(Bloomberg) -- Mondelez International Inc. is making fewer Nabisco cookies and snacks during a worker strike at three U.S. plants, further limiting supply in an already tight market for packaged food.
Production of Nabisco products continues, but “not to the same level” as before the strike, Chief Executive Officer Dirk Van de Put said at a Barclays consumer conference on Thursday. Another meeting with the union will take place next week, he said.
In preparation for potentially contentious talks and a strike, Mondelez created a business continuity plan that it has now enacted, Van de Put said. Actions have ranged from increasing inventories before the strike to simplifying sales operations to ease production and distribution.
Nabisco, a subsidiary of Mondelez, produces Oreo cookies, Ritz crackers and other snacks.
The company's fulfillment rates have worsened recently, according to market analysis from DecaData, which tracks retailer transactions with shoppers and manufacturers. The rate of undelivered orders climbed to 7.1% from 5.3% prior to the strike, the data show, with the vast majority of those caused by Mondelez canceling shipments.
Van de Put said the company remains committed to U.S. manufacturing and would like to invest more in its plants, but “we need to remain competitive” to do that.
See Also: U.S. Food Suppliers Are Having Trouble Keeping Shelves Stocked
U.S. food producers are struggling with a lack of workers and higher commodity and shipping costs, sparking a broad round of price increases. This has made it more difficult to meet demand.
“This is a really bad time for a labor stoppage,” said Barry Friends, a partner at foodservice consultant Pentallect Inc. “There's such a crazy imbalance of supply and demand right now. Everything is just-in-time, everybody has learned their lesson from Covid, and they're trying to carry more inventory. But there's just no cushion.”
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