The industry says we have enough food. Here's why some store shelves are empty anyway

Tempers are getting short. Supplies of ground beef even shorter. People are looking into each other's shopping carts. Is that guy really going to use all four cans of chickpeas? That's a lot of emergency hummus.

But maybe a little supermarket paranoia is warranted after all.

A month ago, as the economy began to shut down and Americans started hoarding canned goods and other foods out of fear of shortages, industry giants offered assurance there was plenty of food and no reason for worry.

Yet availability remains spotty around the country, some shelves stocked and others empty, with Americans having particular difficulty locating all-purpose flour, yeast and beef.

And even as the industry rushes to get distribution problems smoothed out, other red flags are emerging. JBS, the world's top meat company, shuttered its beef facility in Greeley, Colorado, this week because of a coronavirus outbreak. In South Dakota, more than 300 workers at a Smithfield Foods pork processing plant tested positive for the virus, shutting the plant down.

The closure of the latter plant, which accounts for 5% of the nation's pork production, is "pushing our country perilously close to the edge in terms of our meat supply," said Kenneth Sullivan, president and chief executive of Smithfield.

Experts agree there is no aggregate shortage of food or other retail items offered at the supermarket. But many factors are causing product deficits in particular regions and in particular stores.

The biggest is that while about half of American expenditures for food used to be at restaurants and other such establishments, now almost all meals are being made in the home kitchen, so a distribution system that was built to supply restaurants with bulk items is struggling to adapt to far smaller packaging for home use.

In addition, while supermarkets and food companies have based their business model in the past on offering a wide variety (grocery stores often have 40,000 items), now most consumers focus on a smaller sliver of products, so supply chains are overwhelmed.

Consumer goods become hot-ticket items with little warning: This week's unexpected supermarket product is hair dye, as people go without a visit to the salon.

And finally, both in grocery stores and in the food distribution system, significant new efforts are being undertaken to protect workers - but they introduce delays and complications in getting food to its final destination.

Fred Boehler, president and CEO of Americold, which provides a temperature-controlled supply chain to manufacturers, said U.S. grocery stores, food-service distribution centers, regional distribution centers and manufacturing facilities traditionally each hold up to about 30 days of product. Together, that's four months of food in the system.

"But at the flip of a switch, the food-service sector slowed down and people wiped the grocery stores clean," he said. "It's sitting in everyone's home fridges and freezers, and we have to backfill the grocery stores."

In one of the two Safeway stores in Butte, Montana, cashiers work behind sneeze guards and daily customer traffic has slowed from 2,000 a day two weeks ago to 1,400 last week.

As with many stores around the country, this Safeway reduced hours to allow for deep cleaning and restocking, instituted special hours for seniors and people with compromised immune systems, and will soon install one-way paths through the store to maximize space between customers.

Nonetheless, essentials are flying off the shelves: toilet paper, hand soap and sanitizer, pasta, rice and beans.

For the most part, people have been friendly and understanding, but more customers than usual have been short-tempered.

"I haven't been yelled at as much in nine years as I have in the last two weeks," said Ellen Ott, store administrator and bookkeeper at that Butte Safeway.

At a Kroger in north Dallas on a recent morning, there was no corn or bananas. And where toilet paper normally would have been were two pallets in the middle of the aisle. Tacked to the empty shelves were signs that read, "1 each per customer."

On Wednesday evening, at the Hy-Vee store on the east side of Iowa City, there were no potatoes. Forty people shopped with a one-person-per-cart rule and one-way arrows on the floor. The place felt empty and eerie. Two weeks ago, a store employee was diagnosed with the novel coronavirus. Before that, a DJ who had done a music gig in the store's dining area had tested positive.

Small behavior changes are having huge effects, and the industry is having trouble keeping up, said Karen Smilowitz, a professor of industrial engineering at Northwestern University.

Trying to minimize the risks associated with frequent shopping, people are buying greater quantities less frequently, relying on shelf-stable foods that may have a longer supply chain.

And then manufacturers, pressed to produce more, are decreasing the number of discrete items to maximize efficiency. So there will be empty grocery store spots as a company's 20 flavors of yogurt winnow down to eight.

"In companies there is always conflict between operations and marketing," Smilowitz said. "Marketing wants more variety; operations says anytime you have to change out something in your machinery, that costs time."

