When the Mercedes-Benz Stadium in Atlanta re-opened to some fans for soccer and football games late last year, Angela Todero, associate director of operations for Mercedes-Benz Stadium, did what she could to make sure that they were both fed and safe. The food she offered was determined not by available food items, but by packaging for it.
"We went for a reduced menu knowing that there weren't many options for the closed clamshell product available to us," Todero said. "We saw what our suppliers had that they were able to get easily. That dictated what we were going to use for the season."
With sports arenas, concerts and even Broadway shows opening to audiences again this year, packaging for customer food and drink is changing to make those fans and patrons feel safe, even if the demand on supply chains is still leading to longer than normal lead times for materials.
Suppliers flip the switch off, then on again
Many types of specialty packaging suppliers welcomed the re-openings after a rollercoaster 2020.
"Our business really took a dramatic tilt," said Tad Dacus, central U.S. sales manager for Southern Champion Tray, whose primary business is making food trays for everyone from professional sport league stadiums teams to high schools. "It's almost like you flipped a switch off." Its food tray business dropped 85% in April 2020 compared to the same time a year before.
That doesn't mean the company wasn't busy. Southern Champion Tray purchased land last spring for another 1 million-square-foot build-out.
It switched over to making containers for the sudden demand in take out and to-go containers, even if it was challenging because "doing that requires a certain amount of equipment," Dacus said. "How do we maximize the equipment for the day? You don't just throw in cutters and gluers overnight. That takes time."
"We saw what our suppliers had that they were able to get easily. That dictated what we were going to use."
Associate director of operations for Mercedes-Benz Stadium
The company also hit snags in ordering materials and passed on contracts it knew it couldn't fulfill. For example, molded fiber drink carriers became an in-demand item during the pandemic, but the materials were difficult to source. When a major national fast food chain put out a bid for a molded fiber drink carrier contract, "nobody would touch it because nobody could meet that demand," said Dacus, who declined to name the chain.
"It's not a question of whether or not supply chains are going to be disrupted," he said. "It's really going to be how we manage it best."
The company's stadium tray business still hasn't bounced back. Instead, he said those customers are buying hinged containers.
"Everything has to be covered. We're hoping our travel trays can help fill the gap for food trays during this time," Dacus said.
Texas storm adds to sourcing struggles and lead times
It's not just the lingering effects of the pandemic, or the spike in demand as arenas re-open, that has the supply chain muddled, Dacus said. Manufacturers were digging out from supply chain disruptions caused by the 2018 China tariffs when the pandemic hit, and they're still dealing with the fallout of Texas' winter storm.
How would that affect paperboard? Because of the coating that prevents a full cup from disintegrating.
"The petrochemical sector supplied the latex involved with adhering that paperboard," Dacus said.
The February storm shut production at most Gulf Coast refineries, petrochemical plants and steam crackers, which account for 80% to 85% of all U.S. polyethylene and polypropylene production, according to PlasticsExchange. Shutdowns of transportation and supply chain networks in Texas, including the Port of Houston, rail services, resin warehouses and highways, didn't help either.
"That extended lead time across the board with all paperboard substrates," Dacus said.
Where lead times for materials had been four to six weeks, Dacus said he's being told by the mills he works with to anticipate up to 16 weeks. "Whether that happens or not, we don't know. We're preparing for that."
Making packaging for the moment
Major League Baseball games have opened up to fans again this spring, with concessions coming as enclosed and covered as possible. Natha Dempsey, president of the Foodservice Packaging Institute sees demand for events with crowds — and the concessions that go along with them — at a tipping point.
"There is a lot of pent-up demand for events, travel, and other pre-pandemic activities," Dempsey wrote in an email. "We believe there may be some apprehension at first as we are exploring this 'new normal' but, similiar to airlines right now, guest safety and comfort will be dependent on the venue and the accommodations/processes/procedures that are in place."
Where lead times for materials had been four to six weeks, Dacus said he's being told by the mills he works with to anticipate up to 16 weeks.
Todero has an eye as to how spring and summer events go, and what that will mean for fall sports.
She wants to offer a full menu again, and is asking vendors to give her more than just clamshells because "they don't leave that much in the way of space," she said. "You're not going to be able to hold that much in those windows, and with the volume that we push out during half time, we're going to get pretty creative in how we're going to keep servicing fans at those peak times."
She's also looking for as many compostable materials as possible. The Mercedes-Benz Stadium is LEED certified and is working towards being a zero waste facility. "It's one of our initiatives, and we're doing everything we can to maintain that," she said.
The pandemic experience has made her rethink how the stadium does business overall. "As stressful as it was going through it, everyone just had to take the time to consider what can we do, what are our options, how can we enclose all of our products and keep everything wrapped so there's no getting to it," Todero said. "It kept us thinking forward and moving forward."
This story was first published in our weekly newsletter, Supply Chain Dive: Procurement. Sign up here.