White House trade and manufacturing advisor Peter Navarro discusses the administration effort, a possible executive order, to shift U.S. dependency for critical health sector and pharmaceutical products back to domestic production.  [Important Discussion]

Based on increasingly panicked statements from local officials, yesterday it became more likely that government officials were going to take extreme measures.

Moments ago Illinois Governor  J.B. Pritzker held a press briefing and announced the mandatory closure of all restaurants and bars across the entire state.

“I am ordering all bars and restaurants in the state of Illinois to close to the public as of the close of business, Monday night, March 16th through March 30th.

We are working with restaurant owners and food delivery services across the state to see if restaurants can safely keep their kitchens open so the restaurants can keep the food delivery to people at their homes.  Additionally, we are allowing drive-through and curbside pick-up for restaurants to serve the public through this period”… (link)

Earlier this afternoon President Trump and Vice-President Mike Pence held a teleconference with a who’s-who of executives within the U.S. grocery supply chain.

[Per the White House] “Today, President Donald J. Trump held a telephone call with more than two dozen grocery store and supply chain executives from across the country. The President thanked them for the work they have already done to meet the needs of the public and for their continued commitment to the communities they serve.”

“All of the executives are working hand-in-hand with the Federal Government, as well as State and local leaders, to ensure food and essentials are constantly available. The President reminded the participants that this is an all-of-America approach and each of their stores and the stores they support can help Americans feel calm and safe when shelves are stocked with the items they need.”

“Supply chains in the United States are strong, and it is unnecessary for the American public to hoard daily essentials. The President thanked the executives for their close partnership and pledged to stay in close communication.” (read more)

Trump Administration: President Donald J. Trump, Vice President Mike Pence, Secretary Steven Mnuchin, Department of the Treasury; Secretary Sonny Perdue, Department of Agriculture; Larry Kudlow, Assistant to the President and Director of the National Economic Council; Tim Pataki, Deputy Assistant to the President and Director of the Office of Public Liaison

External Participants:

♦ Dave Clark, Senior Vice President, World Wide Operations, Whole Foods Market

♦ Mark Clouse, CEO, Campbell Soup Company

♦ Brian Cornell, CEO, Target

♦ Mike Duffy, CEO, C & S Wholesale Grocers

♦ Randy Edeker, Chairman, CEO, and President, Hy-Vee

♦ Geoff Freeman, President and CEO, Consumer Brands Association

♦ Greg Ferrara, President and CEO, National Grocers Association

♦ Grant Haag, President and CEO, Winco Food

♦ Jeff Harmening, CEO, General Mills, Inc.

♦ Jason Hart, CEO, Aldi USA

♦ Kevin Holt, CEO, Ahold-Delhaize USA

♦ Kevin Hourican, President and CEO, Sysco

♦ Anthony Hucker, President and CEO, Southeastern Grocers

♦ Craig Jelinek, CEO, Costco

♦ Todd Jones, CEO, Publix Super Markets

♦ Laura Karet, President and CEO, Giant Eagle, Inc.

♦ Rick Keyes, CEO, Meijer

♦ Donnie King, Group President and Chief Admin Officer, Tyson Food

♦ David MacLennan, Chairman and CEO, Cargill, Inc.

♦ Rodney McMullen, CEO and Chairman of the Board, The Kroger Co.

♦ Doug McMillon, CEO, Walmart

♦ Miguel Patricio, CEO, The Kraft Heinz Company

♦ Gregg Roden, Senior Vice President, PepsiCo North America Supply Chain

♦ Vivek Sankaran, President and CEO, Albertson’s

♦ Leslie Sarasin, President and CEO, Food Industry Association

♦ Steven Spinner, Chairman and CEO, United Natural Foods, Inc.

♦ Peter Van Helden, CEO, Stater Bros. Markets

♦ Todd Vassos, CEO, Dollar General Corporation

♦ Rob Vitale, President and CEO, Post Holdings, Inc.

♦ Colleen Wegman, CEO, Wegmans

Treasury Secretary Steven Mnuchin appears on ABC news where Jonathan Karl demands the U.S. Treasury Secretary should collapse the economy.  Pathetic and desperate Mr. Karl wants a recession almost as much as he wants the job to replace Stephanopoulos.

This interview is a case study in TDS.  The media are addicted to selling a resistance narrative.  Coronavirus is to media like crack cocaine is to an addict.

Instead of taking the opportunity with the Treasury Secretary to explain what measures are in place to help businesses deal with financial assistance, and have Mnuchin outline what procedures are in place for them to follow, the media waste ten minutes constructing their anti-Trump narrative for an audience.  It is ridiculous.

