Continued Demand for CPG Products Exacerbates Supply Chain and Labor Challenges

Food manufacturing wage increases were up 4.6% in July over last year — 6% for production and non-supervisory workers — but have not influenced job growth.

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The continued demand for consumer packaged goods (CPG) products has exacerbated supply chain and labor challenges, according to a new report from the Consumer Brands Association (CBA).

“The second quarter of 2021 builds on a remarkable story of an industry that has continued to deliver essential goods to the American people every day through one of the most challenging periods in the industry and country’s history,” says Geoff Freeman, president and CEO of CBA. “But, with supply chain backlogs more severe and the labor shortage more desperate, consumers’ access to essentials is threatened.”

From the Consumer Brands Association:

  • Demand for at-home consumption jumped 8.7% in the second quarter of 2021, proving there was no decline in the need for CPG products despite the rollout of vaccines and widespread reopening of the country.
  • The cost of making essentials continues to rise, with record-breaking Producer Price Index readings month after month. There are also significant delays and added costs for shipping product ingredients, packaging materials and finished goods to consumers, caused by factors such as port congestion, truck driver shortages and rising diesel fuel costs.
  • Food manufacturing wage increases were up 4.6% in July over last year — 6% for production and non-supervisory workers — but have not influenced job growth.

“Supply chain bottlenecks and workforce gaps lead to delays and potential shortages, which are bothersome when a consumer must wait months for furniture delivery, but disastrous if those delays mean consumers don’t have access to essentials they depend on like baby formula, soap or toilet paper,” says Freeman. “The CPG industry needs the federal government to engage on supply chain issues to alleviate the pressure it’s feeling so consumers do not suffer the consequences.”

 

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