Coca-Cola is expecting product shortages through 2022.
During an interview with CNBC, Coca-Cola CEO James Quincey explained that “some issues are ongoing and structural, and some issues appear for a quarter and disappear again.”
The outlet summarized:
Like other food and beverage companies, Coke is dealing with snarls in the supply chain and higher commodity costs, which have resulted in some shortages.
Quincey said the company uses its global scale and long-term partnerships to navigate issues within its supply chain. However, it’s not possible to mitigate all challenges. He presented a second analogy, comparing the supply chain headaches to a game of Whac-a-Mole.
On a call with analysts, he listed issues like labor shortages, spiking gas costs in Europe and a plastic plant in Brazil that burst into flames.
“My analogy would be it’s a bit like an earthquake,” Quincey added. “You get further shock waves coming through, but they tend to be of diminishing magnitude.”
As the United States economy recovers from COVID-19 and the lockdown-induced recession, many firms are gripped by supply chain shortages partially linked to labor shortages — both of which are contributing to high inflation.
At California’s two busiest seaports — which process 40% of all shipping traffic entering the United States — there are dozens of vessels waiting to enter and unload, leading to empty shelves and product shortages across the nation. Nevertheless, Biden administration officials — such as Transportation Secretary Pete Buttigieg — are dismissing the bottlenecks as a sign of President Biden “successfully” managing the economy.
“Well, certainly, a lot of the challenges that we have been experiencing this year will continue into next year,” Buttigieg recently told CNN anchor Jake Tapper. “But there are both short-term and long-term steps that we can take to do something about it. Look, part of what’s happening isn’t just the supply side. It’s the demand side. Demand is off the charts. Retail sales are through the roof.”
“And if you think about those images of ships, for example, waiting at anchor on the West Coast, you know, every one of those ships is full of record amounts of goods that Americans are buying, because demand is up, because income is up, because the president has successfully guided this economy out of the teeth of a terrifying recession,” Buttigieg claimed. “Now the issue is, even though our ports are handling more than they ever have, record amounts of goods coming through, our supply chains can’t keep up. And, of course, our supply chains, that’s a complicated system that is mostly in private hands, and rightly so.”
As Buttigieg has admitted, economists fear that the crises affecting the United States will persist into 2022 — casting a foreboding shadow on economic growth prospects.
Earlier this month, The Wall Street Journal surveyed economists on high inflation, constrained supply chains, and labor shortages. Due to the phenomena, respondents slashed their predicted economic growth rate for this year from 7% to 3.1%.
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