Impact of Food Packaging Supply Chain Disruptions Due to SARS-CoV-2 Pandemic on Small Michigan Food Manufacturers
Susan Teegardin
Food Field Scientist -
Michigan Department of Agriculture and Rural Development
Abstract
Supply chain disruptions have been a common occurrence during the SARS-CoV-2 pandemic. Packaging materials that contact food must be made of food-grade materials. Food packaging material fraud has occurred in the past, usually driven by cost and/or availability of food-grade materials. Research on food supply chain disruptions has been conducted however, there has been very little research on supply chain disruptions of food packaging materials (Montenegro & Young, 2020; Spink, personal communication, June 8, 2022). This study explored how food packaging material supply chain disruptions affected small food manufacturers (<$25,000 annual sales/year) in the state of Michigan. A survey was sent to small Michigan food manufacturers asking them how they were affected, what strategies they used to mitigate these challenges, and how they evaluated new packaging materials for safety. Survey respondents cited out-of-stock food packaging and/or long wait times for backordered products and increased cost as primary effects. Many had to utilize new suppliers, switch to a different packaging type, and/or stop or slow, production because of supply chain disruptions. Small Michigan food manufacturers primarily used supplier guarantees and product specifications to verify the safety of food packaging material, but some did not do any verification. Small Michigan food manufacturers lost profit and time because of these supply chain disruptions. More research is needed to determine the impact food packaging material supply chain disruptions had on a broader scale as well as the likelihood of fraud. Increased education and training for the industry on how to evaluate food packaging material safety also may be necessary.
Keywords: food packaging, food packaging material, supply chain, SARS-CoV-2 pandemic, small food manufacturers
Impact of Food Packaging Supply Chain Disruptions Due to SARS-CoV-2 Pandemic on Small Michigan Food Manufacturers
Background
The SARS-CoV-2 pandemic created challenges across many supply chains including those that directly affected food manufacturers. Food manufacturers in Michigan expressed difficulty obtaining some or all components of food packaging materials during inspections conducted by Michigan Department of Agriculture and Rural Development (MDARD) food inspectors throughout the pandemic. Some manufacturers stated they had to switch to different packaging suppliers to obtain what they needed. Researcher and supply chain and food fraud subject matter expert Dr. John Spink of Michigan State University, he stated that food packaging material supply chain impacts due to the SARS-CoV-2 pandemic had not yet been evaluated (Spink, personal communication, June 8, 2022).
Food packaging material fraud was documented prior to the SARS-CoV-2 pandemic (Koelsch-Sand, 2016; Spink & Moyer, 2011). When food packaging components become difficult or more costly to obtain, substituting different components to produce the packaging material becomes a higher probability (Koelsch-Sand, 2016). If a supplier knowingly or unknowingly changed a packaging component in order to continue producing their food packaging, that component change could render the packaging unsafe for food contact—depend on what the component change was. There is well-documented evidence of components of packaging materials leaching into foods (Arvanitoyannis & Bosnea, 2004; Cruz, Rico, & Vieira, 2019). Packaging materials that come into direct contact with a food product are required to be made of a food-safe material per 21 CFR 117 Current Good Manufacturing Practices (U.S. Food and Drug Administration, 2018).
The goal of this study was to determine how small food manufacturers in Michigan were affected by packaging supply chain issues, how they handled that challenge, and how they evaluated new food packaging materials for safety during a difficult and unprecedented time in history. Small (<$25,000 sales/year) food manufacturers were the focus of this study because they tend to have more limited options for alternative food packaging material suppliers and are unable to purchase large quantities of food packaging materials at one time.
Problem Statement
The impact supply chain disruptions had on small Michigan food manufacturers being able to obtain food-safe packaging during the SARS-CoV-2 pandemic has not been evaluated.
Research Questions
How have small food manufacturers in Michigan been affected by food packaging material supply chain disruptions during the SARS-CoV-2 pandemic?
What strategies did small food manufacturers in Michigan employ to overcome food packaging material supply chain disruption challenges during the SARS-CoV-2 pandemic?
If small food manufacturers in Michigan had to utilize a new supplier, how did they evaluate the safety of food-contact packaging materials from the new suppliers?
What strategies can be employed to help mitigate food packaging material supply chain disruptions in the future?
Methodology
As of Feb. 9, 2023, there were 886 food manufacturers in the state of Michigan that held an active Limited Wholesale Food Processor or FLP license type (MDARD, 2023). A FLP license type is characterized as: a wholesale food processor (an operation that processes, manufactures, packages, or labels food for wholesaling) that has $25,000 or less in annual gross wholesale sales made, or business done in wholesale sales in the preceding licensing year, or $25,000 or less of the food is reasonably anticipated to be sold for the current licensing year (MDARD, 2022). For the purposes of this study, food manufacturers holding an FLP license in the state of Michigan were considered the sample population for small food manufacturers.
