Coronavirus having minimal impact on ingredient supply

The global coronavirus outbreak has companies that supply ingredients to food and beverage companies cutting back on travel, but it has had little effect on their ingredient supplies so far, according to companies contacted by Milling & Baking News.

Vitamins, enzymes, certain hydrocolloids and sweeteners like stevia and monk fruit are sourced from China.

“We are continuing to monitor the situation around the coronavirus very closely,” said Jackie Anderson, in media relations for Archer Daniels Midland Co., Chicago. “Currently, we are not seeing any material impacts to our various businesses nor to our overall company, and we are working directly with select customers on contingency plans in the event that we encounter any supply chain disruptions. Additionally, we are continuing to revise travel restrictions as needed to help ensure the safety of our colleagues.”

PureCircle, which has a US office in Chicago, produces stevia leaf ingredients for foods and beverages.

“We have not experienced any interruption in our ability to supply our customers with our stevia ingredients due to the spread of the coronavirus globally,” said Alina Slotnik, vice president of global marketing. “The diversified geographic locations of both our stevia leaf supply and our ingredient production have enabled us to avoid any such interruptions. We grow and harvest our proprietary stevia in multiple regions globally, including Africa, South America, China and the USA. The majority of our stevia ingredients are produced and purified at a secure manufacturing facility in Malaysia. Together, that has reduced the risk of potential disruption from the COVID-19 (coronavirus) outbreak.”

Sweegen, a stevia-based sweetener supplier based in Rancho Santa Margarita, Calif., is fulfilling stevia sweetener orders globally as there are no delays in terms of delivering current or previous orders, according to the company.

“Currently, there are no affected products,” the company said. “As well, there are no interruptions to raw material supplies. Our foresight to invest in a European manufacturing site commercializing the production of stevia sweeteners serves as a supply insurer in the future, and as a convenience to European food and beverage manufacturers.”

Ingredion, Inc., Westchester, Ill., has two manufacturing plants in China, James P. Zallie, president and chief executive officer, told Food Business News, a sister publication of Milling & Baking News, at the Consumer Analyst Group of New York conference in Boca Raton, Fla., in late February. Both plants are about 850 kilometers (528 miles) from Wuhan, the city where the outbreak originated. One of the plants has continued operations uninterrupted while the other has experienced disruption due to limited staffing.

“COVID-19 did not impact our business in the fourth quarter,” he said. “However, we are seeing signs in the first quarter based on mandatory quarantines and the availability of labor to operate our plants.

“The concern for us, or the watch out for us, and it hasn’t impacted us yet, is the ingredients we have to source, whether they are chemicals or materials. The knock-on effects to the supply chain you are hearing about from so many companies is the watch out for us. We don’t have great visibility going forward, but we have ample inventory.”

Tate & Lyle, PLC has not experienced significant production or shipment issues related to the coronavirus but is monitoring the situation closely, the London-based company said.

“Safety is our top priority, and in response to the coronavirus outbreak we have taken precautions to support our colleagues and operations across our network,” the company said.

REPCO, Salina, Kan., designs dough conditioners and dough improvers using enzyme technologies, and the company also offers vitamins and minerals to fortify wheat flour, milled rice, corn meal, grits, baked foods and breakfast cereal.

“Currently, we are not experiencing any delays with our ingredient supply chain,” said Monte W. White, president and CEO. “We have in fact had materials move through internal China, to the port, load on vessels and sail. We have been actively monitoring the situation with all our suppliers from throughout the world and will continue to monitor the situation.

“In addition, we have raw materials and finished products in our warehouse to help extend our supply, if there are delays due to weather, normal port congestion or now the coronavirus. We have been keeping our customers updated and will continue to do so if there are any significant changes to our supply chain.”

Based on input from the World Health Organization and other agencies, Minneapolis-based Cargill has stopped all non-essential, international business travel for two weeks, including travel across countries within a region, whether by air, train or other mode of transportation.

“As coronavirus continues to impact people across the globe, we are committed to taking every precaution to help keep our employees healthy and safe — and to do our part in limiting the spread of the virus,” the company said.

DuPont, Wilmington, Del., has issued guidance to employees on travel as well as other precautions to ensure they stay safe and healthy, a company spokeswoman said.

“We have also updated policies and procedures regarding visitors to all plants and sites,” she said. “Our actions and plans continue to evolve as the situation develops.”

The coronavirus may have more of an impact on other industries besides the food and beverage industry. The cancellation of commercial flights will impact smaller, higher-margin goods such as electronics like phones, video game consoles and computers, said Barbara Hoopes, PhD, an associate professor of business information technology at Virginia Tech University in Blacksburg, Va.

Source: www.foodbusinessnews.net