DV Journal

While the baby formula shortage that led to parental panic is no longer on the front page, families and health care providers acknowledge the supply chain is still shaky.

“Baby formula shortages continue to impact families with young children throughout Chester County,” a Chester County Health Department spokesperson said.

The shortage began in February as supply chain pressures collided with a large manufacturer recall, then turned into a crisis, critics say, due to the mismanagement of the Food and Drug Administration.

Rep. Brian Fitzpatrick (R-Bucks) is a co-sponsor of the Babies Need More Formula Now Act, which “requires more oversight and accountability at the Food and Drug Administration (FDA) to ensure the Biden administration is doing its job, acting quickly to maintain a healthy and safe supply of formula, and not wasting resources,” according to a statement from the sponsors.

Desperate parents hunted for the limited supply of formula through summer. Information Resources Inc. said just months ago 20 percent of baby formula products were still out of stock.

At local pharmacies and retail stores in the Delaware Valley, shelves are not completely empty, but their stocks are minimal and still distant from the usual supply.

However, Chester County officials are hopeful the painful days could soon be coming to an end. Abbott Nutrition announced late last month it would begin producing Similac formula again. It’s expected to be available in stores by October.

Janet Panning, a supervisor at the Office of Public Health in the Montgomery County Department of Health and Human Services, said shortages have not disappeared in the county yet either.

“Our local stores are reporting they have ‘only a trickle’ at this time,” she said. But Abbott’s announcement makes the department more hopeful this will change soon. “We are anticipating that the supply of formula will increase in the next six weeks.”

Some area hospitals experienced trouble at the height of the shortage, too. Delaware Valley Journal talked to one in May that said it was complicating discharge plans for families who use formulas.

A spokesperson for Main Line Health said its hospitals are not experiencing a shortage and were never truly affected by the issue. It is a hopeful sign as hospitals recovering may mean relief for consumers soon.

And that improvement has already begun. Datasembly reported last month that 25 percent more products were available than in May. But until Abbott’s newly reproduced formula starts hitting shelves again, normal supply levels will struggle to be hit.

Panning said residents should visit a resource page created by the Pennsylvania Chapter of the American Academy of Pediatrics for consistent updates, information, and guidance related to the shortage.

In Chester County, a spokesperson said it remains concerned for infants with nutrition risks during the persistent shortage. The spokesperson praised the work of the county’s health department’s Women, Infants and Children program which has provided supplemental food and formula to infants in need.

“The WIC Program has offered accommodations to allow families to purchase a variety of different store brand formula/non-contracted WIC formula with their eWIC card,” the spokesperson said. “Providing a variety of formula choices to our participating families increases their chances of finding a substitute formula in-store.”

The spokesperson encouraged families, both participants in the WIC program and those not, to remain in contact with Chester’s WIC if they have trouble finding formulas. Though the hope is with more supply on the way this contact won’t be necessary by next month.

Please follow DVJournal on social media: Twitter@DVJournal or Facebook.com/DelawareValleyJournal

From supply chain bottlenecks and labor shortages to increased costs for raw materials, there are price hikes at nearly every step of the food supply chain. On top of that, inflation has caused the price of all consumer goods to increase, from food to gasoline to clothing. This environment has the potential to accelerate competition in the food delivery market as companies try and position themselves as fast and affordable during these challenging financial times.

With the U.S. food delivery market predicted to grow to $43 billion by 2025, the battle for market share is already fierce. The key leaders in the meal delivery space are DoorDash (58 percent), Instacart (8 percent), Uber Eats (8 percent), and Grubhub (2 percent). They’re also joined by a growing number of convenience stores and grocers. And then there are the disruptors, companies hoping to take a slice of the pie by offering something else—ultrafast delivery speeds.

Consumer expectations shifted drastically during the pandemic. Instead of going to restaurants or shopping in grocery stores, consumers turned to online delivery services to bring food and groceries to their homes faster than ever before. Even as restrictions and lockdowns eased, consumers were still willing to pay for the convenience of having whatever they needed delivered on-demand.

