Supply chain issues, and what it means for the foodtech industry

Supply chain issues, and what it means for the foodtech industry

By
Sam Panzer
September 6, 2021

Feeling the supply chain squeeze

Remember the Great Toilet Paper Shortage of 2020? Maybe that was just the beginning. 🧻

It’s been 18 months of pandemic life, but in many ways, our supply chain pains are just getting started. Now, there’s a perfect storm of a global labor shortage, soaring demand, Brexit, and climate change. Yikes.

It’s scary stuff without an upside, but these shortages and the factors behind them are a major challenge for the foodtech space. So this week, we’re getting into the sexy topic of supply chain disruption, and what it means for founders, funders, and eaters.  

(Today's word count: 1,239 words or a 7-minute read)

📊 By the Numbers: Supply Chain Lowlights

📦 Freight shipping prices are up 351% year-on-year, with no signs of reversal. That’s compounding with the increased cost of shipping containers and pallets (the humble pallet was more in-demand than ever this year, just when lumber prices were spiking). That all means shipping from China to Europe often costs 10x what it did a year ago. Yes, 10x!

🚢 The world’s third-busiest port was closed for 2 weeks in August due to a covid outbreak. That means weeks of backlog for shipments around the globe, likely creating shortages and suppressed economic activity during the holiday season.

🍳 Major food distributors (i.e. Sysco) are reporting more and more late deliveries and failing to get items on shelves and in professional kitchens, with one distributor reporting that nearly 50% of deliveries are arriving late (down from 10% in normal times). 

🐔 One recent sign of trouble: beloved chicken chain Nando’s shutting down restaurants due to a chicken shortage. The piri piri empire went as far as sending its own workers to help their suppliers. But there’s reason to believe that’s just the beginning.

🚚 The entire globe is facing severe labor shortages in key sectors like trucking, warehousing, and food processing. There are 20% fewer truckers than needed in Central Asia and Australia. In the US, there are still fewer truckers than there were pre-pandemic, despite roaring demand. And in the UK, Brexit has contributed to a shortfall of 100,000 truckers.

😡 Booming Market, Angry Workers

Supply chains are worthless without people to keep goods flowing. 

Roaring demand and booming business has put more and more pressure on workers in foodtech & Big Food. For workers, it’s also brought higher pay, sign-on bonuses, and profit-sharing.

Here’s the state-of-play for employers-employee relations in food:

🦍 Gorillas: the tension between the leading egrocery and their delivery workforce continues to rise. This week, the Gorillas Workers Collective will appear before a Berlin labor court in their pursuit of unlimited labor contracts.

🍞 Nabisco / Mondelez: angry at longer shifts, less overtime pay, and fewer benefits, Nabisco workers across the US remain on strike, threatening supplies of Oreo, Ritz, Trident Gum, and more, leading to grocery stores stockpiling snacks. The strike started in Oregon on August 10 and has since expanded to 4 states.

Mondelez employees are on strike at three of the four U.S. bakeries the company owns, including the one in Portland, Ore. PHOTO: Alex Milan Tracy/SIPA USA/Reuters

🚚 Sysco: 125 warehouse workers and 200 delivery drivers walked out on North America’s largest food distributor this week for four days over a union dispute.

🛒 Walmart: seeing which way the wind is blowing, Walmart is raising pay for 565,000 workers, increasing their average pay from $15.25 to $16.40.

🐷 Animal Processing: farming and livestock operations are so stretched for workers, they’re plowing crops under or killing their herds. The UK’s National Pig Association reports that a 15% shortage of butchers could force farmers to kill and burn 100,000 pigs.

🍔 McDonald’s: after multiple viral pictures of “we all quit” signs outside fast food restaurants this summer, big chains like Burger King and McDonald’s are still struggling to hire. Managers are trying $600 sign-on bonuses, hiring 14-year-olds, and raising pay, with fast food wages rising 10% in the last quarter alone.

🤷 FoodTech Impacts?


Fermentation tanks. Plant-based ingredients. Hardware-heavy indoor farms. Many of foodtech’s hottest segments will feel a pinch in the coming months, just as investment and valuations hit record highs.

