Where did all the peanut butter go?
Sporadic shortages are hitting store shelves following a massive recall of Jif peanut butter, the nation's top-selling brand. The severity of the shortage depends on where and when you're shopping.
The same factors that created the baby formula shortage are playing a role with this one: The leading brand was pulled from shelves over food-safety contamination concerns, which immediately diminished the overall supply. This forced shoppers to buy other brands at a time when the supply chain was already strained by abnormalities in the COVID-era economy.
"In all of these disruptions it is usually a trigger, in this case a recall," said Karen Donohue, a supply-chain expert and professor at the University of Minnesota Carlson School of Management. "What's interesting now is the consumer reaction has been further heightened, because people are on the lookout for potential shortages that would affect them."
Like with toilet paper in the early days of the pandemic, where there's a shortage, there's hoarding.
"It really happens a lot for these stable commodity products that everyone wants — it kind of changes your life if you don't have it," Donohue said. "Now you have this inventory sitting in people's houses that could be servicing other people."
J.M. Smucker, which owns Jif, launched a nationwide voluntary recall in May after authorities linked several salmonella cases to peanut butter produced at plants in Kentucky and Tennessee. Jars of Jif are just starting to consistently show up again at retailers.
"With confidence in our food safety processes and the additional measures we have put in place, we are working as efficiently as possible to return our products to store shelves," Smucker spokesman Frank Cirillo said. "We have resumed accepting orders from our retail customers at both our Lexington and Memphis facilities and expect products to be back on shelves shortly."
In June, company executives said the recall could cost them $125 million in lost revenue over the next year.
Jif's biggest competitors, Skippy and Peter Pan, are now owned by Minnesota companies and stand to benefit from the short-term absence of Jif.
Hormel Foods owns Skippy, the second-leading peanut butter brand in America, and Justin's, a top-selling brand of natural nut butters. Just 18 months ago, Lakeville-based Post Consumer Brands brought on Peter Pan peanut butter.
"We continue to see really strong consumer demand for our Skippy and Justin's products," said Jeff Frank, Hormel's group vice president of grocery products. "Our teams continue to collaborate closely with our retail partners to ensure we are able to have the Skippy and Justin's products that our fans love on the shelves."
As to the peanut butter shortage, Frank said both brands "are able to be found in stores nationwide."
While supplies of the larger 40-ounce jars of Skippy have been easier to come by, only two Target stores in a 50-mile radius of downtown Minneapolis had the 16-ounce size in stock on Thursday, according to the retailer's website.
Target's store brand of peanut butter was also in short supply around the metro area.
Peter Pan has seen a spike in demand since the Jif recall, and the brand is "working across
the supply chain to produce more product that will enable us to provide a more consistent supply," Josh Hudson, Peter Pan senior brand manager at Post Consumer Brands, said in an e-mail.
"We expect that this will lead to a long-term positive impact for the Peter Pan brand," Hudson said. "There are many consumers who are either trying Peter Pan for the first time or increasing the amount they buy."
The peanut butter shortage joins a long list of products that have had trouble staying in stock in recent years, including more recent examples like sriracha hot sauce and tampons.
"Examples like baby formula, tampons and peanut butter are all products that have fairly consolidated manufacturing and one large brand that dominates the market," Donohue said. "In each of these cases, it was the dominant brand that had the product recall."
While the peanut butter and hot sauce shortages are an inconvenience for many shoppers, the lack of baby formula is a matter of life and death for many infants.
Still, peanut butter is a low-cost staple for many households and is a cheap source of protein especially.
As companies look at supply chains and risk management, contingency plans should focus on these types of disruptions, Donohue said.
Companies also need to weigh what is more costly: overproducing products to ensure stable supplies or missing sales due to lack of inventory. It's usually the latter, Donohue said.
"That might be a way to potentially lose customers."