Maintaining sugar supply to industry through global challenges

So far, the second decade of the 21^st century has brought the COVID-19 pandemic, global weather events, wars, energy crises, issues with transport logistics and now an economic downturn. The result for the food industry is disruption that causes uncertain and unreliable supply of food and beverage ingredients. Choosing supply and distribution partners who can guarantee continuity, delivering products on time, on spec and in full, is more important than ever.  

Lockdown led to many well-documented challenges. On the supply side, there was supply chain and primary production disruption caused by many factors. Global logistics suffered from closed ports, ships and containers in the wrong place, and ships laid up. With workers either forced to stay at – or reluctant to leave – home, primary agricultural products, including sugar, were not harvested, or made their way too slowly to distribution centres and ports. In the UK, Brexit disruption had been the harbinger of what supply chain fragility could look like. Covid was the icing on the cake.    

On the demand side, in the UK we saw a 31% increase in demand for bakery and confectionery goods, particularly chocolates, coupled with a massive fall in demand for food products associated with food service. So, on the one hand, some food factories were running at full capacity to supply demand, while others shut because they couldn’t get raw materials. At the same time, goods without a market were filling warehouses. When those warehouses were full, the option was more storage – which itself was in limited supply and expensive – or shut the production lines.  

Once shut down because of overstocks, a production line or plant can’t just be switched back on. It takes weeks, sometimes months, to recommission production. This lost production represents capacity that can never be replaced – you can’t go back in time. That has a knock-on impact for future stocks and production, often resulting in more shortages. Another UK-specific uncertainty has been the complications of customs post-Brexit, introducing delays and, in some cases, export markets disappearing because the customers in the European Union have found replacement suppliers for their UK-sourced goods.      

Shortly after the worst of the pandemic, there was a global increase in energy prices, in particular natural gas, and the war in Ukraine. Global wholesale energy costs had been increasing before Russia invaded Ukraine. Gas is a feedstock for both energy production and many industrial processes, including fertiliser production. Gas also powers the plants.   

The invasion pushed up energy – and natural gas – prices further. Fertiliser is much more expensive, and as Russia is a major fertiliser producer, this has impacted on both supply and costs. As a result, commodity prices have rocketed. 

The labour market has also changed. Global inflation has driven up labour costs. In some countries, such as the UK, we’ve seen the phenomenon of the ‘great resignation’, alongside accelerating baby boomer retirement. In the UK, the number of economically inactive members of the population is at a record high. Those workers that are available for agriculture and the food and beverage industries are more expensive.   

And finally, we come back to distribution disruption, but from a different source. The problem of containers being in the wrong locations is largely fixed. What’s in short supply now is tonnage capacity – there aren’t enough ships to move goods around. This is because of huge demand from India, China and Russia. Russia is exporting oil and wheat to China and India, who are sending cars and other goods back. Russia is also exporting wheat to Africa. Not all countries have signed-up to the embargoes on Russian trade.         

A complex range of raw materials supply and costs, labour supply and costs, production capacity and cost, storage availability and cost, and distribution capacity and cost, have hugely increased commodity prices, including wheat, food oils and sugar.    

Any businessperson knows that customers are the most important part of every business. That makes customer service either an organisation’s biggest strength or its biggest weakness. As a food and beverage manufacturer, it is not unreasonable to expect your supply partners and distributors to guarantee in time, on spec and in full delivery throughout challenging times. 

At Ragus, we’ve built our identity on what our customers experience, which is underpinned by our products and our consistent and reliable customer service. While there will always be factors we can’t control – the weather, industrial strikes or transport blockages, for instance – contingency planning and risk management, good relationships with our team, our own suppliers and making sure we choose reliable transport providers means we minimise the risk of letting our customers down.  

While today’s perfect storm of disruptions may seem unprecedented, history tells a different story. Ragus has kept the sugar flowing throughout the second world war and the 1978-1979 ‘winter of discontent’, when strikes by transport workers had a massive impact on supplier deliveries across the whole food and beverage industry. Our competitors’ drivers, who were all unionised, stopped driving and their refineries and factories ground to a halt. Our strong relationships with many of the UK’s leading food businesses meant we could step in where they – and other suppliers like them – had stepped out. 

Because we provide pure sugars in bulk, we deliver, source and manufacture large quantities of sugars and syrups from all over the world. We are responsible for managing the sugar supply chain from mill to our customers’ factories. We’re a family business with four generations of industry expertise, and everyone who works here mines from that combined experience every day. Over the last 95 years, we’ve developed an instinctual knowledge of how to be one of the most reliable suppliers in the industry.  

Close attention to detail and clear communication are at the top of the list today, as they were nearly a century ago. Our customer services team is in constant contact with their colleagues throughout our business, so they know exactly what’s possible and when. That means they can schedule orders meticulously, and constantly flex their priorities aiming to ensure our customers get what they need, when they need it. 

Our ultimate aim is to take any pain out of our customers’ experience with us, by taking it on ourselves. That means that we fix any issues with procuring, storing or transporting your pure sugars before you know about them, enabling us to set a target of, and giving you, 100 percent on time, in-full tanker deliveries. 

We exist to provide bulk sugars to industry. For us, there’s simply no point to what we do unless we have the secure supply lines and infrastructure that enable us to guarantee that we’ll deliver precisely what we promise. 

All the way from the mill to your facility’s gate, from order placement to offloading, we manage orders to make sure our products meet our customers’ expectations, because we’ve invested in the infrastructure, systems and people to make sure of it. 

Ragus has been consistently and reliably supplying high-quality pure crystalline sugars and sugar syrups to industrial food and beverage producers for 95 years. To learn more about our pure sugar products, contact a member of our Customer Services Team. For more sugar news and Ragus updates, keep browsing SUGARTALK and follow Ragus on LinkedIn.