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Supply
Chain by the Numbers |
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- July 28, 2022
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Consumer Packaged Good Companies Raising Prices Big Time; Walmart Canada Launching 60-Foot Trailers; Start-Up Finishes Meals Curbside; Natural Gas Prices at Record Levels |
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11.2% |
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That was the average level of price increases food and consumer packaged goods giant Unilever saw at the wholesale level across its brand portfolio in Q2, according to its recent earning call, as businesses react to soaring costs for ingredients, supplies, and fuel. Kimberly-Clark, which makes Huggies and Cottonelle toilet paper, said its net selling prices rose 9%. Of course, this is a case of input cost inflation causing still more inflation at the consumer level. Not good. US consumer inflation accelerated to 9.1% in June, a pace not seen in more than four decades. “We are pricing ahead of the market, and we’re prepared to tolerate low-single-digit volume declines and some compromise on competitiveness for a limited period of time in order to land that price,” said Unilever Chief Executive Alan Jope. But consumers are changing behavior, are buying cheaper rice, beans, oils and other products, often purchasing the grocer’s store brands, said grocery chain Albertsons. Walmart is seeing growing food sales, driven by inflation, but reductions in sales of apparel and home items. |
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| That was the price US natural gas reached Tuesday per million British thermal units (MMBtu), the highest level since July 2008. The trade has drifted lower since that peak, ending Wednesday at $8.66. Still, natural gas is now up roughly 66% for July, putting it on track for the best month going back to the contract’s inception in 1990. Behind the spike: basic supply and demand, with scorching hot weather the predominant y driver, triggering more electricity generation to run air conditioners in the US, Europe and beyond. What’s more, Russia has been cutting flows of natural through the Nord Stream 1 pipeline to Germany, with it now operating at less than a fifth of its normal flow to the country. Rising gas prices will drive still more inflation, pushing up the cost of electricity and the many products that are based on natural gas, such as fertilizers and many chemicals. |
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60 |
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That’s how many feet long a new multi-temperature-zone refrigerated trailer is and has been added to the Walmart Canada’s private fleet. Of course, a standard trailer is 53-foot long. The program started with a pilot all the way back in 2012, with Walmart working with the Ontario Ministry of Transportation to introduce 60-foot dry van trailers to that province’s roads. This special vehicle configuration permit pilot was successful and helped to open the door for organizations across Ontario to improve productivity by reducing the number of trips required to move lighter, bulkier cargo. The latest trailer builds on that. The refrigerated trailer departs the company’s Mississauga distribution center for its stores in Windsor and Woodstock, and can fit as many as 30 pallets of perishable goods, such as meat and dry/wet produce, requiring different temperatures, according to Walmart. For context, a standard 53-foot trailer can fit about 26 pallets. While a 60-foot trailer is not allowed on US highways, there is hope that the success in Canada could eventually change US regulatory thinking. |
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That’s about how many minutes it takes for start-up Wonder to deliver a restaurant meal and finish cooking it in one of its trucks outside a customer’s home. Operating in areas of New Jersey, Wonder can deliver and prepare meals served by restaurants in the area, many upper end, such as Bobby Flay’s establishment. The Wall Street Journal reported this week that Wonder’s meals are partially cooked in a central kitchen and then delivered in “mobile restaurants” by a ”chef-on-the-road“ who finishes off the order at the curb. With the process, Wonder’s food doesn’t arrive soggy or lukewarm like regular takeout. The trucks are diesel-powered models from Mercedes, and are drawing the wrath of some in the communities for burning truck fuel during meal preparation and general decadence, while customers see the service as a great convenience. 
