Is the supply chain broken for good? Experts warn grocery stores may be missing food items for years

Tart, tiny and round, it's a symbol of a supply chain in crisis.

The Barbera grape - the kind grown near the central coast of Peru - was, for a brief period of time last year, noticeably absent from grocery stores across southern Ontario.

The navy-blue berry was at the heart of a labour uprising in the South American country, a conflict between farmers and the Peruvian government over working conditions and wages in the pandemic-ravaged region of Ica, where the bulk of the country's cultivation takes place.

Larry Davidson, a produce supplier at the Toronto-based Ontario Food Terminal, the largest wholesale fruit and distribution centre in Canada, was quick to notice the knock-on effects of a worker boycott nearly 6,000 kilometres away.

As one of the largest grape importers in Canada, his business relies on contented farmers in far-off countries to fill orders for big-box store clients in Ontario.

For us, grapes are like the Cadillac item at the grocery store. They're a major commodity that all our clients want - up there with apples and bananas.

But suddenly, it became so incredibly hard to source them," said Davidson, who is also the CEO of North American Produce Buyers.

These days, Davidson's imported fruit from South America often arrives 28 days later than expected - up from the 14-day delays he experienced just six months ago.

Between shipping delays, worker absences due to COVID-19 and a dearth of trucks available to collect the goods from inland ports in the United States, Davidson said his produce is experiencing disruptions like never before."

Over the last half century, Canada's food supply chain has grown increasingly reliant on a global network of producers, suppliers and shippers to move essential items seamlessly from farm to retailer to dinner table.

The bulk of South American blueberries we consume each winter, when Canada's farmlands freeze over, are expected to land in the hands of local grocers in a matter of weeks without delay. Beef products are scheduled to cross smoothly through the Coutts border, between Montana and Alberta, without hindrance.

But the COVID-19 pandemic has exposed pervasive flaws in this highly interconnected system that have left grocery stores short on supplies and without some of their most popular items.

Now, while truckers congregate in the nation's capital to protest government-imposed vaccine mandates, adding pressure to Canada's transportation troubles, food policy experts are warning of a more pernicious problem afoot: the Canadian food system is headed for an age of disruption," where sporadic backlogs and labour unrest become the norm rather than an anomaly.

My reading of all the trends and all the projections we've seen - whether it's related to labour or weather or demographics - tells me that the coming decades could look a lot like the last 22 months," said Evan Fraser, the director of the Arrell Food Institute and a professor of geography at the University of Guelph.

Pent-up demand for imported goods has overwhelmed ports across North America while driving up the cost of delivery. A sweeping wave of the highly contagious Omicron variant has left scores of manufacturers without the workforce needed to match demand.

Labour unrest in key sectors like agriculture and transportation - two industries that were experiencing a declining workforce even before the pandemic - has made shipment schedules unpredictable and ever-changing.

And the flooding in B.C. in November, plus the drought in the prairies last summer, laid waste to farmers' crop fields while damaging roads and highways.

Canadians are not facing food scarcity, Fraser said; shoppers will still have plenty of access to food - they just may have to swap staple items for substitutes, and embrace our homegrown bounty of seasonal offerings.

With the exception of certain remote areas, which often rely on lengthy and expensive air transportation for food deliveries, the present disruptions along the supply chain have led to fewer food options on shelves rather than severe shortages.

The stressors now facing the supply chain are part of a years-long shift that began before the pandemic.

In the past decade, the agriculture sector has lost approximately 70,800 workers, according to Statistics Canada. Employment in manufacturing has fallen by 200,000 jobs since the financial crisis of 2007-08.

A recent report from the Ontario Chamber of Commerce found that almost 40 per cent of the agricultural workforce will retire in the next decade, while an estimated 123,000 positions - or one in three agriculture jobs - will go unfilled by 2029, with Ontario accounting for the majority of the labour gap.

Meanwhile, few young Canadians are joining the sector. Defined by physically demanding and seasonal work, often located in rural areas, job vacancies have surged in recent years.

A shortage of 16,500 workers in 2018 cost the agriculture industry roughly $2.9 billion in lost revenue, according to the same report.