Here’s how the ongoing supply chain crisis will manifest for foodtech firms:

🌱 Input supplies. Any manufacturing business is feeling the pinch of higher freight costs and a trucker shortage. That means any business dependent on timely deliveries of raw goods (think truckloads of pea protein or just a small box of emulsifiers) is going to feel the pinch. And it’s not just ingredients –– this weekend, Coca-Cola warned that they’re facing an aluminum can shortage.

🛠️ New equipment. Looking to buy a shiny 500L stainless steel vat to scale up your plant-based production? Better start shopping now. We spoke with Fabio Carlucci, co-founder at Berlin’s ROY Kombucha, who talked about their challenges scaling up during the pandemic:

"We sourced our equipment from various suppliers & countries: custom-made tanks & kettles (China), custom-made fermenters & other smaller equipment (Italy), canning line (USA), labelling machine (Germany). All in all, delivery times were around 3-5 months, with several delays from basically all the suppliers. Delays were mainly due to Corona and longer shipping times or scarcity in sourcing raw materials. Prices increased mainly with regards to shipping costs."

🧑‍🏭 Higher personnel costs. With meatpackers luring in new workers with Apple Watches and Amazon paying an extra $70 / week to workers who show up on time, the cost of labor is climbing up and up. 

🤖 Computer chips. These days, everything is a computer. That’s a big problem given a massive computer chip shortage, familiar to anybody trying to buy a Playstation 5 (listed at 449.99, resellers are fetching 800.00 ten months after the console’s release),

We also expect to see more dedicated supply chain leadership in foodtech companies, like INFARM hiring a Global EVP of Supply Chain Management this summer. It’s a critical area for growth that needs C-Suite representation.

🔮 What Comes Next?

Santa Claus is gonna have a rough year, and consumers should be prepared for weak Black Friday offers and inconsistent supply

But beyond an at-risk Q4, we’re concerned about what the supply chain crisis means for innovation in foodtech. 

Food systems innovation is dependent on investment, and investors are looking to maximize the impact of their investment and see a return sooner. But a few months delay scaling up production means a few months delay in investor returns.

Should this slow investor interest in foodtech? Absolutely not. The startups we care most about aren’t selling nice-to-have luxuries, but critical inevitable changes we must make to the food system. Additionally, the supply chain and labor challenges companies are struggling through today only makes investment more critical.

One upside? There are a number of sourcing & supply chain startups looking to improve things, one way or another. Take Berlin’s Choco (restaurant ordering platform), or Denmark’s Responsibly (scoring system for supply chain sustainability and diversity that just raised a $2M pre-seed). 

Another highlight for food producers: Journey Foods, an AI-driven model that factors in nutrition, sustainability, and cost to inform product formulation. We also hope to see more platforms like Membo which make it easier for consumers to shop from local producers, bypassing overseas shipping and messy supply chains altogether.

Know other companies or startups working on supply chains and sourcing? Let us know here and we’ll come back next week with a roundup and database.

It’s a challenging period all around, and we do expect to see some delayed product launches, and yes, rising prices for consumers. With the current state of our supply chains, the only certainty is uncertainty. All aboard the supply chain pain train 🚂

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Feeling the supply chain squeeze

Remember the Great Toilet Paper Shortage of 2020? Maybe that was just the beginning. 🧻

It’s been 18 months of pandemic life, but in many ways, our supply chain pains are just getting started. Now, there’s a perfect storm of a global labor shortage, soaring demand, Brexit, and climate change. Yikes.

It’s scary stuff without an upside, but these shortages and the factors behind them are a major challenge for the foodtech space. So this week, we’re getting into the sexy topic of supply chain disruption, and what it means for founders, funders, and eaters.  

(Today's word count: 1,239 words or a 7-minute read)

📊 By the Numbers: Supply Chain Lowlights

📦 Freight shipping prices are up 351% year-on-year, with no signs of reversal. That’s compounding with the increased cost of shipping containers and pallets (the humble pallet was more in-demand than ever this year, just when lumber prices were spiking). That all means shipping from China to Europe often costs 10x what it did a year ago. Yes, 10x!

