Next Thursday is Thanksgiving, which as I pointed out last year, is a time for FFFTT – family, friends, football, thankfulness, and turkey. Thanksgiving is also a time for logistics headaches. The holiday is centered around the big family meal, and the food supply chain tied to that meal is complex. But there are a number of other areas that can result in logistics headaches as well. Let’s examine some of them.
Feast Logistics Headaches
For the third year, LendEDU, an online marketplace for financial products, has conducted a survey to examine Thanksgiving spending. The average American plans to spend about $185 on Thanksgiving, up about 6 percent from last year. The bulk of that $185 (about 82 percent) will be spent on food, drink, and other costs associated with the feast. The main item at the feast is the turkey. Americans consume more than 50 million turkeys over Thanksgiving weekend, which amounts to more than $1 billion spent on the birds. The turkey supply chain can be a complicated one.
Retailers actually plan up to 6 months in advance to ensure they have all the birds they need in stock come Thanksgiving. This requires contracts, transportation, and deliveries from both large-scale turkey producers (think the Butterballs, Jennie-Os, and Perdues of the world) as well as local turkey farms. Retailers also need to balance the two varieties of birds: frozen and fresh. Frozen turkeys account for roughly 90 percent of Thanksgiving sales. These turkeys can be bred, slaughtered, and frozen year-round, which helps ease the demand fluctuations. Fresh turkeys, which make up the remaining 10 percent of turkeys, take more planning. Producers need to ensure that eggs laid in the spring are incubated properly, and the turkeys are given adequate time on the farm before being sent to slaughter. This way, producers can deliver fresh turkeys to retailers just in time for Thanksgiving sales.
Consumers have shown an interest in better understanding where their food is coming from and turkey producers have turned to technology to answer this call. Jennie-O, a subsidiary of Hormel Foods Corp. and the nation’s second-largest turkey brand, uses labels that help to provide traceability for its birds. The label includes a code that can be entered on the Jennie-O website, which will give the customer the region of the farm. Cargill, the third largest turkey provider, has turned to blockchain for improved traceability. This gives consumers more detailed information about the origin of their bird, such as the exact name and location of the farm. Aside from the name and location of the farm, consumers immediately receive any images and other information that the producer wants to share.
Another popular dish is the pumpkin pie. In fact, some estimates put the number of pumpkin pies consumed during the holiday at 50 million+, making it as popular as turkey. The fall is certainly the season for pumpkin – from Halloween jack o’lanterns and pumpkin spice everything (coffee, beer, muffins, etc.), to the dessert mainstay the pumpkin pie. The sheer volume of pumpkins sold between Halloween and Thanksgiving is mind-numbing. And pumpkin farms need to balance demand over the course of the two months. There are clearly two avenues for pumpkins – fresh, full pumpkins and pumpkins sold to manufacturers to be pureed and canned. But the logistics for both of these can be daunting.
To put the food supply chain into context, one recent report I saw indicated that your Thanksgiving meal (turkey plus all the fixings and dessert) can travel up to 2,500 miles from the farm to your table. That is an impressive supply chain.
Holiday Shopping Headaches
With Thanksgiving a week away, the holiday shopping season is about to hit its stride. Black Friday has long been the official holiday shopping season kick-off event. But Black Friday deals have extended well beyond the day after Thanksgiving, and well beyond the four walls of the retail store. According to the National Retail Federation’s (NRF) latest survey, more than 165 million people are likely to shop Thanksgiving Day through Cyber Monday, with the bookend days being the most popular. According to the survey, of those consumers that plan on shopping, there is essentially an even split between shoppers who plan to start in the store versus online.
For retailers, the holiday shopping season started long ago. Imports at West Coast ports soared through the summer, especially as retailers tried to stockpile goods before new tariffs came into play. Getting all of these goods into distribution centers and warehouses in time for the holiday rush is a constant struggle for supply chain executives. This season in particular was tough for retailers to balance the need for holiday items with the need for other seasonal items. The trade war pushed some of these companies to make difficult decisions about what and where to warehouse goods. I’m sure it caused its fair share of headaches over the last few months.
One of the most iconic experiences on Thanksgiving is the Macy’s Thanksgiving Day Parade. Started in 1924, the parade still brings out more than 3 million spectators to the streets of New York to watch the floats and balloons go by. But it is no easy endeavor. It’s also quite expensive. Between the costs for helium, float supplies and construction, studio space, and costumes, the parade costs, on average, more than $10 million to pull off. The parade also requires more than 8,000 participants and 50,000 hours of labor.
From a logistics standpoint, setting up the route, police details, crowd control, first aid stations, and everything else that goes in to the route is incredible. Add to that the labor and resources required for construction and housing of floats and costumes, not to mention getting the giant helium filled balloons ready for the parade, and your mind can start to spin. So, while the parade is an American favorite, and most people would say it is worth the effort, is can certainly be headache inducing.
The Thanksgiving supply chain is vast and complex. Preparing for the actual Thanksgiving feast takes up a lot of time, money, and resources. And the supply chain efforts required to ensure that all your favorites are available is no easy task. Thanksgiving also kicks off the busiest retail season of the year, as retailers put their months-long plans into action to handle the influx of shoppers. This again puts added stress on the global supply chain, especially as consumers expect more out of their shopping experience. I think it is safe to say that Thanksgiving indeed causes logistics headaches. But, with Americans love of the holiday, it seems to be a headache worth dealing with. Happy Thanksgiving.
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