Why Is Cream Cheese Flying Off the Shelves in the U.S.?

It's a common sight to encounter empty shelves in grocery stores these days. The U.S. is facing a shortage of many food items. While there isn't a widespread food shortage across the U.S., certain areas are experiencing a strain. Some items like turkeys, pet food, Lunchables, juice boxes, bottled water, and cream cheese have been impacted by the shortage. Why is there a cream cheese shortage in the U.S.?

Is the food shortage serious enough for us to worry about and should we be stockpiling? The answer is absolutely not. In fact, hoarding will make the situation worse.

While part of the shortage is due to people hoarding ahead of the holiday season, a large part of the shortage isn't due to hoarding. Supply-side constraints have been impacting the supply of many food items. As economies recovered from the COVID-19 pandemic lows, the demand for most of the items came roaring back. This happened even though the supply side wasn't fully ready to respond. Logistical and transportation issues led to localized shortages of many things, including cream cheese.

On the demand side, Americans cooked at home more during the pandemic, which also led to a considerable rise in sales of retail cheese. The cream cheese market is driven by an increase in the consumption of fast-food products including burgers, pizzas, and other products. These products were staples for cooking at home during the pandemic. Cream cheese is a good topping for crackers, bagels, and sandwiches. The expansion of quick-service restaurants also bolstered the demand for cream cheese.

According to Dairy Foods, citing data from Chicago-based IRI, natural cheese retail sales jumped 15.8 percent to $15.3 billion during the 52 weeks ending September 6, 2020. Even though the pandemic is showing signs of abating, home food preparation habits haven't seen a significant change.

CNN reported in March that Costco and other retailers are facing a cream cheese shortage along with other items including olive oil and seafood. Along with the usual supply-chain issues, the shortage of shipping containers impacts the supply of cream cheese. According to retailers, some large ports on the West Coast like Los Angeles and Seattle are facing bottlenecks, which is creating issues in securing merchandise for consumers. Another problem that's making the shortage issue worse is the shortage of truck drivers for inland travel.

An additional short-term issue impacting the cream cheese supply is the cyberattack on Schreiber Foods. It's one of the world’s largest suppliers of cheese and other dairy products, based in Wisconsin. The attack impacted the company's plants and distribution centers. However, the company has made progress in resolving the issue and part of its operations have started again.

While this issue might have resolved, the overall supply chain issues aren't expected to go away anytime soon. This should keep the lid on supply even though the cream cheese demand remains high.