Retailer roundtable part III: Supply chain issues
By Vibha Shukla
At the 2024 CHFA NOW, held in Vancouver, retailers were encouraged to participate and share their experiences in an idea exchange during a retailer roundtable.
Attending retailers were split into five groups and each group was asked a question about a pressing issue impacting the natural health retail industry—rent inflation, vendor relations, supply chain, consumer education, and ethical practices and sustainability initiatives.
In the November-December 2024 issue of CNHR, we discussed the topic of “vendor relations” in detail. In this part III of the retailer roundtable series, we will share insights from both retailers and suppliers on supply chain issues.
Challenges in the supply chain
As the natural health industry is navigating through a complex web of supply chain issues, we asked industry professionals how they navigate through the challenges related to shipping, scheduling, and prioritization.
Post-COVID-19, many retailers have found themselves in a tough spot, having to juggle inflation and supply chain disruptions along with managing the needs of their customers and restoring foot traffic to the store.
Remote-area and small-scale retailers seem to face the most challenges when it comes to supply chain as they often end up being deprioritized in deliveries or losing vendors and distributors who prefer large-scale, bulk, and online retailers.
Adapting to the current situation
Thanks to these supply chain disruptions, retailers have had to deviate from their usual business strategies and swiftly create new ones. Flexibility is key, and retailers have seen the need to be proactive in this area to ensure that their customers’ demands are met.
The situation is especially tough for remote-area retailers, who have had to deal with additional distance- and weather-related challenges. Dawn Matte, general manager at Ave Maria Specialties, BC, explains, “the weather definitely has a role to play. In the winter months, we have issues with the roads, so ground shipping can be significantly delayed. It is also quite expensive to have our stuff flown into Prince George.”
Charlene Anderson, from Charlene's Nutrition Centre, Nova Scotia, also notes, “we are now used to supply chain issues and have learned to adapt. We now order from other companies and have larger orders.”
Placing bulk orders and purchasing from alternative suppliers is a short-term solution, which comes with its own set of challenges. “We try to bulk buy when it makes sense to do so. It is always a risk to purchase large quantities when trends change as quickly as they do in our industry,” explains Dawn.
Another hurdle retailers commonly face these days is inflation. Lou Liberatore, owner of The Healthy Bug, Nova Scotia, says, “most likely due to shortages of raw materials, prices have gone up astronomically. It’s hard to keep up with the price increases.”
“Inflation has made our products very expensive. We find that our suppliers do not always have the raw products to produce the consumables. And then, the delay on production means that we have to source from other areas,” explains Dawn.
Lou further explains, “some of the biggest challenges in the supply chain problem are products that are unique to only one company producing that product. There are customers that depend on the product to help with their health issues.”
From the suppliers’ perspective
Supply chain challenges aren’t limited to retailers; suppliers are also facing significant disruptions and shortages.
Jennifer Walker, vice president of sales and marketing at Prairie Naturals, discusses the growing pressure on manufacturing. “Lead times have almost doubled since COVID-19,” she says, noting that good quality raw materials are now difficult to secure, with frequent inconsistencies in bulk density, color, and flavour.
“We have had to pre-screen alternate suppliers for many raw materials to mitigate longer lead times, shortages, and an increased level of raw materials failing testing for various reasons.”
Paul Rivett-Carnac, president and CEO of St. Francis Herb Farm, explains that, to address these challenges, “we are shifting our procurement strategy from a reactive to a proactive approach, we are trying to connect more directly with farmers and making longer term agreements with them. We have also been investing heavily in our own farm with the focus of growing herbs that are hard to come by or that have quality issues.”
Strategies to overcome challenges
While there is no quick fix for retailers facing acute supply chain challenges, planning strategically appears to be an effective way to reduce the impact.
Thomas Bedford, president and CEO of Healthology, suggests, “you have to be more organized and strategic in your ordering than ever before. You have to have sufficient back inventory to avoid out-of-stocks and delivery delays. Because being out of stock means lost sales and customers.”
Retailers like Lou are learning to be adaptable when a product is unavailable. “It is difficult to mitigate issues such as this, but we try to find substitutes that may work and help the customer. Typically, we are able to find products that may be used as a substitute to the product that the customer was using.”
Looking ahead
Despite the current challenges in the supply chain, there is hope that the situation will eventually improve. Both suppliers and retailers are doing their best to navigate this challenge and adapt to the new market dynamic.
As Lou points out, “I like to stay optimistic, but I do think it will take another year or more before things get back to normal. COVID-19 was like a war that we had to battle globally. It was the invisible enemy. As in the situation with most wars, it takes time to fully recover.”