Pandemic or no pandemic convenience has always been key, but consumers have completely redefined what convenience means. They now want their items delivered faster—in 15 minutes or less. Ultrafast delivery is a hard enough promise to keep. Given our inflationary times, the real challenge will be delivering at a price point that satisfies consumers. Several companies like Gopuff are taking on this challenge.

Since Gopuff relies on a network of local warehouses to fulfill deliveries, its orders can be completed in as little as 10 minutes. Gopuff isn’t alone in the instant delivery market, but it is way ahead of its competitors, holding 70-75 percent of the first-party U.S. convenience market. The Philadelphia-born company saw sales jump 53 percent in 2021 after a 173 percent surge in 2020, according to a Yipit report. Other established companies like GrubHub and DoorDash are now starting to get into the instant delivery market, but Gopuff has a head start.

It’s been suggested that companies promising ultrafast delivery are biting off more than they can chew in a competitive industry with tight profit margins. Skepticism aside, it stands to reason that there is money to be made. The quick commerce industry was valued at about $25 billion in 2021 and is forecast to expand to $72 billion by 2025. Since 2020, investors have pumped more than $14 billion into the industry.

Gopuffs’ business model stands out in the delivery space. Others rely heavily on third-party vendors to fulfill orders, which can be unreliable and take a large bite out of profits. Gopuff, on the other hand, has built a vertically integrated network of almost 600 micro-fulfillment centers (up from 380 in 2020) it uses to fulfill orders. Those centers store packaged food and household items that customers order on the Gopuff app. Some locations also have “Gopuff Kitchens” that offer prepared meals like pizza or milkshakes.

Those micro-fulfillment centers centralize demand to a single location, enabling Gopuff to leverage industry-leading routing and batching software, provide exceptional customer experience, and allow Gopuff’s delivery partners to return to the same, familiar, location. By owning the inventory and managing the entire experience, Gopuff can take orders 24/7 without having to rely on the same surge prices we see with other delivery services.

The current economic climate will put the delivery market overall under incredible pressure. With prices for food, household items, and gas as high as they are, companies will inevitably have to pass on some of those increased costs to consumers. If they seek the route of increasing prices and delivery surcharges, consumers are likely to turn to other cheaper competitors.

That is where Gopuff has a competitive advantage. Gopuff will be able to keep delivery costs relatively low since its micro-fulfillment centers operate within the neighborhoods of the customers they deliver to. Customers won’t be surprised by added charges on their bills since their delivery rates are fixed.

The company is also developing private-label goods, a cost-effective alternative to buying from third-party sellers that stands to benefit its customers, too. These clear, calculated business moves give Gopuff a real shot at winning the race in the ultrafast delivery space even amid our current economic climate.

China is the principal challenge to U.S. economic and political leadership in the world. With activities such as the Belt and Road Initiative, China is continuing to expand its influence economically and militarily with an eye on replacing U.S. leadership and Western democratic values with its own brand of statism. The challenge is seen in Beijing’s IP theft, culpability in the COVID-19 pandemic, aggressive behavior in Asia, disregard for human rights, and predatory economic practices.

Bringing China into the world economic and political order was done with the best of intentions across multiple U.S. administrations, both Democratic and Republican. The idea was that their increased participation in the global marketplace would bring China into the mainstream and drive internal reforms benefiting everyone. This has not happened. Instead, it has produced a military and economic juggernaut with little interest in maintaining the values we cherish.

The hope was also that globalization would benefit the American public by reducing costs and lifting more people up into the middle class. Cheaper goods would equal more disposable income for the average American, and more money to save.

The reality is that globalization has shipped the very jobs that allow that ascendancy to the middle class to China.

As global business leaders, in their search for higher earnings and larger profit margins, essentially outsourced the world’s supply chain to Beijing, we are left with the problems we see every day, from shortages of key industrial inputs to thinly stocked shelves.

By single threading the global supply chain, we have put China in the driver’s seat of the world’s economy. Even the basest components of items built in other countries are now sourced from China.

