The wine industry is currently struggling with a ‘disruptive supply chain’
It is certainly not the only industry in a situation like this, but it is one that can be redesigned with the help of efficient logistics. Typically, an average supply chain in this industry can be as fast as 30-45 days. A number of factors have caused the average supply chain to quickly reach a minimum of three months. That this is anything but desirable we need not tell you. It is more interesting to look at the causes of this “disruptive supply chain. Which ones are these?
The impact of the pandemic
The overall demand for wine decreased during the pandemic. With the closure of on-trade outlets, wineries have been forced to change their sales channels to direct online sales and local outlets. This greatly reduces the sales number. Demand has recovered recently, but there are still large stocks that normally should have already been sold.
A shortage of transportation capacity
While this is not unfamiliar news, the impact of the transportation capacity shortage remains significant. The shortage is also causing more scarcity in other modes precisely because shippers have to divert to other options. Currently, the expectation is that it will take until at least 2023 for the container market to recover. The impact on the wine industry is significant. For most entrepreneurs, transportation costs are too high to continue exporting profitably.
A lack of good and sufficient personnel
Again, this is not an unknown factor, but it certainly has an impact on the wine industry as a whole. The cost of good staff is rising and competition is increasing. As a result, rising costs cannot be passed on in full to the customer and the profit margin continues to decline. Another consequence is that products cannot be produced on time
To curb the effects of the “disruptive supply chain,” it is critical to address the causes. The damage caused by the pandemic is fortunately recovering so this is a first step toward restoring the entire supply chain. Furthermore, the logistics sector is trying hard to fill the shortage of transport capacity and personnel so here too we expect to see an upward trend with time.
