Covid 19 Delta outbreak: when there is a problem in the meat supply chain
With hundreds of isolated supermarket workers and technical issues, supermarket meat aisles were empty last week. Photo / Photo New Zealand
Rod Slater was only 8 years old when he joined the New Zealand meat supply chain.
From his father’s butcher’s shop in Mt Albert, Auckland, he would ride his bike with the packages of meat in the front basket for delivery to customers.
The recently retired CEO of Beef + Lamb New Zealand, 75, remembers his first delivery to a nursing home when he had to run over his bike to stop it and the meat fell off.
At that time, the meat was wrapped in parchment paper and then brown.
“Sometimes the meat would bleed through the brown paper,” Slater explains, recalling another time he was delivering to a house when the family dog felt blood flow through the wrapper. The package got soggy, the meat fell on the doorstep, the dog ate it, and Slater took off.
Times have changed with the supply chain, says Slater, who took over his father’s butcher shop and then co-founded the Mad Butcher chain. For starters, the meat is vacuum packed, so there is no leakage and it lasts longer.
Meat processing for a mass market has become an increasingly sophisticated and high-tech game but remains heavily dependent on workers.
“No robot can butcher a pig or a lamb,” says Slater.
He talks to The Detail about how today’s ‘farm to fork’ meat supply chain works and how the Delta variant has changed that. The lockdown has put pressure on the process again, exacerbated by strict rules prohibiting butchers and other small retailers from operating at Level 4.
This was highlighted last week when a technical issue left the meat aisles in Countdown supermarkets empty. This issue with the Countdown Meat Ordering System on the North Island was fixed, and supermarket meat shelves were quickly restocked.
The Detail approached the two supermarket chains to ask them to explain how their supply chains work, but they said they were too busy. No surprise when hundreds of their workers were forced into self-isolation, leading to store closings and worker shortages.
And that’s where the loopholes in the links are, says Slater, who believes the chain outside of Covid is robust. Other interviewees said Covid has exposed risks throughout the supply chain and essential grocery items should be stored as part of the government’s national stockpiles.
In the case of meat sourcing, the four-step process from farmer to processor, wholesaler and retailer seems straightforward, but industry players describe it as an ‘incredibly complex journey. which includes a certain number of actors ”. They say extended periods of lockdown are starting to shake parts of the chain.
Take the 93 pig farmers across the country who have to remove their animals from the farm every week. When restaurants and butcher shops are closed in level 4 containment, pigs cannot be moved and farms become overcrowded. The government had to step in during last year’s lockdown and buy the surplus pork.
It’s the disrupted single product supply chain. Supermarkets stock 25,000 different items, and each product has a range of components. Huge distribution centers and inventory are key and in times of risk they are put to the test.
Sometimes it’s not the product that runs out, but the packaging. Last year, during the bakery craze, customer-sized bags of flour were emptied from supermarkets. There was a lot of flour but no sacks.
“The current supply chain is not very resilient,” says David Robb, professor of operations and supply chain management at the University of Auckland.
New Zealand has been hit hard by long shipping times for imported goods, but Robb points out that even local and processed products such as meat and dairy need imported ingredients to get them to market.
“We are not self-sufficient, even in our primary industries,” he says.
Plastic packaging, or parts of it, are often imported, the ink on the writing on the packaging is imported, vehicles, their many components, and fuel are imported.
“Most companies have multiple suppliers and these suppliers have multiple suppliers. They don’t know who the suppliers are.”
Distribution centers are crucial, highlighted by last week’s blackout in the meat ordering process at the center of the countdown in South Auckland that has led to empty shelves.
In Rod Slater’s early days as a butcher, there was no distribution center.
In most cases, the animal went from the farm to the cattle sale where it was auctioned off to butchers and trucked to the slaughterhouse. Every Auckland butcher had a hook number, Slater says. He was 31 years old and he owned all the animals on this hook.
These days, very few animals go through the sale of stocks. The farmer often has a contract to supply the meat companies that own the slaughterhouses.
“They might say, we’re looking for 500 heads, what have you got,” Slater says.
They are transported by truck to the slaughterhouse and divided into “primals” or boxes of rump steak, topsides, sirloin. From there, the meat business can sell to the wholesaler who then sells to the retailer.
But the two supermarket chains operate differently.
The Countdown Group, owned by Woolworths, has its own storage agents who source beef and lamb from farmers. Slaughterhouses outsource slaughter for supermarkets before the meat is sent to Countdown’s centralized cutting and packing plant.
Its rival, Foodstuffs, the cooperative that owns the Pak’n’Save and New World chains, sources its meat from several suppliers, such as Affco and ANZCO.
Robb says the fulfillment center has made groceries cheaper because it allows retailers to keep stocks low, but there is still a risk that it could be removed by a strike, tornado, or Covid.
In the case of food products, one distribution center serves stores on the North Island and another serves the South Island, with a perishables center at Auckland Airport. Countdown has a national distribution center in South Auckland.
Most groceries go through distribution centers, but high volume items like dairy, Coke, and bread go direct to the store through the supplier.
Despite the double handling created by a distribution center, Robb says this allows economies of scale and means stores can be replenished daily by trucks of product.
Stocks vary from a few weeks to several months depending on whether a product is perishable or canned. New Zealand supermarkets are keeping stocks low to keep costs down.
“There’s not a lot of redundancy,” says Robb. “We like to do things inexpensively in New Zealand.”
Robb’s colleague at the University of Auckland, Tava Olsen, who also teaches supply chain management, says the IT glitch at the Countdown data center shows weakness.
When a processing center is so large, a failure has a major impact.
“Supply chains are designed to be profitable. It doesn’t take much increase in demand to empty the supply chain, ”says Olsen.
She says the lean, just in time, profitable model is on display at times like this.
“We tried to teach the downsides of just in time and lean. Now more people are listening to us.”
Olsen wants the government to carefully consider national resilience, including the storage of some food items, as well as stocks of drugs and fuel, as part of its national reserves.
“If our borders were closed for goods as well as people, what would we be short of? she asks.
“We can’t let the market take care of this entirely. For-profit companies are not charities. It’s not their job to make sure New Zealand is set up for disaster. . “
Robb goes one step further and suggests that if a new Kiwi grocery chain is set up to compete with Foodstuffs and Woolworths, it might be required to “have resilience of last resort.”
The question is, which grocery items are essential? Coffee? Chocolate?
“When people are in distress, they need comfort food,” says Robb.