🚢 The world’s third-busiest port was closed for 2 weeks in August due to a covid outbreak. That means weeks of backlog for shipments around the globe, likely creating shortages and suppressed economic activity during the holiday season.

🍳 Major food distributors (i.e. Sysco) are reporting more and more late deliveries and failing to get items on shelves and in professional kitchens, with one distributor reporting that nearly 50% of deliveries are arriving late (down from 10% in normal times). 

🐔 One recent sign of trouble: beloved chicken chain Nando’s shutting down restaurants due to a chicken shortage. The piri piri empire went as far as sending its own workers to help their suppliers. But there’s reason to believe that’s just the beginning.

🚚 The entire globe is facing severe labor shortages in key sectors like trucking, warehousing, and food processing. There are 20% fewer truckers than needed in Central Asia and Australia. In the US, there are still fewer truckers than there were pre-pandemic, despite roaring demand. And in the UK, Brexit has contributed to a shortfall of 100,000 truckers.

😡 Booming Market, Angry Workers

Supply chains are worthless without people to keep goods flowing. 

Roaring demand and booming business has put more and more pressure on workers in foodtech & Big Food. For workers, it’s also brought higher pay, sign-on bonuses, and profit-sharing.

Here’s the state-of-play for employers-employee relations in food:

🦍 Gorillas: the tension between the leading egrocery and their delivery workforce continues to rise. This week, the Gorillas Workers Collective will appear before a Berlin labor court in their pursuit of unlimited labor contracts.

🍞 Nabisco / Mondelez: angry at longer shifts, less overtime pay, and fewer benefits, Nabisco workers across the US remain on strike, threatening supplies of Oreo, Ritz, Trident Gum, and more, leading to grocery stores stockpiling snacks. The strike started in Oregon on August 10 and has since expanded to 4 states.

Mondelez employees are on strike at three of the four U.S. bakeries the company owns, including the one in Portland, Ore. PHOTO: Alex Milan Tracy/SIPA USA/Reuters

🚚 Sysco: 125 warehouse workers and 200 delivery drivers walked out on North America’s largest food distributor this week for four days over a union dispute.

🛒 Walmart: seeing which way the wind is blowing, Walmart is raising pay for 565,000 workers, increasing their average pay from $15.25 to $16.40.

🐷 Animal Processing: farming and livestock operations are so stretched for workers, they’re plowing crops under or killing their herds. The UK’s National Pig Association reports that a 15% shortage of butchers could force farmers to kill and burn 100,000 pigs.

🍔 McDonald’s: after multiple viral pictures of “we all quit” signs outside fast food restaurants this summer, big chains like Burger King and McDonald’s are still struggling to hire. Managers are trying $600 sign-on bonuses, hiring 14-year-olds, and raising pay, with fast food wages rising 10% in the last quarter alone.

🤷 FoodTech Impacts?


Fermentation tanks. Plant-based ingredients. Hardware-heavy indoor farms. Many of foodtech’s hottest segments will feel a pinch in the coming months, just as investment and valuations hit record highs.

Here’s how the ongoing supply chain crisis will manifest for foodtech firms:

🌱 Input supplies. Any manufacturing business is feeling the pinch of higher freight costs and a trucker shortage. That means any business dependent on timely deliveries of raw goods (think truckloads of pea protein or just a small box of emulsifiers) is going to feel the pinch. And it’s not just ingredients –– this weekend, Coca-Cola warned that they’re facing an aluminum can shortage.

🛠️ New equipment. Looking to buy a shiny 500L stainless steel vat to scale up your plant-based production? Better start shopping now. We spoke with Fabio Carlucci, co-founder at Berlin’s ROY Kombucha, who talked about their challenges scaling up during the pandemic:

"We sourced our equipment from various suppliers & countries: custom-made tanks & kettles (China), custom-made fermenters & other smaller equipment (Italy), canning line (USA), labelling machine (Germany). All in all, delivery times were around 3-5 months, with several delays from basically all the suppliers. Delays were mainly due to Corona and longer shipping times or scarcity in sourcing raw materials. Prices increased mainly with regards to shipping costs."