As we lose workers, the smaller pool of employees have to take on more responsibilities," said Kathleen Sullivan, CEO of Food and Beverage Canada.

It's a catch-22: those workers burn out, they leave their job, and then we're left with even fewer workers taking on even more work."

In January, as Omicron swept through Ontario, food plants and manufacturers were operating with a 30 per cent labour shortage, said Sullivan.

Manufacturers and meat packers around the province with smaller labour pools have shifted their focus to more popular items - chicken thighs and drumsticks, for example, rather than whole chickens or feet - leaving some grocery stores short on certain items.

Rabba Fine Foods, a popular Toronto grocery chain, recently reported trouble sourcing poultry. In a recent earnings report, Sobeys owner Empire Company Ltd. warned that the company is exposed to disruptions that could result in obsolete merchandise or an excess or shortage of merchandise in its retail store network."

The assumptions our system has been operating on - largely that trade will expand and it will become easier and more efficient to move things long distance - well, those assumptions aren't nearly as rock solid as they were a decade ago," Guelph's Fraser said.

Canadian retailers looking overseas to import food are encountering firsthand the perils associated with civil unrest and COVID-19 outbreaks halfway around the world.

The labour dispute in Peru, early in 2021, was only one obstacle in the highly intricate odyssey to transport grapes from South America to Toronto, Davidson said.

When the grapes are picked and packaged, they are transported by truck to Callao Port, in Lima. From there, the containers board an ocean liner that sails north along South America's Pacific coast until it reaches Panama.

Typically, the ocean liner would pass through the Panama Canal without hesitation. But due to shipping backlogs at inland ports across North America, the containers are unloaded in the Central American country and wait for space to clear at the ports, before sailing north to the Port of Wilmington, in Delaware.

For suppliers like Davidson, the longer journey has become a nightmare of soaring costs and expired produce.

It's about as difficult as I could possibly imagine," he said.

At best, the ships travel the vast expanse between Lima and the United States' east coast in two weeks. With delays in Panama and the U.S., though, and a lack of truckers to collect the goods once they're loaded off the ships, the process now takes closer to a month.

When stored correctly, grapes can last up to six weeks after harvesting. By the time they get to Ontario storefronts, though, only a week or two remains before expiry.

Since Ottawa's vaccine mandate for drivers went into effect in January, as many as 26,000 truckers have been kept from delivering goods across the Canada-U.S. border, according to the Canadian Trucking Alliance.

Even prior to the vaccine mandate, Statistics Canada pegged the number of truck-driving jobs going unfilled at 22,990.

In recent weeks, Ottawa's Ministry of Transportation has organized a national summit among industry groups to find solutions to Canada's supply-chain disruptions.

Food and Beverages Canada, along with several other industry groups, have lobbied the federal government to expedite the process for foreign workers coming to Canada and to expand business' access to migrant labour.

The sector can no longer manage these vacancies, and a reduction in domestic food production will be inevitable without better access to labour," said Sullivan.

Long-term, stronger investment is needed to keep Canada's agriculture and food-packing sector from a widening skills gap and labour shortage, said Fraser.

Investments in vertical farming, bioreactors, enhanced greenhouses and better supply chains - this is imperative to making my bleak assessment less bleak," he said.

What's clear is that the tribulations facing Canada's food supply system won't end with the pandemic, Fraser said.

This is a huge disruption that's accumulated over several years. And these challenges will come with greater frequency."

Rick Rabba, president of Rabba Fine Foods, said he expects some supply-chain constraints to ease in the coming month as Omicron subsides. The Toronto grocery chain stocked up on inventory in recent months, filling its warehouses around the GTA, to ensure the stores would not run low on non-perishable items like rice and sugar.

For suppliers like Davidson who source perishable items from around the world, the road ahead is less certain.

I've been in the supply business for 25 years, and nothing comes close to what we're facing now," he said.

It's hard to know when, exactly, all this ends."

Jacob Lorinc is a Toronto-based reporter covering business for the Star. Reach him via email: jlorinc@thestar.ca