Major US holidays are often traditionally centered around, or at least culturally known for, important meals and celebrations involving food and drink. What would Thanksgiving be without an elaborate turkey feast? Christmas is similarly known for social gatherings with family and friends, nearly all of which usually involve food and beverages. Fourth of July? Grilling, hot dogs, burgers, and beer. Same for Labor Day and Memorial Day weekends, in many cases. St. Patrick’s day? Not just a famously green river, but rivers of green beer flowing from practically every tap in the country. Mother’s Day? Typically the busiest day of the year for US restaurants, and certainly a cash cow for their suppliers as well.
US holidays often create headaches (and, if handled well, record profits) for Food and Beverage (F&B) manufacturers, suppliers, and any other organization along those critical supply chains. Holidays and holiday seasons can create or be impacted by significant shifts in consumer demand, labor availability, logistical challenges, component shortages or volatility, and regulatory challenges, all of which can disrupt F&B supply chains. Understanding these impacts is crucial for manufacturers aiming to maintain efficiency, streamline production/supply, and meet client expectations during peak seasons.
Let’s go over some of the primary ways that holidays can impact F&B supply chains.
Holidays often lead to a spike in consumer demand for specific food and beverage items, and can put a strain on F&B manufacturers and suppliers. Naturally, Thanksgiving sees a huge increased demand for turkeys, canned goods, and baked products. NPR reports that demand for turkeys spikes by an astounding 750% for Thanksgiving. That kind of regular annual increase can determine nearly every aspect of a turkey farmer/supplier’s yearly schedule, since around 43 million birds need to be hatched, raised, inspected, slaughtered, processed, and distributed on schedule to meet the fourth Thursday in November deadline.
When things don’t go as expected, prices and availability can become volatile, and can increase consumer demand further. Consumer Goods Technology reported in 2021, “Beyond steady inflation, volatility across global supply chains has led to supply shortages and transportation nightmares, threatening the availability of Thanksgiving staples, and driving prices even higher for consumers….The shortage of certain holiday favorites and the likely impact on both consumer wallets and commercial revenues during a key season illustrate how closely linked supply chain value is to availability and response time for organizations. As a result, it’s critical that today’s supply chain leaders think farther into the future when it comes to demand and how they can align their resources to shape and meet that demand.”
Similarly, Christmas and the Fourth of July drive higher sales in candy, beverages, and ready-to-eat meals. Along with Christmas, candy sales also spike during the other “big four” holidays (which include Valentine’s Day, Easter, and Halloween, as you might expect), according to SnackandBakery.com. These four holiday periods account for 64% of annual sales for the $48 billion confectionery industry. This surge necessitates that manufacturers scale up production and ensure timely distribution to meet the increased demand.
For the beer, wine, and packaged liquor market, WineandCheerCart.com says “Liquor store sales aren’t evenly spread throughout the year; there are specific holidays and days that see massive spikes in revenue.” The article says the following 5 holidays are the biggies for this section of F&B manufacturers and suppliers:
We mentioned St. Patrick’s day above, and if you guessed that it’s a juggernaut for beer and spirits sales at bars, you’d be absolutely correct. Michigan State University says, “This holiday is typically the highest-grossing day of the year for US bars and restaurants. In 2018, in comparison to the average day, beer sales grew an astounding 174% on St. Patrick's Day, and Spirits sales rose 153%.”
Interestingly, the financial impact of St. Patrick’s Day extends far beyond US borders, according to MSU’s data. “In Ireland, the holiday is a major economic driver, with the tourism sector benefiting from the influx of visitors attending Dublin’s world-famous parade. It’s estimated that St. Patrick’s Festival contributes over $50 million to the local economy each year. Similarly, Canada and Australia experience a significant economic boost as well, with bars, restaurants, and retailers cashing in on the themed celebrations. Cities like Toronto and Melbourne host large-scale parades, drawing thousands of visitors and contributing millions in revenue to their economies.”
So it’s clear that not just US F&B manufacturers and suppliers need to think ahead and be ready for these holiday-related surges in demand, but global manufacturers/suppliers as well. Imagine the damage to the tourist industry and local economy that could be caused by a shortage of beer and liquor on this holiday. It is almost too scary to think about.
It’s important to note that the size of your business can have a significant impact on how seriously you may be affected by shortages due to holiday-related, increased demand or breakdowns in the supply chain. For example, the Federal Trade Commission’s report on grocery supply chain issues highlighted how supply chain disruptions during the pandemic disproportionately affected smaller firms, which struggled more than larger counterparts to obtain products. This can be due to many factors, such as non-diversification of suppliers and manufacturers for key products. Larger firms may have greater resources or more experience in surviving periods of increased demand and/or reduced supply, while smaller firms might not have a suitable buffer to absorb or support these periods of feast and famine.