Right now, today, the retail food supply-chain is trying to recover from previous panic buying. Across the nation grocery stores are wiped out. Warehouses are emptying trying to replenish the stores. The upstream suppliers are trying to resupply the warehouses.

Supermarkets are closing early and opening late while trying to stem panic and fulfill customer demand.  Now is exactly the wrong time to limit food choices and push more people into those retail food stores.

No advance notice. No time to prepare or plan… just an immediate order.

Imagine what will happen tomorrow morning in Ohio and Illinois at grocery stores.

Notice these orders from short-sighted governors are in effect almost immediately. Meaning no-one has had the time to prepare for this type of a disruption in the total food supply chain.

These governors do not have any experience, policy framework, or previously established state-wide systems (having been tested through experience) for a process of rapid food distribution as a result of a state emergency. They are flying by the seat of their pants, and taking advice from the wrong people with the wrong priorities and the wrong frame-of-reference.

A government cannot just shut down 30 to 50 percent of the way civil society feeds themselves, without planning and advanced preparation for an alternative. Those who AREthe alternative, the retail food grocers, need time to prepare themselves (and their entire logistical system) for the incredible impact.  Without preparation this is a man-made crisis about to get a lot worse.

Some states have emergency food distribution and contingency plans. Those states are hurricane prone states; and those states have experienced the intense demand on the food distribution system when restaurants are closed and people in society need to eat.

Those states have, by necessity, developed massive logistical systems to deal with the food needs of their citizens. These current short-sighted states are not those prepared states.

Any governor who shuts down their restaurant industry without a civil contingency plan is being incredibly, catastrophically, reckless. It really is a terribly dangerous decision.

Any policy that drives more demand, when demand is already outpacing supply, is a bad policy. This is the food supply chain we are talking about. This is not arbitrary stuff being discussed. This supply chain is critical.

People freak out about access to food.

For the past 20 to 30 years there have been exhaustive studies on the growth of the restaurant sector.  It has been well documented that as the pace of society increased, as efficiencies and productivity increased; and as less of the population learned how to cook and prepare meals; approximately 30% of retail food growth dropped.

Multiply the impact of lower food shopping over all those years.  More Americans eat at restaurants now.  Depending on the area, there are estimates that fifty percent of all food consumed is from “dining out” or “food consumed outside the home.”

Most of the current panic shopping is because people are preparing by buying weeks worth of food products.  Closing restaurants will only magnify that panic shopping.

If state officials are going to make these decisions, they need to coordinate closely with the retail grocers and food outlets in their states. The decision to shut down restaurants must be very closely coordinated and timed with a civil society need for alternatives.  Those providing the alternatives need time… not much time…. but they need time.

This is exactly the wrong time to shut restaurants and put additional pressure on a national food supply chain that is trying to meet overwhelming demand.

Either these officials are intentionally trying to create civil unrest, or they are just inexperienced politicians without the ability to think through the logical conclusions to their mandated orders.  I’m not sure which it is.  However, regardless of intent or stupidity, these types of knee-jerk decisions will harm more people than the virus itself.

Drive-thru and curbside services will not work.  Yes, McDonalds and similar do and can provide drive-thru services… but they are not designed for exclusive “drive-thru” services.  Approximately eight percent of all daily fast-food comes from McDonalds imagine a line of cars a mile long for a drive-thru hamburger.   Then imagine that car, after waiting four hours in that line, orders a month’s worth of hamburgers….  and then that supply chain collapses….  See, it ain’t that simple.

These decisions create the snow-ball effect…

Most restaurants are not not set-up for immediate delivery…. Yes, all of these challenges can and will be overcome; restaurants will limit their curbside products, fast food will put a limit on orders, kitchens will modify to adjust to the work-flow, etc.  However, it takes a time to prepare for these necessary shifts and changes.

A more prudent step would be for state officials to provide mitigation directives, simple and prudent changes, during a phase that allows restaurants to adapt:

• Position all tables 6 feet apart.
• Provide single use condiments and utensils.
• Provide disinfecting wipes at the front door and on tables.
• Limit the opportunity for virus spread by modifying the consumer engagement.

These types of dining out measures can be prudent and allow for the mitigation of the virus without spreading wide-scale panic that only worsens the issues for alternative options.

Arbitrarily shutting down restaurants, effective immediately, is not a good idea and will only increase the panic and anxiety…. Then again, maybe that’s the goal.