As a leading producer of organic grains in the United States, Terra Ingredients has always had steady business.
But since food manufacturing has ramped up during the coronavirus pandemic, business has been booming. Peter Carlson, director of ingredients at the processing giant, told Food Dive the company's outputs are up by about a third. Additionally, about 10% of that is coming from new customers.
"It's clear probably that their supplier doesn't have additional volume or additional capacity," Carlson told Food Dive.
The increase in demand started in the beginning of March, as many states and municipalities in the United States started to ramp up closures and social distancing to stop the spread of the virus. Consumers in turn went to their local grocery stores and started stocking up on CPG goods.
Carlson said all Terra's factories are running at full production. There is more demand for all of their products across the board, both for organic food for people and organic feed for livestock. As manufacturers increase their product supplies to meet consumer demand, Carlson said many have a deeper need for basic ingredients — and Terra is ready to serve.
The company has built its reputation on being a reliable and high quality source of ingredients. Carlson said customers know they can call Terra with an emergency requisition and get what they're asking for the next day. Grain supply isn't an issue for Terra, Carlson said. They have millions of pounds of the flaxseed, grains, cereals, pulses, beans and oilseeds that they are known for processing. Because of this vast supply, they are able to meet any production needs.
"It seems like this is going to be the new normal, at least for the medium term," Carlson said. "Clearly, with more people at home, there's some shift in what people buy — from store shelves instead of foodservice — that's different sets of ingredients. I think that's going to happen for some time here. ...If the cultural unease continues to rise, certainly that's going to continue the demand."
While it is important for workers in the plants to maintain social distancing, Carlson said the high tech equipment in the processing plants are placed and controlled in a way that helps ensure they keep their distance. Carlson also said they are conducting more employee safety monitoring and cleaning processes, in addition to the stringent regulations already in place prior to coronavirus.
The vast majority of the ingredients Terra processes come from the United States, so as long as trucks are running, the company will get what it needs, Carlson said. No shortages are in sight, though he said that the company may encounter some difficulties with fonio, which is new to the market and sourced from Africa. However, the ingredients that are currently common to food products are in abundance. Even the organic beans the company imports — garbanzo beans from Argentina and mung beans from the Black Sea region of Turkey, including Kazakhstan and Uzbekistan — are coming to the company for processing easily.
"We've seen no interruptions at this point," Carlson said.
Carlson said there may be issues in the future. India, which is under a country-wide lockdown, seems to have stopped all exports. And though shipments in South America continue to run smoothly so far, there's continued risk of port shutdowns as the virus spreads, he said.
The only place where Terra may see problems domestically is if truck transportation is interrupted, Carlson said. It hasn't seen that yet, though he acknowledged closures of facilities like truck stops are making it more difficult for the industry. But he's found the truckers that serve Terra to be more efficient, with many making the switch to all electronic records so they don't even need to roll down their windows when they arrive for shipments.
While the coronavirus pandemic — and the related rush on ingredients — has been a boon for Terra Ingredients' business, Carlson thinks that the higher volumes will continue, even after consumers are able to return to their old habits. He believes that the company is likely to keep all of the new business it's attracting now.
"Our goal is to do limited things, and we do those limited things very, very well — as opposed to meeting all needs for all people," Carlson said. "Given that chance to show our quality and our value proposition, I think this will be permanent customer acquisitions."