From Chocolate to Fish Sticks: How Supply Chain Chaos Threatens Legacy Brands – and the Smart Solution That Can Save Companies Now!
The Importance of Stable Supply Chains in the Confectionery Industry
The confectionery industry is highly dependent on the availability of specific raw materials such as cocoa, sugar, and dairy products. These materials are often sourced globally, making supply chains vulnerable to various risks, including geopolitical tensions, price fluctuations, and logistical challenges. Any disruption can not only impact production but also harm brand reputation and consumer trust.
Case Studies: The Impact of Supply Chain Disruptions
1. Halloren Schokoladenfabrik AG and the Termination of Its Partnership with Lidl
Halloren Schokoladenfabrik AG, Germany’s oldest chocolate factory, was forced to end its business relationship with Lidl in 2024 due to disagreements over rising cocoa prices. While raw material costs increased significantly, Lidl was willing to absorb less than 20% of these additional expenses. This pricing conflict led Halloren to halt deliveries, which had immediate economic consequences: 280 employees were placed on short-time work. This case highlights how sensitive pricing negotiations and cost distribution can directly affect the stability of supply relationships.
2. Iglo and Its Dependence on Alaska Pollock
Iglo, best known for its fish sticks, faced serious challenges in 2024 due to its reliance on Alaska pollock, much of which is caught in Russian waters. Amid growing geopolitical tensions and potential EU sanctions against Russia, the company’s supply security was at risk. While Iglo attempted to source fish from alternative suppliers, these options were more expensive and insufficient in volume. Additionally, negative contamination test results on certain products led to reputation damage and declining sales. This example demonstrates how geopolitical risks and quality issues can disrupt supply chains and damage brand trust.
Economic and Reputational Consequences of Supply Chain Disruptions
The case studies above illustrate the widespread effects of supply chain disruptions:
- Production Halts: Shortages of raw materials lead to factory shutdowns and direct revenue losses.
- Reputational Damage: Quality issues or supply shortages erode consumer trust and damage brand perception.
- Financial Strain: Additional costs from alternative sourcing or contractual penalties for unfulfilled orders threaten financial stability.
- Job Insecurity: As seen with Halloren, production slowdowns can lead to short-time work or layoffs, impacting employee morale and retention.
Preventative Measures and Risk Management
To mitigate risks, proactive supply chain risk management is essential. Companies must regularly analyze their supply chains to identify potential vulnerabilities and weak points, allowing them to anticipate and address disruptions before they escalate. Developing supplier diversification strategies is crucial in reducing dependence on a single source, ensuring that alternative options are available when supply shortages or geopolitical tensions arise. Additionally, enhancing transparency across the entire supply chain enables businesses to react quickly to changes, providing them with the agility needed to maintain operational stability. By implementing these strategies, businesses can adapt to disruptions before they become critical threats, safeguarding both their financial health and long-term competitiveness.
BISS/CAIGO: A Smart Solution for Effective Supply Chain Management
BISS/CAIGO is a cloud-based risk management platform that helps companies maintain transparency and resilience in their supply chains. Key Features of BISS/CAIGO:
- Risk Profile Analysis: Automatically generates risk assessments for suppliers using customizable models.
- Supplier Management: Enables detailed risk tracking and response planning for each supplier.
- Questionnaire Module: Creates supplier evaluation surveys, with automatic translations in 31 languages.
- Action Manager: Efficiently manages preventive and corrective measures for identified risks.
- Complaint Management: Implements confidential reporting systems in compliance with EU regulations.
- Dashboard: Provides a real-time visual overview of supplier risk levels and supply chain health.
With BISS/CAIGO, companies can proactively identify risks, evaluate threats, and implement strategic measures to strengthen their supply chains. This not only ensures production continuity but also protects brand reputation and financial stability.
Conclusion
The confectionery and food industries are facing unprecedented supply chain challenges due to global risks. The cases of Halloren and Iglo demonstrate how vulnerable even established brands are to supply disruptions—and the far-reaching financial and reputational consequences. By adopting smart risk management solutions like BISS/CAIGO, companies can anticipate risks, improve supply chain resilience, and safeguard their long-term success. This helps minimize economic damage and prevent reputational loss—ensuring a secure, transparent, and intelligent supply network.
