Changing seasons affect food manufacturers in a multitude of ways, some positive and some negative. Certain times of the year will increase demand for a particular type of food product or products, and other times of the year will see a dramatic reduction in demand for those same items.
The seasonality of many food items means that manufacturers, and in particular, their inventory manufacturing processes, can be put under a huge amount of strain often without warning. Sudden changes in demand can put huge pressure on inventory manufacturing, and depending on the company this may be difficult to achieve.
Likewise, sudden decline in the popularity of seasonal foods may result in inaccurate inventory manufacturing processes, which could result in excess stock and inventory wastage. Below, we examine the key ways that the seasons may impact food manufacturing businesses.
There are many food products that increase and decrease in demand according to the season. Obvious examples include foods like turkey during the Christmas period, and chocolate during Easter. Less obvious items include hamburger patties during the summer period, and hot dessert foods during the colder months.
Despite the apparent predictability of demand according to seasonal changes, this effect can in fact be unpredictable. For example, there may be a sudden cold snap during the warmer months that creates a sudden surge in demand for hot, “comfort” foods. In the same way, summer may suddenly become cold, and demand for barbeque foods may suddenly dissipate.
The plus side of this for food manufacturers is that it can give them some idea of when to start manufacturing particular products to be ready for the increase in demand. It may also help them to ascertain inventory manufacturing needs, in terms of the amount of each product that might be required to meet demand.
This means that food manufacturers can properly prepare for the wax and wane of demand for particular products, possibly making their operations more efficient.
While food manufacturers may be able to get a gauge about the general trend in demand for these particular products, it may not be possible to get an idea about the specific dates and the extent to which demand can be predicted to increase and decrease.
For this reason, it can be difficult to estimate how much stock will be needed, and this puts food manufacturers in a risky position. This situation can lead to an excess of stock if demand turns out to be less than expected, and vice versa; if demand is unexpectedly high, there may be too little stock.
Both extremes can inhibit food manufacturers’ ability to remain productive and profitable. Excess stock, especially perishable items, are problematic because they inhibit profitably unless manufacturers find another way to sell them off.
Similarly, a lack of stock where demand is high means food manufacturers may be outdone by competitors, as customers flock to other stockists for their seasonal food needs. Not only does this immediately restrict sales opportunities but it may also tarnish the manufacturer’s reputation and prevent retention of the customer base.Topics: food manufacturing, inventory management, overstock, seasonal demand, stock control