Hurricane wake-up call for business and boy scouts

Related tags Louisiana New orleans Hurricane katrina

Louisiana was holding its breath when Hurricane Gustav made landfall last week. It promised to be the mother of all storms as it roared towards the Gulf Coast but fortunately the region, along with the food industry it supports, was spared.

However it has hammered home the old boy scout motto: “Be prepared”, a lesson that you are never too old to learn as there is always a disaster waiting to happen.

The memory of Hurricane Katrina is still ripe in New Orleans. When it struck in 2005 hundreds of lives were lost, it caused billions of dollars worth of damage, local industries including sugar and grain were shut down and countless homes were destroyed.

Last week, with Gustav on its way, residents were evacuated, businesses closed, the city’s new improved defenses came into their own and nothing was left to chance.

So when major players in the food industry find that they are caught out by Mother Nature, to me it is another way of saying that too much has been left to chance.

We all know that floods, droughts and hurricanes will happen, even if we can’t say when exactly, which makes it all the more important to prepare for the worst.

To reveal that your business has been left at the mercy of the elements sends a disconcerting message to consumers, customers, suppliers and shareholders. Although it is true that the forces of nature are a problem that won’t go away, how they are managed makes all the difference.

And if prevention is not an option, then limiting disruption has to be the next best thing.

In June record floods threatened this year's harvest in the Midwest. In the Cedar Rapids area of Iowa, which is North America's top producing corn state, companies including Cargill, ADM, Penford, Quaker and Swiss Valley Farms were forced to close their plants.

ADM’s operations were shut down for seven-day, but it used trucks to stand in for rail services which were disrupted to provide uninterrupted supply, and by the first of July it was back online.

Meanwhile Cargill has several operations in Cedar Rapids, but it was the company’s corn milling complex near the Cedar River that was hardest hit during the floods. This is not expected to be back up and running until October.

A tool kit of measures can be used to shore up defenses and manage risk, as the threat of Hurricane Gustav demonstrated.

The McIlhenny Company, which makes Tabasco, said last week that its Avery Island plant lay directly in Gustav’s projected path. Fortunately the hurricane weakened before making landfall west of New Orleans last Monday.

However McIlhenny’s plant was built to withstand 140 mph winds and the company has also completed several major defense projects following Katrina, including a levee which can stand up to an 18 foot storm surge in the area.

Food conveyor manufacturer Intralox was another company that could not brush aside the impact of Katrina. Its back-up customer service center and alternative assembly line were ready for action, along with back-up IT sytems in case Gustav’s full force was felt.

Hurricanes have also taken their toll on Florida, the "epicenter” of the citrus fruit world, and destroyed acres of crops. As a result, companies are beginning to look elsewhere.

Symrise recently moved its citrus operations to Brazil, where it said such concerns don’t really have an impact. Commenting on the move, Blake Anderson, president of Symrise's North America flavor division, said that ingredients companies may well seek more consistent sources of citrus fruit outside of the US to compensate for Mother Nature. And companies are looking at diversifying to make sure they are covered in case there is a problem.

Even the best preparations can't change the forecast, but they can temper the impact. So when companies are caught out by events that are “beyond their control”, I can’t help wondering why they apparently forgot the first principle of being a scout: "Be prepared."

Sarah Hills is the senior reporter at FoodNavigator-USA.com. If you would like to comment on this article please email sarah.hills 'at' decisionnews.com.

Related topics Market Trends Views

Follow us

Products

View more

Webinars