MDARD maintains an electronic database of all license applications and licenses issued by MDARD. This database allows firms to input an email to apply for a license, renewing their current license, or any time they need to update their contact information. A link to the research survey was sent to all currently licensed FLP licensed using the emails in this database; 713 emails were successfully delivered.
Participants were asked qualifying questions to ensure they fit the parameters of the research study and those that continued with the survey were asked questions regarding if/how they were affected by a packaging supply chain disruption during the SARS-CoV-2 pandemic, how they verified new sources/suppliers, and if anything could be done differently to help prevent disruptions in the future.
A link to the research survey was also sent to the 64 MDARD food inspectors via an internal email listserv. Participants were asked qualifying questions to ensure they fit the parameters of the research study and those that continued with the survey were asked questions regarding if they had been told by their small manufacturing establishments that they had experienced difficulties obtaining food packaging materials during the SARS-CoV-2 pandemic, if their firms needed to utilize new food packaging material suppliers, and how they (inspectors) verified the safety of new packaging materials.
Responses from the small food manufacturers and inspectors was exported into separate Microsoft Excel spreadsheets. Quantitative data included: how many surveyed small food manufacturers and inspectors returned responses; how many small food manufacturers were affected; how many small food manufacturers had to utilize different suppliers; how many small food manufacturers had downtime in production due to lack of food packaging materials and was analyzed using spreadsheet functions. Qualitative data provided insight into how small food manufacturers and inspectors evaluated the safety of new food packaging materials and what strategies could be utilized to help mitigate the impact of a supply chain disruption in the future. This data also was analyzed using spreadsheet functions and the results interpreted.
Results
A total of 86 small Michigan food manufacturers and 14 Michigan Department of Agriculture and Rural Development Food Inspectors returned completed surveys. Ten of the 14 inspectors responded that firms they inspected had experienced difficulty obtaining food packaging during the SARS-CoV-2 pandemic. Five out of those 10 inspectors stated their firms had to utilize different suppliers and four out of those 10 responded that their firms switched to a different packaging type. Two of the five inspectors whose firms had to utilize a different supplier required the firm to provide proof of supplier guarantee, one looked up the packaging type to evaluate the safety of the packaging, one recognized the supplier as reputable or the packaging type as a food-safe material, and one inspector responded that they did not verify if the packaging from a new supplier was food-safe.
Figure 1 summarizes how small Michigan food manufacturer survey respondents have been affected by food packaging material supply chain disruptions during the SARS-CoV-2 pandemic. The most common issue was shortages or backordered food packaging materials. Long wait or lead times on food packaging materials and higher cost were the second and third most common issues noted by small Michigan food manufacturers dur to food packaging material supply chain disruptions during the pandemic.
Figure 1
Effect Food Packaging Material Supply Chain Disruptions Had on Manufacturers
Figure 2 summarizes the strategies small Michigan food manufacturers used to mitigate food packaging material supply chain disruptions. These strategies included utilizing new food packaging material supplier(s), increasing the number of suppliers they sourced their food packaging material from, stopping production until food packaging material could be obtained, discontinuing certain products due to lack of food packaging availability, or switching to a different packaging type (i.e. from glass jars to plastic bottles) or size (i.e.. bulk packaging until smaller retail-ready packages became available) for their products.
Figure 2
Strategies Manufacturers Used to Mitigate Food Packaging Supply Chain Disruptions
As shown in Figure 2, 41% (35 of the 86 survey respondents) stated they had to utilize a new supplier to obtain food packaging material. Figure 3 summarizes the strategies those 35 small Michigan food manufacturers used to evaluate whether the packaging material obtained from the new supplier was food safe. Twenty-eight percent of survey respondents evaluated packaging material specifications to ensure “food-safe” or “FDA approved” were present in the description and 23% relied on a supplier guarantee, including but not limited to Letters of Guarantee or verbal verification from the supplier. Fifteen percent of survey respondents used well-known and/or food grade-only packaging suppliers, 19% utilized the same food packaging material sourced from a different supplier, 11% of the respondents did not evaluate food packaging material safety or were unsure if they had. The remaining four percent stated they either conducted testing of food packaging material (one survey respondent) or left a vague response.
Figure 3
How Did Manufacturers Verify Packaging Material from New Suppliers was Food-Safe?
Two of the MDARD food inspectors and 17 small Michigan food manufacturer survey respondents provided potential solutions for mitigation of food packaging material supply chain disruptions in the future. MDARD food inspector responses included firms maintaining a list of multiple pre-vetted suppliers and producing more food packaging material domestically. Small Michigan food manufacturer responses included increasing shipping and delivery capabilities, having more capital to have more food packaging material stock on hand, producing more food packaging material domestically and sourcing more locally, and limiting the amount of food packaging materials that could be bought by any one entity at a time to prevent hoarding.