🧑‍🏭 Higher personnel costs. With meatpackers luring in new workers with Apple Watches and Amazon paying an extra $70 / week to workers who show up on time, the cost of labor is climbing up and up. 

🤖 Computer chips. These days, everything is a computer. That’s a big problem given a massive computer chip shortage, familiar to anybody trying to buy a Playstation 5 (listed at 449.99, resellers are fetching 800.00 ten months after the console’s release),

We also expect to see more dedicated supply chain leadership in foodtech companies, like INFARM hiring a Global EVP of Supply Chain Management this summer. It’s a critical area for growth that needs C-Suite representation.

🔮 What Comes Next?

Santa Claus is gonna have a rough year, and consumers should be prepared for weak Black Friday offers and inconsistent supply

But beyond an at-risk Q4, we’re concerned about what the supply chain crisis means for innovation in foodtech. 

Food systems innovation is dependent on investment, and investors are looking to maximize the impact of their investment and see a return sooner. But a few months delay scaling up production means a few months delay in investor returns.

Should this slow investor interest in foodtech? Absolutely not. The startups we care most about aren’t selling nice-to-have luxuries, but critical inevitable changes we must make to the food system. Additionally, the supply chain and labor challenges companies are struggling through today only makes investment more critical.

One upside? There are a number of sourcing & supply chain startups looking to improve things, one way or another. Take Berlin’s Choco (restaurant ordering platform), or Denmark’s Responsibly (scoring system for supply chain sustainability and diversity that just raised a $2M pre-seed). 

Another highlight for food producers: Journey Foods, an AI-driven model that factors in nutrition, sustainability, and cost to inform product formulation. We also hope to see more platforms like Membo which make it easier for consumers to shop from local producers, bypassing overseas shipping and messy supply chains altogether.

Know other companies or startups working on supply chains and sourcing? Let us know here and we’ll come back next week with a roundup and database.

It’s a challenging period all around, and we do expect to see some delayed product launches, and yes, rising prices for consumers. With the current state of our supply chains, the only certainty is uncertainty. All aboard the supply chain pain train 🚂

Feeling the supply chain squeeze

Remember the Great Toilet Paper Shortage of 2020? Maybe that was just the beginning. 🧻

It’s been 18 months of pandemic life, but in many ways, our supply chain pains are just getting started. Now, there’s a perfect storm of a global labor shortage, soaring demand, Brexit, and climate change. Yikes.

It’s scary stuff without an upside, but these shortages and the factors behind them are a major challenge for the foodtech space. So this week, we’re getting into the sexy topic of supply chain disruption, and what it means for founders, funders, and eaters.  

(Today's word count: 1,239 words or a 7-minute read)

📊 By the Numbers: Supply Chain Lowlights

📦 Freight shipping prices are up 351% year-on-year, with no signs of reversal. That’s compounding with the increased cost of shipping containers and pallets (the humble pallet was more in-demand than ever this year, just when lumber prices were spiking). That all means shipping from China to Europe often costs 10x what it did a year ago. Yes, 10x!

🚢 The world’s third-busiest port was closed for 2 weeks in August due to a covid outbreak. That means weeks of backlog for shipments around the globe, likely creating shortages and suppressed economic activity during the holiday season.

🍳 Major food distributors (i.e. Sysco) are reporting more and more late deliveries and failing to get items on shelves and in professional kitchens, with one distributor reporting that nearly 50% of deliveries are arriving late (down from 10% in normal times). 

🐔 One recent sign of trouble: beloved chicken chain Nando’s shutting down restaurants due to a chicken shortage. The piri piri empire went as far as sending its own workers to help their suppliers. But there’s reason to believe that’s just the beginning.

🚚 The entire globe is facing severe labor shortages in key sectors like trucking, warehousing, and food processing. There are 20% fewer truckers than needed in Central Asia and Australia. In the US, there are still fewer truckers than there were pre-pandemic, despite roaring demand. And in the UK, Brexit has contributed to a shortfall of 100,000 truckers.

😡 Booming Market, Angry Workers

Supply chains are worthless without people to keep goods flowing. 

