Dairy manufacturers need to focus on several areas to set the right course.
The COVID-19 pandemic devastated businesses in every industry worldwide. Dairy operations were hit especially hard, as the industry had to navigate negative effects on business operations, logistics and an abrupt change in demand.
Restaurants shut down or limited services to takeout and/or delivery only. Schools changed to online learning and stopped buying milk, which created a huge demand shift.
Some dairy manufacturers were forced to decide whether to try to stay open or to close their operations. COVID-19 didn’t eliminate the need for dairy products, but it severely disrupted dairy supply chain operations. In response, most dairy businesses struggled.
Manufacturers had to go back to relearn the basics. They were somewhat unprepared from an operational, process and supply chain perspective.
To meet these changing market demands and prevent further product waste, dairy producers needed to quickly ramp up production for the retail market.
The pandemic brought inefficiencies to light
Leading up to the pandemic, most dairy executives and leaders were focused on things such as technology and innovation to drive profitability. Then COVID-19 came along. It’s worth noting that, while unexpected, the pandemic didn’t necessarily create new issues for dairy businesses. Instead, it substantially magnified existing problems faced by the industry.
Dairy businesses have experienced ebbs and flows in demand and shifts due to the changing industry environment. Mechanical outages, labor shortages and other challenges have also taken a toll on dairy businesses in the past. However, these challenges had never occurred simultaneously like they did at the start of the pandemic.
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