The fundamental problem is that so much of America's food supply was heading toward restaurants in massive packages before covid-19 hit. Now, a 50-pound bag of flour or a 48-ounce tub of sour cream doesn't have many takers at Kroger or Safeway.

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Nutrition labeling also frequently doesn't comply with Agriculture Department and Food and Drug Administration guidelines for consumer sales, said Geoff Freeman, president and CEO of the Consumer Brands Association, a trade organization for the food industry. A company that sold hamburger buns to major fast food outlets could try to pivot to retail, but that entails changing packaging on the fly, a relaxation of labeling requirements and new distribution contracts.

The shifts being spurred now could be long-lasting. Freeman predicts consumers will see "a greater volume of fewer products. And in theory we'll see fewer new products on the market."

Ananth Iyer, a department head at the Krannert School of Management at Purdue University, said Americans are in a cycle of hoarding. Not only are people buying more food at the grocery store to eat at home, they're seeing reports of price gouging or import restrictions or stricter stay-at-home orders, which drives consumers to stock up even more, which leads to photos of empty shelves, which sends the cycle into a faster spin.

Grocery stores are having a hard time pivoting. The business is extremely competitive, and stores gain customer loyalty by offering wide variety. But 20% of the individual products account for 80% of the sales. As manufacturers cut back on different items, the grocery store is still stocked with things people don't necessarily need.

At a Whole Foods in Manhattan, shoppers on a recent evening spaced themselves out to socially distance alongside potted hydrangeas for $18 and bagged soil for $5. The deli counter was quiet and the pizza oven cold.

Beef and produce options were limited, but the chicken section was fully stocked, and there were plenty of cheeses and prepared foods - more than enough available to put together proper meals for weeks.

Still, there was no ground beef.

Jayson Lusk, head of the agricultural economics department at Purdue, said because agriculture is seasonal, commodity grains and meats were produced months and months ago, but that the real vulnerability lies in the people.

"We have plenty of hogs, chickens and cows. But they all have to go through these packing plants that are big enough that if one closes down because workers get sick, it's not a trivial amount."

And imports, he said, could be a problem. The United States imports about half of its fruit, such as grapes and bananas, and about 20% of its vegetables at this time of year are from Mexico.

"Trade of goods isn't being hindered at the moment, although global trade has fallen in the last month pretty significantly," he said. "There are some pressure points, but by and large it's a very positive story."

This pivot from restaurant to grocery store purchases doesn't come without risks, said Matt Wadiak, Blue Apron co-founder and CEO of Cooks Venture, which sells pasture-raised, slow-growth, heirloom chickens.

The USDA and FDA have deregulated labeling and packaging for 60 days to allow food to be redistributed. While there are usually four or five USDA food recalls each month, there hasn't been a single one since the beginning of February, worrying food safety experts about lack of oversight. Still, Wadiak said, the pandemic may change for the better the paradigm of how people shop.

"I'm seeing folks interacting with real foods in a way that I haven't seen in my lifetime, buying whole chickens, pork butts, things they might have previously thought of as daunting. They have the time now; they are learning and YouTubing."

Outside the Dallas Kroger, customer Eric True loaded half a dozen plastic bags full of groceries into his car. The retired 72-year-old described his anxiety level as low.

"This is the first time I've been to the store in four weeks," he said. "I pay attention to the rules and follow the Boy Scout motto, 'Be prepared.' I have friends who are in a state of denial who don't understand the consequences."

There are segments of the food system that might endure long-term stress because of supply-chain shifts. Sean Wittenberg, the president of Safe Catch, a company that specializes in canned and pouch tuna, sardines and salmon, is feeling strain that worries him.

"Canned tuna is up 200%; Safe Catch is up 400%," he said. "People are concerned about their future, and canned tuna is a cost-effective protein."

Canned tuna is the third-most-popular seafood item in the United States. If there is a disaster somewhere in the world, he said, there are four major hubs where most of the shelf-stable fish is produced.

"Because of this pandemic, the demand has exploded worldwide," he said. "The stress on the production system is everywhere. We can't hire more people to build up our lines. We have certain limitations, and all of the infrastructure is under stress, from the fisherman to the clerk putting cans on the shelf."

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