Roaring demand and booming business has put more and more pressure on workers in foodtech & Big Food. For workers, it’s also brought higher pay, sign-on bonuses, and profit-sharing.

Here’s the state-of-play for employers-employee relations in food:

🦍 Gorillas: the tension between the leading egrocery and their delivery workforce continues to rise. This week, the Gorillas Workers Collective will appear before a Berlin labor court in their pursuit of unlimited labor contracts.

🍞 Nabisco / Mondelez: angry at longer shifts, less overtime pay, and fewer benefits, Nabisco workers across the US remain on strike, threatening supplies of Oreo, Ritz, Trident Gum, and more, leading to grocery stores stockpiling snacks. The strike started in Oregon on August 10 and has since expanded to 4 states.

Mondelez employees are on strike at three of the four U.S. bakeries the company owns, including the one in Portland, Ore. PHOTO: Alex Milan Tracy/SIPA USA/Reuters

🚚 Sysco: 125 warehouse workers and 200 delivery drivers walked out on North America’s largest food distributor this week for four days over a union dispute.

🛒 Walmart: seeing which way the wind is blowing, Walmart is raising pay for 565,000 workers, increasing their average pay from $15.25 to $16.40.

🐷 Animal Processing: farming and livestock operations are so stretched for workers, they’re plowing crops under or killing their herds. The UK’s National Pig Association reports that a 15% shortage of butchers could force farmers to kill and burn 100,000 pigs.

🍔 McDonald’s: after multiple viral pictures of “we all quit” signs outside fast food restaurants this summer, big chains like Burger King and McDonald’s are still struggling to hire. Managers are trying $600 sign-on bonuses, hiring 14-year-olds, and raising pay, with fast food wages rising 10% in the last quarter alone.

🤷 FoodTech Impacts?


Fermentation tanks. Plant-based ingredients. Hardware-heavy indoor farms. Many of foodtech’s hottest segments will feel a pinch in the coming months, just as investment and valuations hit record highs.

Here’s how the ongoing supply chain crisis will manifest for foodtech firms:

🌱 Input supplies. Any manufacturing business is feeling the pinch of higher freight costs and a trucker shortage. That means any business dependent on timely deliveries of raw goods (think truckloads of pea protein or just a small box of emulsifiers) is going to feel the pinch. And it’s not just ingredients –– this weekend, Coca-Cola warned that they’re facing an aluminum can shortage.

🛠️ New equipment. Looking to buy a shiny 500L stainless steel vat to scale up your plant-based production? Better start shopping now. We spoke with Fabio Carlucci, co-founder at Berlin’s ROY Kombucha, who talked about their challenges scaling up during the pandemic:

"We sourced our equipment from various suppliers & countries: custom-made tanks & kettles (China), custom-made fermenters & other smaller equipment (Italy), canning line (USA), labelling machine (Germany). All in all, delivery times were around 3-5 months, with several delays from basically all the suppliers. Delays were mainly due to Corona and longer shipping times or scarcity in sourcing raw materials. Prices increased mainly with regards to shipping costs."

🧑‍🏭 Higher personnel costs. With meatpackers luring in new workers with Apple Watches and Amazon paying an extra $70 / week to workers who show up on time, the cost of labor is climbing up and up. 

🤖 Computer chips. These days, everything is a computer. That’s a big problem given a massive computer chip shortage, familiar to anybody trying to buy a Playstation 5 (listed at 449.99, resellers are fetching 800.00 ten months after the console’s release),

We also expect to see more dedicated supply chain leadership in foodtech companies, like INFARM hiring a Global EVP of Supply Chain Management this summer. It’s a critical area for growth that needs C-Suite representation.

🔮 What Comes Next?

Santa Claus is gonna have a rough year, and consumers should be prepared for weak Black Friday offers and inconsistent supply

But beyond an at-risk Q4, we’re concerned about what the supply chain crisis means for innovation in foodtech. 

Food systems innovation is dependent on investment, and investors are looking to maximize the impact of their investment and see a return sooner. But a few months delay scaling up production means a few months delay in investor returns.

