Is There a Funyuns Shortage in the U.S.? Intermittent Shortages

Mohit Oberoi, CFA - Author
By

Jan. 26 2022, Published 8:45 a.m. ET

Over the last two years, consumers have gotten used to empty shelves at stores. From snacks to cat food, many products have been in short supply. Is there a Funyuns shortage in 2022?

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Apart from food products, there has been a shortage of several other products including semiconductors, motor oil, and packaging materials. The supply chain woes that started in 2020 only amplified in 2021. So far, 2022 doesn't look any better and the fast spread of the omicron variant of the COVID-19 virus has put even more strain on global supply chains.

Consumer packaged goods are in short supply.

According to the Consumer Brands Association, half of Americans have reported product shortages. Around 12 percent of total CPG (consumer packaged goods) are in short supply, which is higher than the 7 percent–10 percent range in normal times. The situation is even worse for food and beverages, and 15 percent of these were out of stock in the third quarter of 2021.

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The Association said that CPG demand rose 8.3 percent in the third quarter of 2021, which was higher than the corresponding quarter in 2020. It also said that the CPG industry added about 12,000 jobs in the quarter while a whopping 130,000 jobs were open.

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The CPG industry seems to be suffering from an acute labor shortage. The shortage of drivers has also amplified the problem.

Who makes Funyuns?

Frito Lay, which is a subsidiary of PepsiCo, makes Funyuns. In 2021, the company announced a $200 million investment to add two manufacturing lines to produce Funyuns and tortilla chips at its Texas plant. The company also said that it would increase the warehouse capacity to meet future demand.

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Is there a Funyuns shortage?

There doesn't appear to be a nationwide shortage of Funyuns and they're widely available on Amazon. However, if you try to shop for Funyuns on the Frito Lay website, it says, “We're working diligently to keep products readily available to our consumers. Even if a product shows available in our locator, the product may not be on-shelf. We recommend either ordering via grocery delivery or calling your local store to verify.”

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There might be intermittent shortages of Funyuns products at some stores. However, there isn't a severe shortage as is the case with some of the other packaged food products like baby formula.

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In the last two earnings calls, PepsiCo didn't talk about the shortages of any of the Frito Lay products. However, the company did say that snack demand is growing at a fast pace in the U.S. Apart from the hybrid work model, increased mobility is also fuelling a demand for snacks.

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Some Funyuns flavors were discontinued.

Currently, Funyuns are available in two flavors. The first one is the original onion-flavored rings, while the second flavor is the Flamin Hot flavored rings. The original flavor has been around since 1969 and the Flamin Hot flavor was introduced in 2007.

Frito Lay launched Chile & Limon and Steakhouse Onion flavors but they were eventually discontinued amid tepid demand.

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