Conclusions
Food packaging material supply chain disruptions during the SARS-CoV-2 pandemic have caused small Michigan food manufacturers a loss of time and money. Small Michigan manufacturers had to utilize multiple strategies to overcome supply chain disruptions which included using new suppliers, increasing the number of suppliers they sourced from, switching to a different packaging type or size, and/or slowing or stopping production until food packaging materials became available again.
Most survey respondents from both inspector and small food manufacturer survey groups replied with what are considered appropriate methods of determining food packaging material safety which included obtaining a supplier guarantee or verification, evaluating product specifications to ensure they met food-contact requirements, and/or obtaining food packaging materials from well-known reputable suppliers. However, there were approximately 10% of respondents from both groups who did not verify or were unsure how to verify food packaging material safety indicating there may be gaps in inspector training and industry education.
Most survey respondents from both inspector and small food manufacturer survey groups didn’t think anything different could be done to help mitigate supply chain issues in the future. The most prevalent suggestion from those who did respond was to increase domestic production so companies could source more packaging material locally. Other strategies included having a list of pre-vetted suppliers, increasing shipping and delivery capabilities to get packaging materials to companies more quickly, increasing packaging material stock on hand instead of limiting it to “just-in-time” amounts, and limiting amounts of material that companies could purchase at any given time to limit hoarding.
Recommendations
Based on the data collected and conclusions drawn, the following recommendations are suggested.
More research is needed to evaluate food packaging material supply chain disruptions on a national and global scale to understand its impact and hopefully develop solutions for mitigation of supply chain issues in the future.
Research also is needed to evaluate how prevalent food packaging material fraud has been during the SARS-CoV-2 pandemic, as well as which materials (if any) were most likely to be fraudulent. This research is needed to evaluate both the likelihood of food packaging material fraud in order to protect food safety, and to develop solutions to help mitigate its effects on the food supply and businesses.
Inspectors should also be asking more detailed questions about where a company has obtained their food packaging materials and evaluating the packaging material for safety during their inspections to protect public health. This is especially important when supply chain disruptions cause manufacturers to have to source food packaging from new suppliers and/or use a new type of food packaging.
Additional education and training in evaluating food packaging for safety, as well as food fraud and food defense, for inspectors and manufacturers may be needed.
Acknowledgements
I would like to thank all the survey participants, both from industry and my colleagues in the Food and Dairy Division of the Michigan Department of Agriculture and Rural Development. Without their participation this research would not have been possible. I would like to thank Dr. John Spink, Assistant Professor in the Department of Supply Chain Management in the Eli Broad Business College at Michigan State University, for his invaluable expertise and assistance with forming survey questions. I would like to thank all my IFPTI Fellowship XI Cohorts, my IFPTI mentor Kathy Fedder, and all the IFPTI staff. All of you made this experience remarkably memorable. Lastly, but certainly not least, I would like to thank my Supervisors Ms. Karla Horne (IFPTI Fellowship Cohort II) and Mr. Kevin Halfmann for encouraging me to participate in the Fellowship and supporting me throughout the process.
References
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Cruz, R.M.S., Rico, B.P.M., Vieira, M.C. (2019). 9 - Food packaging and migration. In Charis M. Galanakis, Food Quality and Shelf Life (pp. 281-301). Academic Press, https://doi.org/10.1016/B978-0-12-817190-5.00009-4
Food and Drug Administration. (2018) 117.80(a)(2) processes and controls. In Title 21 CFR 117 current good manufacturing practice, hazard analysis, and risk-based preventative controls for human food. Revised April 1, 2018, (pp. 41)
Koelsch-Sand, C. (2016). Strategies to halt package fraud. Food Technology Magazine, 70(1). https://www.ift.org/news-and-publications/food-technology-magazine/issues/2016/january/columns/packaging-strategies-to-halt-package-fraud
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Spink, J. and Moyer, D.C. (2011). Defining the public health threat of food fraud. Journal of Food Science, 76(9), pp. R157-R163. https://doi.org/10.1111/j.1750-3841.2011.02417.x
Author Note
Susan Teegardin, Food Field Scientist
Michigan Department of Agriculture and Rural Development Food and Dairy Division
This research was conducted as part of the International Food Protection Training Institute’s Fellowship in Food Protection, Cohort XI.
Correspondence concerning this article should be addressed to:
Susan Teegardin,
Michigan Department of Agriculture and Rural Development Food and Dairy Division,
PO Box 30017, Lansing, MI 48933
Funding for the IFPTI Fellowship in Food Protection Program was made possible by the Association of Food and Drug Officials.