Canadian food supply chain suffering combat fatigue

Independent grocers are vital to smaller communities and rural areas.Ottawa—Canada's food supply chain is suffering from combat fatigue after two years of pandemic, border blockades and the Russian invasion of the Ukraine, says Gary Sands, senior vice-president of the Canadian Federation of Independent Grocers.As well, it has had to cope with the catastrophic flooding in BC that disrupted transportation corridors and the arrival of the Omicron variant that ripped through the supply chain causing widespread labour shortages, he told the Commons agriculture committee.Then there were the blockades at critical border crossings, which caused more supply chain disruption, delays and higher costs.For the independent grocery stores across the country, which are often the only food supplier in small towns and rural areas, the cumulative impact of these events on the entire supply chain “are not always borne entirely equally. We know that many of our members are seeing cost increases from suppliers in the range of 25 to 30 per cent. They are seeing trucking costs more than double, and fuel surcharges have gone through the roof.”Independent grocers need access to a fair supply of product at affordable prices because when faced with significant increases in costs, they have no alternative but to pass them onto the consumer.He said a recent study for Beef Farmers of Ontario found that while the price of beef has risen significantly, “the source of those increases is getting lost somewhere between gate to plate. While farmers' share of profits fell from 41 per cent in 2016 to 39 per cent in 2021, grocers and butcher shops fared worst of all earning an eight per cent share of the profit margin in 2016, to just over two percent in 2021.”Grocery stores are “sometimes on the firing line with the customer,” he said. “The resistance to increasing prices by grocery stores is commendable, but for small and medium-sized independent grocers, it's simply not sustainable.“Based on the shared experiences of the last two years, governments and industry recognize that they need to work collaboratively together to develop long-term solutions to systemic issues and vulnerabilities that have become very apparent in our supply chain.”There are approximately 6,900 independent grocery stores in Canada, and in some provinces including Ontario, independents actually account for the majority of grocery stores.As for the labour shortages bedeviling the trucking industry, Sands said the issues that come up a lot in conversations between grocers and trucking lines “are the very high costs of insurance and also training programs.”