The disruption wrought by the global coronavirus pandemic initially prompted widespread concern over the security of European food supplies. As European countries began to implement lockdown measures to contain the spread, headlines focused on panic buying and empty shelves, delays to the transportation of food and fears that COVID-19 in the workforce could hit production capacity.
That shelves remained, in the main, well-stocked stands testament to the food industry supply chain’s ability to flex in the face of significant disruption.
Indeed, General Mills’ recently appointed NEC Supply Chain Director Victoria Cobos explained, food businesses are well versed in managing disruption – a circumstance that prepared the industry for the unique challenges COVID-19 would present.
“The supply chain has always been exposed to disruption. We have swine flu, climate change effects through natural disasters, general disruption when companies go bust or change hands in the logistics world. Having said that, a global pandemic has a unique element of disruption because of the scale and synchronisation of all points in the network being disrupted at the same time,” she told FoodNavigator.
Cobos has a long track-record of managing end-to-end operations, innovation and transformation having 'championed' supply chain improvements across several geographies at Unilever and, more recently, crafted the Brexit readiness strategy for Nomad Foods. But joining General Mills as its supply chain lead for Northern Europe in the midst of the pandemic presented Cobos with some distinct tests.
Her immediate priority has been to help the team maintain business continuity and ‘stay the course’. At the same time, she has kept one-eye on the longer-term strategic direction that will turn the supply chain into ‘a source of competitive advantage’.
“It has been a very long year that has tested the resilience of the team. For me, the number one thing has been to manage team energy and make sure we stay the course and stay focused. Coming into a new role, it would be very selfish for me to focus on accelerating my learning curve and accelerating a journey around change. That is not going to take us anywhere.
“It has been about staying the course with a clear set of priorities: COVID, Christmas, Brexit.”
Brexit: ‘The industry is ready to deal with the aftermath’
Cobos said that the impact of Brexit, the UK’s withdrawal from the European Union, and the disruption it will cause should not be underestimated.
“Everyone that has international trade between the EU and UK is affected,” she said.
But, after two years of preparations and Brexit ‘dry runs’, General Mills’ operations across continental Europe and the UK are as ready as they can be, she believes.
“We have a lot of our own manufacturing set up in Europe, we work with local manufacturers for our snacks portfolio in the UK and we are moving some production… into the UK for the next year. I am very confident in our plans in terms of business continuity.
“Right now, the industry in general is ready to move forward and deal with the aftermath. Brexit has happened for the supply chain. For us the disruption is already real. We will have to deal with the new requirements to go through border inspection points.”
In the medium-term Cobos believes Brexit will continue to dominate the agenda for British manufacturers. “For business based in the UK [Brexit] will continue to be a priority. There are going to be elements of automation, efficiency, productivity, that are going to come into that roadmap to improve the new infrastructure so business is able to ease product flow, so we can go back to minimising costs and maximising speed and agility in order to serve our customers in the UK,” she predicted.
For the larger EU market, Brexit is less of a concern. “For Europe, [Brexit disruption] is mostly going to be redefining what are the new sources of import and export that might substitute the UK… It will not be a top three priority for Europe but it will remain so for the UK business.”
So what will the top three concerns of European food businesses be moving into 2021 and beyond?
Firstly, Cobos highlights affordability. “When we think about the cost [and pricing structure] within the consumer goods industry we need to focus on what to serve during a recession when price is going to be important for consumers.”
The food industry will also need to be nimble in its response to rapidly evolving consumer expectations, she continued. “Equally, we need the agility in order to move to demand shifts and disruptions, as we have seen not only with COVID but also with new circumstances that might come.”
Finally, Cobos highlighted the importance of sustainability initiatives in the post-COVID world.
“We lost a chance after the 2008 crisis to be able to race ahead and rebuild the way we do business. Consumers were forgiving back then. I don’t think they will be so this time. It is a unique opportunity for businesses around the world to jump in, lead, and rise to the challenge in terms of increased sustainability efforts.”
Digital development and sustainability shift
Agility and sustainability feature heavily in Cobos’ longer-term objectives and these priorities will shape General Mills' future supply chain initiatives in Europe.
“As a supply chain professional, I am looking for continuous improvement. There are two or three things that come to mind that will give a competitive advantage. How to accelerate the path towards sustainability in the supply chain would be one. As well as enabling technology, the digital transformation for the supply chain is a path that General Mills has been on for some time and definitely needs acceleration.”
The experience of COVID, she explained, highlighted a need for agility and created ‘clear gaps’ that can be met through supply chain digitalisation. She expounded on the benefits digitalisation can bring, from supply chain and demand visibility to improved planning and iteration capabilities.
“All these details: visibility across the network, capability to iterate into forecast management. This was the direction everyone was already on a path towards and this has only been accelerated by the effects of the pandemic.”
COVID also fast-tracked the digital channel shift, the Supply Chain Director told us. “No surprise with the growth of e-commerce,” she said, noting that a number of questions remain for food makers: “How do you make sure it is not only an additional channel that you distribute for, but it is a channel for which you actually build portfolios? How do you establish the appropriate infrastructure to deal not only with the current set-up of route-to-market but also with the proper API [application program interface] connections and the likes with the e-commerce network.”
On sustainability within its operations, the Häagen-Dazs to Old El Paso manufacturer is focused on what it has identified as the ‘biggest opportunities’. These include tackling food waste and backing environmentally friendly packaging, Cobos revealed.
“General Mills has signed the pledge Champions 12.3 that is about reducing half of our food waste by 2030, plus some other very interesting initiatives regarding sustainable packaging,” she said.
Other areas of focus include the carbon and water footprint of the group’s European operations. “When people think about sustainability they automatically think about the CO2 footprint and water use. There are very strong plans within our factory footprint in Europe to continue to reduce our impact on the environment.”
These concerns will form the foundation of General Mills’ strategic supply chain agenda moving into the new year.
“This is the time to shine,” Cobos enthused. “It is going to be a very interesting year as we move into 2021… We have all the right ingredients to put our focus onto the things we want to make happen – and make 2021 the year of the supply chain.”