Supply Lines: Tuna sandwich season

Supply Lines
Bloomberg

American consumers are still loading up on pantry staples even as the economy opens up, leaving food supply chains tight as companies run at full tilt to keep up with buying.

In fact, demand is so strong there aren't enough empty cans to pack foods that end up on grocery shelves. That's according to wholesale food distributor ePallet, which is struggling to find enough containers for the chili and soups it sells to food banks and retailers. Labels to mark the cans are also hard to come by.

"There really is a shortage of product," said James Kwon, the chief executive officer and cofounder of ePallet. "People aren't buying based on brand or flavor, but based on availability."

Freshly minted home chefs are sticking with cooking for the forseeable future. It's a huge shift for Americans who before the pandemic consumed most meals at restaurants and cafes. With virus cases rising in the U.S., there's already a rush from food makers to get ready for the fall, when cooler weather and the start of the regular flu season threatens to leave grocery store shelves empty yet again.

Even without a second wave of virus cases this fall, many consumers could choose to eat at home to save money as the economy continues to struggle.

"Regardless of if there is a second wave or not, the economic outcomes will be challenging people who are still out of jobs," said Max Gold, also a cofounder of ePallet. "Everybody is prepared for the worst."

For seafood packer Starkist, sales of tuna and other ready-to-eat proteins have cooled down slightly but remain elevated. In March and April, the company's sales were up 120% from a year earlier. Now they're trending at an annualized increase of about 30%, according to Andy Mecs, the company's vice president of marketing and innovation.

That compares with normal growth rates in the single digits, he said.

"At retail, it's akin to toilet paper and paper towels," Mecs said. "We've been running our factories at full speed trying to keep up with demand."

Michael Hirtzer in Chicago and  Millie Munshi in Denver

Charted Territory

Years of rising global temperatures are thawing Russia's permafrost and turning the land into fertile soil, sparking a once-unthinkable business: soybean farming. The oilseed was planted on 1.1 million hectares in 2019 in central Russia, an 18-fold increase over the past decade and equal to about 7% of the total cropland in that part of the country. It's part of a larger trend that's sweeping the globe as warming weather pushes crops further toward the poles than they've ever grown before.

Today's Must Reads

  • Long jump | Cold and stale air conditions allowed coronavirus particles to travel more than 8 meters (26 feet) at a German slaughterhouse, a study showed, giving an insight into how meat plants turned into hot spots for infections across the world.
  • Got milk | One debate fueled by the virus is about whether to have steamed buns and congee (porridge) for breakfast, or milk and toast. It's a serious question in China, where the government is pushing people to drink milk to get more protein, a vital ingredient in building the body's immune system.
  • Battling the bulge | The U.K. is preparing sweeping restrictions on online and TV advertising of unhealthy foods in a bid to tackle the country's growing obesity problem, people familiar with the matter said.
  • Illicit seafood | Hundreds of industrial fishing vessels originating from China have been detected in North Korean waters in recent years in one of the largest known cases of cross-national illegal fishing, new research by Global Fishing Watch shows.
  • Rotten tomatoes | Tighter borders and quarantine curbs amid a fresh wave of Covid-19 cases in Australia have raised fears mangoes, citrus fruit, vegetables and other produce could be left to rot because of a lack of seasonal workers.
  • Drying out | As India's water crisis worsens, the government is trying to convince the country's most powerful voting bloc to change the crops they plant.
  • Safety strike | McDonald's was accused of firing an employee who led strikes over a lack of critical safety equipment during the coronavirus pandemic, an allegation the chain denies.

On the Bloomberg Terminal

  • Chocolate cravings | Hershey should see sales growth accelerate in 2H, building on momentum at the end of 2Q. North America sales will benefit from elevated at-home consumption, higher prices and replenishment of retailer and distributor inventory, Bloomberg Intelligence says.
  • On the farm | Lukewarm conditions around U.S. farmers continue to suggest mild agricultural-chemical volume growth this year, according to Bloomberg Intelligence.
  • Use the AHOY function to track global commodities trade flows.
  • Click HERE for automated stories about supply chains.
  • See BNEF for BloombergNEF's analysis of clean energy, advanced transport, digital industry, innovative materials, and commodities.
  • Click VRUS on the terminal for news and data on the coronavirus and here for maps and charts.

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