Should this slow investor interest in foodtech? Absolutely not. The startups we care most about aren’t selling nice-to-have luxuries, but critical inevitable changes we must make to the food system. Additionally, the supply chain and labor challenges companies are struggling through today only makes investment more critical.

One upside? There are a number of sourcing & supply chain startups looking to improve things, one way or another. Take Berlin’s Choco (restaurant ordering platform), or Denmark’s Responsibly (scoring system for supply chain sustainability and diversity that just raised a $2M pre-seed). 

Another highlight for food producers: Journey Foods, an AI-driven model that factors in nutrition, sustainability, and cost to inform product formulation. We also hope to see more platforms like Membo which make it easier for consumers to shop from local producers, bypassing overseas shipping and messy supply chains altogether.

Know other companies or startups working on supply chains and sourcing? Let us know here and we’ll come back next week with a roundup and database.

It’s a challenging period all around, and we do expect to see some delayed product launches, and yes, rising prices for consumers. With the current state of our supply chains, the only certainty is uncertainty. All aboard the supply chain pain train 🚂

Feeling the supply chain squeeze

Remember the Great Toilet Paper Shortage of 2020? Maybe that was just the beginning. 🧻

It’s been 18 months of pandemic life, but in many ways, our supply chain pains are just getting started. Now, there’s a perfect storm of a global labor shortage, soaring demand, Brexit, and climate change. Yikes.

It’s scary stuff without an upside, but these shortages and the factors behind them are a major challenge for the foodtech space. So this week, we’re getting into the sexy topic of supply chain disruption, and what it means for founders, funders, and eaters.  

(Today's word count: 1,239 words or a 7-minute read)

📊 By the Numbers: Supply Chain Lowlights

📦 Freight shipping prices are up 351% year-on-year, with no signs of reversal. That’s compounding with the increased cost of shipping containers and pallets (the humble pallet was more in-demand than ever this year, just when lumber prices were spiking). That all means shipping from China to Europe often costs 10x what it did a year ago. Yes, 10x!

🚢 The world’s third-busiest port was closed for 2 weeks in August due to a covid outbreak. That means weeks of backlog for shipments around the globe, likely creating shortages and suppressed economic activity during the holiday season.

🍳 Major food distributors (i.e. Sysco) are reporting more and more late deliveries and failing to get items on shelves and in professional kitchens, with one distributor reporting that nearly 50% of deliveries are arriving late (down from 10% in normal times). 

🐔 One recent sign of trouble: beloved chicken chain Nando’s shutting down restaurants due to a chicken shortage. The piri piri empire went as far as sending its own workers to help their suppliers. But there’s reason to believe that’s just the beginning.

🚚 The entire globe is facing severe labor shortages in key sectors like trucking, warehousing, and food processing. There are 20% fewer truckers than needed in Central Asia and Australia. In the US, there are still fewer truckers than there were pre-pandemic, despite roaring demand. And in the UK, Brexit has contributed to a shortfall of 100,000 truckers.

😡 Booming Market, Angry Workers

Supply chains are worthless without people to keep goods flowing. 

Roaring demand and booming business has put more and more pressure on workers in foodtech & Big Food. For workers, it’s also brought higher pay, sign-on bonuses, and profit-sharing.

Here’s the state-of-play for employers-employee relations in food:

🦍 Gorillas: the tension between the leading egrocery and their delivery workforce continues to rise. This week, the Gorillas Workers Collective will appear before a Berlin labor court in their pursuit of unlimited labor contracts.

🍞 Nabisco / Mondelez: angry at longer shifts, less overtime pay, and fewer benefits, Nabisco workers across the US remain on strike, threatening supplies of Oreo, Ritz, Trident Gum, and more, leading to grocery stores stockpiling snacks. The strike started in Oregon on August 10 and has since expanded to 4 states.

Mondelez employees are on strike at three of the four U.S. bakeries the company owns, including the one in Portland, Ore. PHOTO: Alex Milan Tracy/SIPA USA/Reuters

🚚 Sysco: 125 warehouse workers and 200 delivery drivers walked out on North America’s largest food distributor this week for four days over a union dispute.

