The State of the Market Before the Disaster
The Walkers Snack Foods Limited brand is a food producer focusing on the British and Irish markets. Producing potato chips and other (non-potato-related) snack foods has become the company’s fundamental operation. It dominated the British crisp market in 2013, capturing 56 percent of the market. Over 11 million bags of crisps are manufactured daily at the Walkers plant in Leicester, England, using around 800 tons of potatoes. Regarding potato chips, Walkers is by far the industry leader (Alexander et al., 2022). US food and beverage giant PepsiCo, which currently owns the Walkers brand, earns a huge profit every year. Even though health and safety expenditures increased because of the pandemic, Walkers nonetheless managed to turn a profit of about ÂŁ40 million on revenues of ÂŁ260 million, according to its 2020 financial statements.
More than 11 million bags of crisps are made every day at Walkers’ Leicester factory, making it the largest of its kind in the world. Last year, Walkers unveiled a ÂŁ14 million improvement to its distribution center near Leicester, with a new facility featuring state-of-the-art technologies and equipment that the company asserts has enhanced productivity and capacity at the site. This upgrade is part of Pepsico’s ongoing digital transformation program. According to the company’s 2021 annual report, Pepsico intends to create a global network of technology hubs to promote its digitization goal (Jones, 2022). Over the next three years, the first two centers, in Dallas and Barcelona, will generate over 500 new, high-quality data and digital jobs.
The State of the Market After the Disaster
The corporation blamed an IT upgrade in November 2021 for the drop in output that caused crisp scarcity across the United Kingdom, with merchants only receiving a portion of their orders, if they received any. For nearly three months, the British company was at the center of a controversy regarding a lack of potato chips. However, the difficulty was not caused by the shortage of truck drivers, the overcrowding of container ports, or any other supply chain problems caused by the global pandemic. Walkers had this issue because of an IT upgrade implemented by parent firm PepsiCo. The IT issues compounded the difficulties already experienced by the British food industry during the months of shortages and disruption brought on by the pandemic (Jones, 2022). Due to a lack of stock, stores like Tesco started utilizing cardboard replicas of fruits, vegetables, and other foodstuffs to fill empty shelves. PepsiCo, the brand’s owner, warned consumers after weeks of shortages that they may not have reliable service for its Walkers products until the last week of January 2022.
The State of the Supply Chain After the Disaster
Attributable to the shortfall, some stores were forced to empty their shelves of Walkers crisp packets, and others resorted to selling the snacks online at inflated prices. The computer malfunction at the Leicester facility prevented the firm from creating as many packages as usual. Sites still produced crisps and snacks, albeit on a smaller scale (Burningham & Venn, 2021). Because of the botched computer upgrade, production at the world’s largest crisp factory was disrupted, leading to severe shortages of some of the products that British consumers love.
Many of Walker Company’s specialized products were delayed as the issue hindered manufacturing. Due to limited resources, Walkers had to prioritize producing its best-selling flavors, such as finely salted cheese and onion, salt and vinegar, and the Quavers and Wotsits. Online shoppers at Asda and Tesco found only limited quantities of some of their favorite Walkers crisps available for sale (Jones, 2022). Due to the glitch, only around a third of the company’s crisp varieties were available for online purchase through Tesco. Meanwhile, due to an apparent scarcity, Asda’s online store has been temporarily disabled to purchase over 70 Walkers snack items. Smaller crisps companies began acquiring shelf space when the company’s scarcity began, which could significantly impact Walkers’ market share and revenue.
Steps Taken to Remedy the Disaster
Walkers Snack Foods Limited placed full-page ads in major UK newspapers to apologize for the persistent lack of availability of its snacks. After several weeks of supply disruptions, Walkers issued an official apology to their clients via social media and other outlets (Jones, 2022). The firm claimed it made every effort to ramp up production and restore supplies to retail outlets. It also detailed how an issue with the upgraded IT system had affected various products, from pre-salted crisps to Quavers. Even though the company promised to speed up manufacturing of its best-selling crisp flavors, it did not specify when supplies would be restored.
The Success of the Remediation
PepsiCo, the company that owns the Walker brand, had just finished a ÂŁ14 million refurbishment to its Beaumont Leys headquarters, the largest UK distribution location when the glitch occurred. Though the corporation later claimed the issues were resolved, production had to be cut back from normal levels. Nonetheless, in July 2022, a second supply chain disruption occurred despite the company’s earlier assurances (Jones, 2022). The initial shortfall had left customers without their favorite snack for months before this second scarcity hit the crisps retailer. In spite of this, Walkers continued to blame IT issues for the lack of crisps, which caused several of the company’s most popular flavors to be unavailable at retailers. For the second time in a little under a year, the crisp maker experienced a scarcity of snack products due to the malfunction of digital systems. Currently, the global supply chain issue has affected the UK’s economic recovery, resulting in rising costs, delayed supplies, and shortages on store shelves.
References
Alexander, R., Wade, J., McElroy, A., Jackson, K., Ferguson, J., Gibbs, J., & Woods-Giscombé, C. (2022). From proximity concerns to constant snacking: Narratives of food access and consumption patterns before and during the COVID-19 pandemic. Journal of American College Health, 1, 1-7. Web.
Burningham, K., & Venn, S. (2021). “Two quid, chicken and chips, done”: Understanding what makes for young people’s sense of living well in the city through the lens of fast food consumption. Local Environment, 27(1), 80-96. Web.
Jones, D. (2022). Walkers crisp shortage as supplies hit by computer glitch. Cambridge News. Web.