Holidays can exacerbate existing labor shortages and related issues within the F&B manufacturing/supply sector. The demand for additional workforce during peak holiday seasons can sometimes meet in a perfect storm with the lack of available skilled labor, potentially leading to business-killing operational bottlenecks.
Anyone who has run a business with employees knows that holidays can be simultaneously the most profitable days of the year, and the most difficult to maintain a full staff or obtain additional seasonal workforce, since nearly everyone wants to take the big holidays off from work.
Toast points out that the annual Mother’s Day/Father’s Day busy season “is great for restaurants to turn a profit, but it also comes with challenges. Most notably: staffing. Seasonal changes lead to new customers and finding restaurant employees to meet the boom in customer traffic is essential. Even more importantly, restaurant owners must create strong staff engagement to keep up morale and ensure they don’t lose staff during the summer months.”
For any F&B manufacturers or suppliers that rely heavily on seasonal employees, it’s vital to optimize staffing resources and diversify their sources for obtaining additional help. Thinking forward even a couple of weeks can make a difference when other manufacturers are scrambling at the last minute to cover shifts.
The annual US winter holiday season places immense pressure on transportation networks. Increased freight volumes, coupled with potential weather disruptions, can lead to significant delays. Some reports estimate that 15% of US shipments were delayed in 2024, with disruptions in major choke points like the Panama Canal contributing to these delays. Such delays can result in stockouts and missed sales opportunities for manufacturers.
Newl points out some ways holiday-related shipping delays occur:
Since the annual winter holiday season coincides with typically nasty weather (at least in the northern hemisphere/US), extreme weather events are increasingly impacting the F&B manufacturing/supply sector, causing delays, damaged goods, and logistical bottlenecks. Whether it’s heavy snowfall stalling trucks on major US roadways, or hurricanes closing ports or seaways, unpredictable weather can be a huge factor during the critical holiday season. Supply chain disruptions often force ill-prepared organizations to perform a last-minute scramble to find alternative routes or faster shipping methods, which naturally leads to huge increases in cost and shrinking profits, despite the windfall of greater customer demand.
The F&B manufacturing industry isn’t immune to price volatility or shortages of key raw materials. For example, sugar shortages, termed “sugarflation,” can increase costs for manufacturers of candies, baked goods, and beverages preparing for the annual winter holiday rush.
Food Logistics points out, “The sugar shortage is primarily driven by a convergence of factors that have disrupted the global sugar market. According to Pawan Joshi, EVP of products & strategy for e2open, reports cite that the rising threat of El Nino’s weather could reduce sugarcane yield by 10-15% globally, leading to higher prices for the lower supply. Sugar shortages could become a valid concern given that the US agriculture policy requires at least 85% of US sugar purchases to come from domestic processors, so when demand rises, prices spike and supply tightens.”
The report explains how sugar shortages can have far-reaching implications for various F&B manufacturers and supply chains, particularly during or in preparation for the holiday season:
This is just one example of how price fluctuations on a single key raw material or ingredient can squeeze profit margins and force F&B manufacturers to adjust pricing and/or supply strategies.
Holidays can sometimes coincide with increased regulatory scrutiny, depending on several factors, including election cycles, holiday-related media coverage, and random social events. All US F&B manufacturers must ensure compliance with food safety standards, labeling requirements, and other regulations at all times. However, during the peak production cycles related to major holidays or holiday seasons, compliance and review processes can become resource-intensive and things may start slipping through the cracks. Partial or non-compliance can lead to product recalls, customer illness or injury, legal liabilities, and damage to brand reputation, any of which can potentially kill a brand or an entire company.
To help navigate the challenges related to major US holidays and holiday seasons, F&B manufacturers and suppliers should consider adopting the following strategies:
Advanced demand forecasting: Utilizing data analytics to predict consumer demand patterns more accurately can help in better S&OP and inventory management.
Flexible workforce management: Implementing flexible staffing solutions can help address labor shortages and ensure smooth operations during peak periods.
Diversified transportation/logistics networks: Engaging multiple logistics partners and developing alternate routes beforehand can help alleviate pressures and costs associated with holiday transportation delays.
Strategic inventory planning: Maintaining buffer stocks of critical raw materials (as well as curating alternative suppliers in advance) can help protect against supply chain disruptions.
Regulatory compliance training: Regular staff training sessions on regulatory requirements, as well as proactive hiring of any related staff in advance of demand, can ensure adherence to required standards and prevent compliance-related issues when under increased pressure during major holiday periods.
The ORI Excellence Platform is the only software and AI tool purpose-built to help you achieve top-tier sales and operations planning and execution in one place. Reduce risk, manage uncertainty, and increase resilience with ORI.
Get a free demo and find out how ORI’s 30 years of experience and best-in-class technology can help you.