If you live in an urban area, the reality is most people do not really think about how their food came to the place it is. Whether that is a restaurant or supermarket, if it is a restaurant we look at the menu and decide what we want to eat. If it a supermarket, we pick a variety of foods and put some of them together to eat. How they got there and why they are there is less of a concern that if is good to eat or do we want to eat it? A book called Food Routes by Robyn S Metcalf published by The MIT Press, Cambridge, Mas, 2019 does. The book examines the logistics of eating.

Ms. Metcalf works with a nonprofit called foodandcity.org to really search where and how our food arrives at our plate. In the food industry there are 4 very important ingredients – reliability, trust, adaptability and technology.

Reliability is requisite because consumers expect some degree of consistency in products they consume. A reliable supply chain allows for consistent pricing and quality.

Trust comes from experience. Food suppliers rely on the transit of assets and funds in exchange for products human consume.

Adaptability because failure to deliver food happens. Most of us use the global supply system, even if we do not know it, and there are friction points that cause the supply chain to halt, break, leak or misdirect our food. The most glaring example is Hurricane Helene in western North Carolina. How does the system adapt?

Technology includes AI to make it easier for consumers to track their food to ensure they trust it. Technology is the big ingredient that will drive our food system forward. This includes more greenhouse growing closer to the consumer.

Interesting facts

Shipping containers were invented by Malcom McLean in the 1950′ and 1960’s. There are 20 million shipping containers in the world and about 6 million are on cargo ships. Shipping containers transport 70% of what we eat every year and account for half of all seaborne cargo.

For war time logistics, the pentagon does it best – ensuring military personnel are fed on time and on budget. That includes mobile kitchens and tracking food shipments. The US military and the Colonels who run have been in the thick of logistics planning for decades. (the old saying armies run on supply chains, target the supply chains and the front lines do not get fed).

In any disaster in the US, FEMA depends on private and public assistance. On the private side, Wal-Mart and the big food companies have plans to ensure food and water are available as they use their incredible distribution networks. An example is Sysco partners with the Red Cross to plan food distribution through the Red Cross network. Sysco also sends in its mobile kitchens once the US Weather Service declares a hurricane watch.

Big data is used and in demand by every food company.

Linking to dividend paying stocks, behind the scenes in the food industry there are billions of dollars in the logistics to ensure the consumer buys again. Most of the time, the consumer does not worry about how the product came to the store, but it is at the right price for their budget. As an investor you should have an understanding of the logistics of the company to determine how well it works. If it works well, other things being equal the results will come in. Often times, one of the few areas the company can control costs is on the logistics side.

There are more questions than answers, till the next time – to raising questions.