Thanksgiving 2021 is already here and consumers are flocking to the stores to get last minute items.
Yet given surging prices and the supply crisis that’s resulted in shipping bottlenecks, will there be anything left? According to experts, the answer is — there should be.
“Consumers are are not really panic buying, but they’re buying in anticipation of not having it,” Pedro M. Reyes, associate professor of business at Baylor University, told Yahoo Finance.
In many U.S. grocery stores, consumers are beginning to see limited supply of fan favorites for this time of year like cranberries, pumpkin, sweet potatoes and other perishable items, Reyes stated. But turkeys — the main star of the Thanksgiving meal —will not run out.
“Quite frankly, turkeys are processed year round and the frozen turkeys have already been stockpiling since probably July,” Reyes explained. “That’s why we won’t see a shortage, we’ll just see a limited supply because it has to be moved from one place to another place.”
In a recent interview with Yahoo Finance, Butterball CEO sent the same message to consumers.
“We don’t expect a shortage of turkeys. We do expect there will be some differences in the sizes that the customer is going to find. The smaller turkeys will be a little bit tougher to come by,” according to Jay Jandrain, Butterball CEO and president.
But if consumers haven’t bought a turkey just yet, Reyes argued you’ll likely pay “quite a bit more money for it” now.
Buy what you need, but not more than that
According to LendingTree analysis of US Department of Agriculture data, a whole fresh turkey will be 6.2% more than last year. A frozen hen (a female turkey) will cost 4.8% more than 2020 and a frozen tom (a male turkey) will be 6.0% more, the data showed.
Katie Denis, Vice President for research and communications at Consumer Brands Association (CBA), also says consumers can expect limited supply on certain items.
According to CBA data, out-of-stock rates for perishable goods is currently at 13%, while certain categories, like frozen foods and beverages are a bit higher at 14%. These rates reflect high demand, given the average out-of stock rates is typically 7 to 10%.
“This does not mean products are unavailable, it means there could be spotty outages, where consumers in some locations may see fewer choices,” Denis told Yahoo Finance in an email. She encouraged customers to plan ahead when heading to the store, be flexible and buy what they need — but not more than that.
Denis argued the consumer packaged goods (CPG) supply chain is “adapting” to a new COVID-era normal. According to a recent CBA report, demand for CPGs skyrocketed 21% in March of 2020 and now the demand is still at an all-time high. In the third quarter of 2021, demand for CPG was 8.3% more than the same period the year before, and 1.8% more than the prior quarter.
In March 2020, “shelves were cleared but today stores are relatively well stocked,” Denis said. That “should be a good indicator to consumers that the holiday table won’t be sparse.”
We believe this is because the system is already maxed-out and many food suppliers do not have the labor and surplus inventory they need to meet that type of demand surge.Kerry Byrne
Before consumers even see their favorites on the shelves, delivery operators are struggling to keep up with high demand as well.
Kerry Byrne, president of Cincinnati-based freight brokerage and third party logistics firm Total Quality Logistics, told Yahoo Finance that transportation operators are operating “business as normal” right now, despite a typical surge in demand this time of year.
Byrne says this time of year is always “peak” for transportation, but this year “peak” capacities have been nonstop. “There has been zero break in the action to allow the system to catch-up on backlogs,” he said.
Typically, needed transportation like refrigerated trucks typically see a run-up in demand in early November, then peak the weekend before Thanksgiving. Due to high demand all throughout 2021, that demand is “essentially flat to prior weeks,” he explained.
“We believe this is because the system is already maxed-out and many food suppliers do not have the labor and surplus inventory they need to meet that type of demand surge,” Byrne added. While this is a top concern among producers, consumers and grocers, he stressed “there will be plenty of food around your Thanksgiving table.”
The executive added: “It might not be the size of turkey you prefer but there will be plenty. Items that are perishable and have more time sensitive shipping windows is what you will see shortages of. Non-perishable items are typically moved during the summer to warehouses near where they will be distributed for Thanksgiving, so things like canned goods should be readily available.”
Consumer staples girded for demand
Consumer-facing companies like General Mills (GIS), Ocean Spray and Conagra (CAG) are doing all that they can to make sure consumers will have what they need for the most ideal Thanksgiving meal.
Kelsey Roemhildt, a spokesperson for General Mills, told Yahoo Finance in an email that the company was “committed to ensuring consumers can find their favorite foods this holiday season,” and was focused on “implementing alternative sources across all areas – including suppliers, material substitutions, locations, and geographies.”
Ocean Spray struck a similar theme, telling Yahoo Finance in a statement that “while we do not anticipate significant impacts, consumers may experience some availability issues at times. We do think flexibility across the Thanksgiving table will be needed this year,” citing its fresh, jellied and whole-berry cranberry options.
A spokesperson from Conagra — behind brands like Duncan Hines, PAM Cooking Spray and Bird’s Eyes — told Yahoo Finance consumers may see spotty supply here and there, but they are doing all that they can to prepare for yet another busy holiday season.
“Due to supply chain issues and increased demand, stores may run low on popular items like Marie Callendar’s pies, Reddi-Wip whipped cream, Gardein plant-based meat alternatives and Swiss Miss hot cocoa, but Conagra Brands is ramping up production on these holiday favorites to meet consumers’ needs,” the spokesperson added.
Brooke DiPalma is a reporter and producer for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at [email protected].
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