solid interest in local delivery and online ordering.  The new partnership will enable smaller purveyors to be more competitive and potentially reach more customers. 

Currently, more than 500 stores have onboarded with Local Express. 

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Demand for Mexican Beer Outpaces Supply 

Beer bottling companies in Mexico have a new problem in 2022: keeping up with demand. Many companies struggled with lower sales revenue during the pandemic, however today they are struggling to keep product on the shelves.  

Mexican beer companies have struggled with a shortage of aluminum, glass, and malt since COVID-19, and this supply chain pressure is not likely to subside. In addition, the combination of increased demand and low supply has caused a whiplash effect that has sent beer prices skyrocketing. Although products are available, they are more expensive. Two of the most popular Mexican beers, Corona and Victoria, have increased by 24% since early June due to increased production costs.  

Beer makers are working to find solutions to their demand and supply chain problems. Many have stated that the supply chain is straightening itself out, as it now takes three weeks for malt to arrive from Germany instead of three months. Heineken Mexico has pledged to invest 1.8 billion pesos in an aluminum can-making plant to meet current demand and Grupo Modelo has recently expanded its glass plant in Veracruz, Mexico.   

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