Dive Brief:
- As the floodwaters from Hurricane Matthew recede, farmers and food and beverage manufacturers are assessing the damage done and how producers can bounce back, according to a news release from the North Carolina Department of Agriculture and Consumer Services.
- In North Carolina, the storm impacted 48 counties, which are among the state's largest ag counties and contributed more than $9.6 billion of the $13.5 billion in farm cash receipts in 2014. Aside from crops, farmers in eastern North Carolina also raise poultry, particularly broiler chickens, and swine populations, a portion of which died as a result of the storm.
- Smithfield Foods reported that its processing plants in Virginia and North Carolina avoided significant storm damage, but high flood waters have complicated the company's ability to transport hogs and employees, the company said in a news release.
Dive Insight:
Natural disasters like hurricanes can have a major impact from end to end of a food or beverage manufacturer's supply chain. Damaged crops can constrict ingredient supplies, which means manufacturers could have to look elsewhere — or farther away — for the items they need for their products. That could lead to increased transportation and ingredient costs, especially if supply problems force farmers to raise prices.
Disasters can also interrupt production and processing if they damage a manufacturer's facilities or cause employees to evacuate the area. As employees return after a storm has passed, they may also have to be concerned about diseases spread by contaminated floodwaters, like infections or chemical poisonings. Manufacturers can make an effort to ensure employees are safe and informed, even from afar, demonstrating commitment to the larger community.
At the end of the supply chain, if a significant number of retailers remain closed after a natural disaster, manufacturers could be sitting on finished products they aren't able to sell. They could redirect those products to retailers in other non-impacted regions or donate them, but any unsold products could inch closer to their sell-by dates, which means decreasing the amount of time it could actually be bought. That could then increase levels of food waste and lost profits.
Manufacturers in non-affected areas are getting involved in the Hurricane Matthew aftermath by donating food to relief efforts in the U.S. and Haiti. That includes Hormel Foods' donation of 60,000 pounds of shelf-stable products from brands like Skippy, Spam, Hormel Compleats and Hearty Creations. Donations can be a way to humanize brands, positively associating them with humanitarian efforts.