‘You Can’t Make a Twinkie With Only 95% of Ingredients’: Supply Shortages Hit the Snack Food Aisle
The supply chain strikes again! Major food manufacturers are running into major production snags, as key ingredients for big snack items are tied up in scheduling and transportation headaches.
“Unfortunately, you can’t make a Twinkie with only 95% of ingredients,” Hostess Brands CFO Travis Leonard said on a recent earnings call, summing up the problem many consumer packaged goods companies are facing.
In particular, the war in Ukraine continues to create shortages on essential ingredients like wheat and cooking oils. In fact Ukraine is responsible for 31% of sunflower oil exports, while Russia and Ukraine together account for 28% of wheat production. The delays aren’t just about production, though – the invasion has also ground port activity in Ukraine to a half, with commodities only now making their way slowly thanks to agreements with the United Nations.
Extreme weather has also had an effect, with droughts and typhoons tightening supplies of sunflower oil alternatives coming out of Brazil, Canada and Malaysia.
As a response, many companies, including General Mills and Conagra, are attempting to substitute ingredients, but that comes with its own delays as production lines must be altered, and packaging relabeled to reflect the changes. All of which, of course, will raise costs across the board.
So while snack foods like Twinkies may hang onto their reputation for long shelf lives, you may not actually see them on those shelves for some time.