The Friday Report: July 23, 2021

Frito-Lay Bucks the Trend

Last year, during the COVID-19 pandemic, Frito-Lay simplified its portfolio, temporarily shedding 21% of its SKU portfolio to increase its efficiency.  The move, popular with other supply chain businesses last year, helped the company to delivery its most in-demand products, meeting the velocity and capacity needed during the pandemic.

Now Frito-Lay is transitioning to a different tactic.  Labeling it “always everywhere”, the company is again embracing its pre-pandemic complexity to meet consumers wherever they are.  Eschewing its previous SKU rationalization strategy, Frito-Lay is now laser focused on investments to improve product flow.  The objective is to provide configuration flexibility on existing products instead of focusing on developing new products.

This year, the company is concentrating on labor challenges and is rethinking supply chains and labor using technology and data tools.

For more information, please continue reading here.

Wooden Pallet Prices Rise 400%

As lumber costs have risen, even doubled this year, so has the cost of pallets.  From produce growers to warehouses, wooden pallets are in diminishing supply and some businesses have even ramped up security measures to protect them.

Over 2 billion pallets circulate at any given time in the U.S. economy, 90 percent of which are made of wood.  The remaining pallets are made of plastic, cardboard, or metal. 

What are two of the factors that caused the price of pallets to rise 400%?

1. Forestry companies are being paid by fuel companies and other large corporations not to cut down trees. Big oil companies are making heavy investments, helping forest landowners to sell their forests as carbon sinks to offset the impact of oil companies and help meet carbon reduction goals.  BP Oil is one of the world’s largest purchasers of forest carbon-offset credits, a form of climate-change currency.
2. The housing market, including both new construction and remodeling contractors need lumber and are buying up available inventory.

For more information, please continue reading here.

Bed Bath and Beyond Bonds with Roadie for Same-Day Delivery

Big box retailer Bed Bath and Beyond announced its new partnership with Roadie to bring same-day delivery to nearly 16,000 zip codes, more than double that of its previous offering.  By comparison, there are 41,000 zip codes in the entire United States.

The popular home retailer announced that this provides a same-day delivery option for approximately 300 stores.  Previously, Bed Bath and Beyond had partnered with Shipt and Door Dash, enabling a firmer connection with new customers and way to increase the likelihood of return shoppers.

Bed Bath and Beyond has been undergoing a supply chain transformation.  So far, it has converted nearly a quarter of its stores in the United States and Canada to regional fulfillment centers to facilitate its concentration on e-commerce.

For more information, please continue reading here.