The olive oil supply chain is grappling with As the holiday season unfolds, consumers worldwide are eagerly preparing their wish lists, organizing festivities, and flocking to retailers in the quest to beat the holiday rush. Little do they know that their holiday season could take unexpected turns, impacting everything from their favorite treats to the cost of gifts and delivery delays. The holiday season presents unparalleled challenges for supply chains, and while historical trends have remained relatively stable, 2023 appears to be an outlier, introducing unique disruptions.
Online Shopping and Surcharge Struggles
The shopping landscape has evolved significantly in recent years, with brick-and-mortar stores giving way to online shopping. Notably, e-commerce has extended beyond traditional websites to encompass various digital channels. A McKinsey report highlights the dramatic increase in online beauty product shopping between 2015 and 2022, with continued growth anticipated. South Africa even reported more online than in-store sales during Black Friday, underlining the growing shift towards digital commerce.
The surge in online shopping, coupled with the demand for swift deliveries, places tremendous pressure on retailers. They must anticipate last-minute rushes, manage increased production and inventory, and address potential delivery issues arising from transportation challenges. Delays are expected due to heightened shipment volumes and unpredictable weather events. Retailers are leaning towards maintaining “just-in-case” inventories to mitigate inventory problems caused by delayed deliveries.
Sugar Shortages Souring the Season
Traditionally, the holiday season is synonymous with indulging in sweets and treats. However, a global sugar shortage has thrown suppliers, retailers, and consumers into turmoil. An anticipated deficit of 5.4 million metric tons of sugar this season is poised to ripple through global consumption during the holidays. This shortage will impact not only candy but also dairy products like flavored milk, yogurts, and ice creams, as well as beverages such as energy drinks and alcoholic beverages. The consequences of this sugar supply crisis extend far beyond the sweeter side of the holidays.
Rice, a dietary staple in many parts of Asia and Africa, holds a prominent place in holiday feasts. Concerns about a global rice shortage were triggered by India’s ban on various rice exports, sending ripples through commodities markets and raising concerns about global food security. The threat of El Nino and climate change further complicates the rice market’s stability. While some believe there is no immediate cause for alarm, others are preparing for potential disruptions to the rice supply chain, causing uncertainty during the holiday season.
Olive Oil Quandary
low production, soaring prices, and heightened demand. A 42% increase in extra virgin olive oil prices has caused global distress and reduced consumption. Dry weather affecting olive harvests in Europe, particularly in Greece, Turkey, and Spain, has contributed to this crisis. Brands like Graza have been forced to increase prices due to rising olive oil import costs, leading businesses to seek alternative supply sources.
Discounts and Deals
In a departure from tradition, retailers have increasingly relied on heavy discounts and strategic offers before the holiday season. Amazon Prime Day and global Black Friday sales have moved ahead of December, as consumers prepare for Christmas shopping earlier to seize deals and avoid last-minute rushes. Shoppers exhibited more caution, seeking value-for-money deals and strategic buying. Retailers anticipate continued reliance on discounts, reduced inventories, and attractive deals to clear remaining stock. The fluctuating nature of trending products makes it challenging to predict demand, emphasizing the importance of cautious planning and efficient supply and delivery management.
The holiday season, traditionally a time of joy and celebration, now brings uncertainty for supply chains worldwide. Adapting to evolving shopping patterns and disruptions is essential for retailers to navigate the holiday season successfully.