- From blood test supplies to hot sauce, this article calls out four goods facing production squeezes shaping consumer markets in 2023.
- Read more for insights into global supply chain interdependencies as well as bright spots amid enduring shortages.
Table of Contents
Recommendation
Writing for Supply Chain Drive, Ben Unglesbee provides an update on anticipated supply chain problems based on events in 2023. Political upheaval, climate disasters and the lingering effects of the pandemic pose threats to a variety of commodities, particularly produce, pharmaceuticals, semiconductors, and lithium and other materials used in electric vehicle batteries. Problems in US production capacity and its reliance on international sources also drive some domestic concerns. Unglesbee reports that both domestic and international trends could affect end users, whether they’re restaurant chains, auto manufacturers or parents.
Take-Aways
- Shortages of various essentials have continued since the advent of COVID-19.
- Geopolitical and environmental issues fuel supply chain slowdowns and emergencies.
- Big tech is not immune to shortages.
Summary
Shortages of various essentials have continued since the advent of COVID-19.
Years after the peak of the pandemic, supply chain challenges persist across geographies and sectors, including food crops, pharmaceuticals, semiconductors and lithium. Some situations have improved while others have deteriorated, and what is good for one industry may bring new perils to another.
“Many of the constraints to supply that caused headaches in 2021 and into 2022 have eased, for reasons good and bad. (Good: Capacity rebounded. Bad: Demand slumped.) But shortages haven’t disappeared completely. Specific circumstances — from geopolitical and environmental turmoil to localized demand surges and more — are leading to stockouts of some goods.”
Perhaps most concerning are shortages in critical medicines for children. In the fall of 2023, when children were experiencing a variety of respiratory illnesses, parents sought over-the-counter treatments to address their kids’ flu symptoms and provide pain relief. Major US drug store chains responded by imposing purchase limits.
Around Thanksgiving, a common pediatric antibiotic, amoxicillin, was in “‘acute shortage.” The shortfall in this life-saving antibiotic stemmed from purchasing pressure and limits on production capacity. Amoxicillin earns only minimal profits, providing scant motivation for producers to create large reserves. Other pharmaceutical shortages included ADHD medications, particularly Adderall.
Geopolitical and environmental issues fuel supply chain slowdowns and emergencies.
Ongoing dependence on Chinese exports creates vulnerability across numerous sectors, including pharmaceuticals. Contrary to earlier predictions, the Ukrainian-Russian conflict did not cause a crisis in staples in 2022, but as the conflict continues, so does uncertainty about future supplies. Extreme weather events persist in California, affecting many items, especially produce.
“Dole COO John Linden told analysts in November that the fresh fruit and vegetable producer was seeing ‘complete crop failure’ in key commodities.”
For example, a deluge preceded by a heat wave eliminated almost a third of salad staples. Several restaurant chains sought to modify customers’ expectations for menu standards. Chains that serve breakfast felt a greater impact because their menus are heavy on eggs and grains. While end users endured price hikes and commodity shortages, suppliers reaped rewards from higher unit prices.
Big tech is not immune to shortages.
Electric vehicles promise to help the environment by limiting polluting emissions, and consumers are lining up to buy them to take advantage of government tax and cost incentives. Yet greater demand for EVs drives up the costs of critical materials, such as the lithium and graphite used in manufacturing EV batteries.
“Supply is getting better for some chips, and 2023 could be the year when, finally, most of the industry stabilizes.”
Semiconductor chip shortages have endured for several years. The automobile industry relies on semiconductors, as do many other tech manufacturers. President Joe Biden’s administration has attempted to ease the problem with economic emoluments. However, at least part of the easing of shortages stems from decreased demand, but that is happening in response to concerns about a worldwide economic slowdown and often is not due to structural improvement on the supply side.
About the Author
Ben Unglesbee is a Senior Reporter for Supply Chain Dive.
Genres
Business, Economics, Technology, Agriculture, Science, Health
Review
In this timely article, business writer Ben Unglesbee highlights four products projected to face supply shortages in 2023 – blood collection tubes, tomatoes, chicken eggs and Sriracha sauce. He outlines key factors squeezing output for each, from pandemic disruptions to climate change influences to geopolitical dynamics.
Unglesbee notes the blood collection tube shortage resulting from COVID-spurred closures threatens healthcare systems reliant on blood testing. A nasty bird flu cutting egg yields combines with soaring feed costs to shrivel chicken egg inventories. Adverse weather events like droughts decimate tomato crops. Meanwhile Sriracha maker Huy Fong Foods still lags pre-pandemic production levels.
The article underscores how interconnected modern supply chains remain vulnerable to unexpected shocks with widespread ripple effects. While outlining potential constraints on consumer goods or services from blood drives to breakfast menus, Unglesbee closes on a hopeful note. He predicts innovators adopting vertical integration, localization, agtech, and other strategies to emerge more resilient.