What’s Keeping Your CEO Up at Night. . . How You can Help
By RDBA CEO Phil Lempert
The burden on the shoulders of your CEO has never been heavier since they first heard the words COVID-19. Many RDBA member companies have turned on a dime: ramping up e-commerce, redesigning in-store self service bars, implementing new sanitization procedures, and investing heavily into new technologies including micro-fulfillment centers. And those were the easy ones.
Your CEO today has weathered the onset of the pandemic and is now focused on larger issues that are influencing your store operations.
What is keeping the CEOs that I have spoken with up at night fall into three areas: labor shortages, climate change, and transportation, and their impact on prices and availability of the food and beverages in your stores.
We have all seen the signs on your store windows (and just about everywhere else) urging people to apply for jobs. There is a significant labor shortage not only at retail but throughout all U.S. companies. We are also faced with increasing wages and benefits to attract new workers to our industry. Supermarket retailers throughout the nation have announced shortening their store hours due to these labor shortages. Because of the pandemic, there are a multitude of reasons we have a labor shortage: the loss of over 700,000 people due to the pandemic, the governments stimulus programs that have put into question whether it’s better for an individual to work or just stay out of the workforce and make almost as much money, early retirement for those who just don’t want to work in the current environment, and the well-publicized harassment and treatment of supermarket workers from nervous and angry customers. We all have a responsibility to promote the benefits of working for our companies. While your focus is health & wellness, you may have friends or family members that could (and should) apply to work for your supermarket chain. In the mid 2000s as supermarkets were creating grocerant and new food service concepts, many chefs and other staff members moved from the volatile restaurant culture to the much more stable supermarket environment that offered them more stability, better benefits, and a career pathway. Now we must employ the same vigor to attract people to work in our industry at all levels.
You have witnessed first-hand the shortages on your store’s shelves, but your CEO is thinking about the long-term effects of climate change on our food supply. The ravaging fires in the northwest decimated soy and corn crops (which in turn impacts the cost of animal proteins) and the severe weather conditions in Brazil are driving up the price of coffee show the reality that climate change is impacting the ability to fill your stores’ shelves. It is not a temporary situation. Your CEO is working with the United Nations Sustainability Program, the CEOs of CPG brands, and NGOs to step up and mitigate the climate changes to create a new food system. For example, we are seeing more indoor farming throughout the nation with the Biden administration putting $500 million in the (controversial) American Rescue Plan package to build state of the art small meat processing facilities dotted throughout the country and reimaging the food supply chain.
Your responsibility in this area goes well beyond health & wellness and into the communications that you have every day with your shoppers to clearly and accurately communicate all the factors that are creating higher food prices. Sticker shock has always been a U.S. phenomenon that creates more anxiety and dismay as shoppers select their foods. Collectively we can diminish this emotion by honest and complete communication.
Food transportation is a mess. At the start of the pandemic, we had containers throughout the world locked down in ports due to COVID-19. To this day, we have containers unable to be moved and, in some cases, filled with foods that are rotting. The cost of shipping a container full of product from China, for example, has risen from $2,500 pre-pandemic to over $25,000 today due to the shortage. Domestically we have an aging truck driver workforce; it’s estimated that by 2023 we will have a shortage of 100,000 truck drivers. You may have heard the radio ads that trucking companies are offering higher wages, covering the cost of trucking training, and offering sign-up bonuses of $15,000. We have a huge problem that is only expected to become worse. It is another example of why we need to reimagine our food system and become less reliant on long-haul transport. Today 96% of all lettuces are grown in California, which are then trucked throughout the country. Having smaller, local, indoor and outdoor lettuce farms dotted throughout the U.S. is one example of how to solve this issue. I am not suggesting that any of our RDBA members switch careers to become truck drivers (heaven forbid – you have a much more important role for our shoppers) but you should explain the situation to shoppers, and when they are frustrated that their favorite better for you product isn’t on the shelf, to explain why.
The burden rests not only on your CEO, but on all of us and the key to easing the burden is to educate and empower our shoppers.
I’d love to hear what your CEO is doing – just send me a (confidential) email to Phil@RetailDietitians.com.