Now that world trade has become a bit more uncertain, we found ourselves in the middle of manufacturing partners or growing brands asking us if we could help them diversify their supply chain to reduce the risks.
We were in the same situation right after we launched Chapter Foods a year ago because of the sudden tariffs. But this time we’re more agile and have more resources and network to have the answers.
When you look at the current state of global trade, it’s clear that we’ve moved into a period of deep volatility. As the conflict in the Middle East soars, we’re seeing exactly how fragile the systems we rely on truly are. It’s easy to think of a regional conflict as something distant, but for anyone making food, it hits home immediately. The CPG industry is often one of the first to feel these shocks, acting as a sort of early warning system for the rest of the world.
The main bottleneck right now is the Strait of Hormuz. It’s a narrow waterway, but it carries 20% of the world’s oil and 20% of its liquefied natural gas. When that flow slows down or stops, the ripple effects are massive. For a food or beverage brand, this means the price you pay for sugar, cocoa, sweeteners and many more ingredients are physically stuck behind a geopolitical chokepoint.
Finding a cheaper supplier is no longer the most logical approach. That era of optimization is being replaced by a need for a more aggressive and comprehensive strategy to secure supply. To stay on top of the chain, you have to diversify by region and size to avoid single points of failure. Increasingly, this means moving toward “friend-shoring” or reshoring production entirely to maintain some level of control.
In a world that feels increasingly unpredictable, the brands and manufacturers who’ll thrive will be the ones that are most decisive about reinforcing their supply networks.
That’s it for this week.
If you’re building something in CPG and need the right supplier or co-manufacturer to make it happen, Chapter Foods can help. We match brands, brokers, distributors and retailers with partners who are ready to move.
And if you’re a manufacturer looking to unlock new business or source higher-quality ingredients, we’re your direct line to the right buyers and better suppliers.
Can Koyuncu, Co-Founder & CMO