🛒 Walmart: seeing which way the wind is blowing, Walmart is raising pay for 565,000 workers, increasing their average pay from $15.25 to $16.40.

🐷 Animal Processing: farming and livestock operations are so stretched for workers, they’re plowing crops under or killing their herds. The UK’s National Pig Association reports that a 15% shortage of butchers could force farmers to kill and burn 100,000 pigs.

🍔 McDonald’s: after multiple viral pictures of “we all quit” signs outside fast food restaurants this summer, big chains like Burger King and McDonald’s are still struggling to hire. Managers are trying $600 sign-on bonuses, hiring 14-year-olds, and raising pay, with fast food wages rising 10% in the last quarter alone.

🤷 FoodTech Impacts?


Fermentation tanks. Plant-based ingredients. Hardware-heavy indoor farms. Many of foodtech’s hottest segments will feel a pinch in the coming months, just as investment and valuations hit record highs.

Here’s how the ongoing supply chain crisis will manifest for foodtech firms:

🌱 Input supplies. Any manufacturing business is feeling the pinch of higher freight costs and a trucker shortage. That means any business dependent on timely deliveries of raw goods (think truckloads of pea protein or just a small box of emulsifiers) is going to feel the pinch. And it’s not just ingredients –– this weekend, Coca-Cola warned that they’re facing an aluminum can shortage.

🛠️ New equipment. Looking to buy a shiny 500L stainless steel vat to scale up your plant-based production? Better start shopping now. We spoke with Fabio Carlucci, co-founder at Berlin’s ROY Kombucha, who talked about their challenges scaling up during the pandemic:

"We sourced our equipment from various suppliers & countries: custom-made tanks & kettles (China), custom-made fermenters & other smaller equipment (Italy), canning line (USA), labelling machine (Germany). All in all, delivery times were around 3-5 months, with several delays from basically all the suppliers. Delays were mainly due to Corona and longer shipping times or scarcity in sourcing raw materials. Prices increased mainly with regards to shipping costs."

🧑‍🏭 Higher personnel costs. With meatpackers luring in new workers with Apple Watches and Amazon paying an extra $70 / week to workers who show up on time, the cost of labor is climbing up and up. 

🤖 Computer chips. These days, everything is a computer. That’s a big problem given a massive computer chip shortage, familiar to anybody trying to buy a Playstation 5 (listed at 449.99, resellers are fetching 800.00 ten months after the console’s release),

We also expect to see more dedicated supply chain leadership in foodtech companies, like INFARM hiring a Global EVP of Supply Chain Management this summer. It’s a critical area for growth that needs C-Suite representation.

🔮 What Comes Next?

Santa Claus is gonna have a rough year, and consumers should be prepared for weak Black Friday offers and inconsistent supply

But beyond an at-risk Q4, we’re concerned about what the supply chain crisis means for innovation in foodtech. 

Food systems innovation is dependent on investment, and investors are looking to maximize the impact of their investment and see a return sooner. But a few months delay scaling up production means a few months delay in investor returns.

Should this slow investor interest in foodtech? Absolutely not. The startups we care most about aren’t selling nice-to-have luxuries, but critical inevitable changes we must make to the food system. Additionally, the supply chain and labor challenges companies are struggling through today only makes investment more critical.

One upside? There are a number of sourcing & supply chain startups looking to improve things, one way or another. Take Berlin’s Choco (restaurant ordering platform), or Denmark’s Responsibly (scoring system for supply chain sustainability and diversity that just raised a $2M pre-seed). 

Another highlight for food producers: Journey Foods, an AI-driven model that factors in nutrition, sustainability, and cost to inform product formulation. We also hope to see more platforms like Membo which make it easier for consumers to shop from local producers, bypassing overseas shipping and messy supply chains altogether.

Know other companies or startups working on supply chains and sourcing? Let us know here and we’ll come back next week with a roundup and database.

It’s a challenging period all around, and we do expect to see some delayed product launches, and yes, rising prices for consumers. With the current state of our supply chains, the only certainty is uncertainty. All aboard the supply chain pain train 🚂

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