The Friday Report: September 6th, 2019

“Fake” Meat Products and the Supply Chain

As consumer tastes change, the $90B global meat market is encountering signs of significant disruption.  Today’s consumer wants more meat-free options, including veggie burgers, meat substitute burgers and mushroom burgers.  Health, ethical and environmental concerns are starting to have an impact on the meat industry.  Alternative protein products, including plant-based ingredients used as substitutions for animal-based foods are forecast to reach a 10% share of the meat market in 15 years.

Not only are meat alternatives in grocery stores and supermarkets but also now some products can be found in fast food restaurants.  Burger King, KFC and Dunkin’ Donuts have revealed that they are adding or expanding meat alternative offerings.  The increase in the popularity of meat alternative products is having a mixed impact on the supply chain.  On a short-term basis, often makers of meat replacement products are challenged to have adequate production to meet demand.   Grocery chains and supermarkets tend to have problems determining where to position “fake meat” products, either near meat products or into vegetarian/vegan sections.

On a long-term basis, supply chains will adjust.  The need for livestock will decrease and correspondingly, so will the respective complex supply chain.  Plant-based protein products generally have fewer touchpoints in comparison with meat-based products, simplifying logistics management. 

Robotics Fears?  Robots Have Made a Positive Impact on Warehouse Operations

Despite human fears of using robotics in warehousing and manufacturing based on stories dreamed up by science fiction writers and filmmakers, the use of robots is increasing.  Historically, innovation has generated fear, whether of a loss of control, jobs or other factors.

Modern day robotics are used in many industries, from automating the milking of dairy cows to cleaning, driving and basic warehouse operations including case palletization and order picking.  Robotics has, thus far, produced a positive impact in the warehouse.  Wider use of robots does not necessarily mean the loss of jobs but instead, can mean that the role of human workers is different, more cooperative or elevated.  Utilizing robots to handle manual, repetitive tasks that demand higher rates of accuracy can be beneficial as compared to using human workers.  Robots do not require breaks, sustenance, sick days or vacations and can work longer shifts.

For more, please continue reading here.

Heparin Shortage Due to African Swine Fever in China

Supplies of the popular anti-clotting drug heparin are at risk.  While there have been some shortages of some heparin products, in general there remains sufficient overall supply.  An outbreak of African Swine Flu in China resulted in the deal of millions of pigs.  The active ingredient in heparin is derived from pig intestines.  Heparin is a critical drug used to stop clots and is in widespread use for heart attack patients.  A large proportion of the global supply of the active pharmaceutical ingredient (API) for heparin comes from China.

A major producer of the blood thinner, a subsidiary of Germany’s Fresenius SE has begun to limit allocations of the drug due to the potential of a shortage of raw ingredients.

150-200 million animals have been lost to the disease in China.