By taking away manufacturing jobs from the U.S., we make the population less financially stable, and drive wealth further into the pockets of a foreign adversary and in the US, an elite class.

Additionally, this is an urgent national security situation: With critical telecommunications gear, IP enabled security cameras, mobile phones, and other key components of 21st-century infrastructure manufactured in whole or in part in China, the global community has placed us all at the mercy of the whims of a “frenemy”.

At best, the global supply chain is at risk of the impact of disasters and pandemics on a country where hundreds of millions of people live below the poverty line; at worst, we have wrapped the world economy in dynamite and handed a potential foe the trigger. Imagine if China’s government, which centrally controls all businesses in that country, decided to stop producing cell phones or modems, or the parts that allow those devices to function? The result would be catastrophic for our internet-based economy.

The China challenge requires a strong U.S. response which I will work towards as a member of Congress. This response should include::

1. Greater local investment in key technologies.  Intel’s recent decision to build a state of art chip plant in Ohio is to be commended, and replicated across industries.
2. Tax incentives to encourage more manufacturing, R&D, and investment in worker training. Incidentally, the Delaware Valley is well-positioned to take advantage of this increased investment, with proximities to major arteries, abundant locations for factories and workplaces, and a diverse population.
3.  Aggressive enforcement of IP laws and sanctions against nations that persist in the theft of Intellectual Property, to protect and encourage the innovation that will power the economy of the future.
4. Increased investment in STEM education, educational choice, gifted programs, and skilled labor development. As a former School Board President, I am acutely aware of the challenges that public education faces, especially after the COVID-fueled “lost year(s)” that many children faced. In order to remain competitive on the global stage, education must be an urgent priority.

Mao Zedong said, “Communism is a hammer which we use to crush the enemy,” The United States can no longer allow itself to be a nail. Strong, clear-eyed leadership is required to address the China challenge.

Follow us on social media: Twitter: @DV_Journal or Facebook.com/DelawareValleyJournal

Delaware Valley consumers are encountering empty shelves and a shortage of products, a situation that is frustrating retailers and customers alike.

“That store is remodeling for Build Back Better,” joked Anita Edgarian of West Chester on Facebook. “When are we going to get our ration books? We’re not even in a war and the shelves are empty.”

She is not alone. A poll of swing-state voters found about 7 in 10 respondents have experienced shortages at grocery stores.

The question is why?

Giant Food Stores LLC, based in Carlisle, Pa. operates 190 stores in Pennsylvania, Maryland, Virginia, and West Virginia. On visits to two Eastern Montgomery County Giant locations in recent weeks, some shelves were sparse while others were entirely bare.

Ashley Flower is Giant’s manager of public relations.

“Our supplier and manufacturing partners have advised us of supply, production, and or sourcing challenges they are facing,” she said, “which impacts what is available in our stores (and others) for purchase. Historic demand and a stretched supply chain have contributed to limited product availability in certain cases.

“Many other factors like ongoing labor shortages, limited availability of raw ingredients, freight and packaging constraints, and unpredictable weather events are beyond our control. It’s a fluid situation and one we are monitoring closely. We continue to remain in close contact with our suppliers and are working to bring in alternate products, but it is possible customers may find a particular brand or variety is unavailable due to these challenges,” she said.

The National Grocers Association (NGA) serves more than 1,500 retail and wholesale grocers nationwide.

“Product availability and price inflation are being driven by a perfect storm of factors,” said NGA director of communications Jim Dudlicek, “That includes an ongoing shortage of labor across the entire supply chain, an acute shortage of truck drivers, increased ingredient inputs, and occasional disruptions in product packaging production. Weather emergencies also have been a factor in some parts of the country.”

A sizable percentage of products, including grocery items, are shipped by truck. According to the American Trucking Association, trucks moved 10.23 billion tons of freight in 2020, generating $ 732.3 billion in revenue. That accounts for better than 72 percent of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods.

