In our monthly “SKU View” series, Food Entrepreneur is tapping the expertise of mentors at SKU, a consumer products accelerator based in Austin, to deliver timely insights on issues that affect early-stage food and beverage brands.
AUSTIN, TEXAS — The pandemic has precipitated supply chain challenges for companies across the food and beverage industry. Ben Greene, founder of Strive Logistics and Greene Capital Partners and SKU mentor, weighed in on how early-stage brands may navigate the crisis.
Food Entrepreneur: How are recent supply chain challenges affecting emerging food and beverage brands?
Ben Greene: Port congestion, raw material shortages (resin, pulp, etc,) required to manufacture certain consumer products are impacting the available supply to the consumer. Insufficiency of supply chain workforce labor resulting from COVID and voluntary elections to cease employment causing a war for talent.
There is currently a large demand for trucking capacity in the market that is driving up the cost of transportation dramatically (the demand outweighs the supply). This is causing both increased costs and on time service challenges to the customer and ultimately product supply shortages for the consumer.
What are some short-term strategies to help startup and small brand founders adapt in the current environment?
Mr. Greene: Seek consortium arrangements to leverage scale. Outsource warehouse, distribution, transportation.
Depending on the suppliers you work with you might be able to leverage their network to buy capacity at a cheaper rate.
What are some longer-term strategies to help founders become more resilient in the face of continued or future disruption?
Mr. Greene: Most entrepreneurs/early-stage companies do not have a focus or expertise when it comes to managing their supply chain. Vetting out the “value add” resources for strategic partners could help overcome potential supply chain challenges.Example: It might cost more to use fulfillment company “A” over “B” for the pick/pack/labor costs, but A has a supply chain network that can be leveraged in your partnership that would end up saving you more. The partnerships need to be looked at holistically; don’t compartmentalize.