But the trucking industry was dealing with its own issues well before the pandemic, specifically, a shortage of drivers. And that shortage was exacerbated by the Biden administration’s mandate that employees of large companies (100 workers or more) be vaccinated or else wear masks and be regularly tested for COVID.

That mandate was recently struck down by the U.S. Supreme Court. However, Dudlicek believes the supply chain issues will remain, at least for the short term.

“While there is plenty of food in the supply chain, we anticipate consumers will continue to experience sporadic disruptions in certain product categories as we have seen over the past year and a half due to the ongoing supply and labor challenges,” he said.

“The prevalence of the omicron variant in both vaccinated and unvaccinated populations, coupled with the lack of available testing resources, has further contributed to current staffing challenges. While our members continue to encourage employees to get vaccinated, NGA has requested prioritization of testing supplies from both federal and state government, alongside flexibility from onerous mandates so that our ‘Supermarket Superheroes’ can continue to work and communities across the country are not impacted by significant workforce disruptions,” he said.

However, another wrinkle in the trucking situation is vaccine requirements for truckers who cross the border into Canada or drive from Canada into the U.S., which may also generate shortages issues in the near future.

Follow us on social media: Twitter: @DV_Journal or Facebook.com/DelawareValleyJournal

Consumers preparing to enter the frenzied holiday shopping environment should bring an ample supply of patience with them, whether they’re shopping online or in-person, or whether they’re searching for that ideal gift or looking to secure ingredients for their family’s traditional holiday meal.

Supply chains stressed to or beyond their limits have led to retailers with depleted shelves barren of merchandise while online retailers struggle to get their products to customers. What strategies can shoppers use to cope with the present circumstances?

Brad Wilson resides in Drexel Hill. He orders his groceries online and points out that availability tends to run in cycles.

“I’ve noticed things seem to come in waves so to speak,” he said. “There’s a certain tea I like to buy. And, it’s not stocked, it’s not stocked, it’s not stocked. And then it is in stock. (Items) are not impossible to get, but then for two or three weeks you can’t get them, and then they’re back. I have not been able to buy something I want, that has not been a problem. But, over a period of time, you notice things aren’t available, and then they are.”

When it comes to the holidays Wilson says consumers may need to spend additional time in search mode.

“I think you might be able to find what you want. But you’re going to have to look in more different places,” he said. “I also think for holiday groceries and things, where you’re talking about turkeys, or beef roasts, the big items people like to cook on the holidays, I think that could be a problem. I think people who wait until the last minute and don’t plan properly could really have a problem. I think if you start planning and are prepared to jump two or three more hurdles than you normally have, I think you’ll be okay.”

Consumers may have a long wait if they’ve ordered a big-ticket item, such as a home computer.

When reached by phone, an Apple sales representative anticipated a wait of 22 days from the date an item was purchased online to the date of delivery, although she indicated that estimate changes daily and varies depending on the time the item is purchased.

David Galluch, a Newtown Square resident who is running for Congress in Delaware County,  holds an economics degree from the Naval Academy. He says the current crisis is fueling inflation.

“In the midst of a supply chain crisis you have too much money chasing too few goods,” he said. “That’s one of the primary impetuses behind inflation.”

Galluch doubts supply-chain issues are going away any time soon.

“The supply crisis is so deep,” he said, “And it’s going to take significant amounts of time for supply to catch up with demand and for productivity-enhancing investments and infrastructure investments to expand. I think this is probably here to stay for at least a year, if not more.”

With that in mind, Galluch says it’s safe to assume inflation isn’t going away either.

“I think, unfortunately, you have to make the assumption, for your own financial well-being, that inflation is not a transitory thing,” he said.

Which leaves shoppers with the challenge of navigating an arduous path as the holidays approach. Harleysville resident Kevin Hunter is making it a point to get his shopping done as early as possible. He makes his holiday purchases online

“I’ll probably try to get everything early and give (retailers) plenty of time,” he said. “Probably hoping by the end of November at the latest I have everything ordered.”

Follow us on social media: Twitter: @DV_Journal or Facebook.com/DelawareValleyJournal