The pandemic makes globalization harder : Planet Money : The Indicator from Planet Money Adnan Durrani loved sourcing ingredients from all over the world for his food company Saffron Road. Then the pandemic hit. Now Adnan is totally reconsidering the benefits of globalization.

Global food, local sauces

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SYLVIE DOUGLIS, BYLINE: NPR.

(SOUNDBITE OF DROP ELECTRIC SONG, "WAKING UP TO THE FIRE")

DARIAN WOODS, HOST:

When Adnan Durrani was a kid growing up in Pakistan, his family was famous for making this one dish - chicken biryani.

ADNAN DURRANI: My relatives still today make that biryani. And they do it on Fridays for the whole village.

STACEY VANEK SMITH, HOST:

And Adnan wanted to do the same thing but on an even bigger scale. So he started this company from his home, now in Connecticut. He makes these high-end microwavable meals - dishes from all over the world. Everything's halal and antibiotic-free. But of course, his favorite dish is the chicken biryani.

DURRANI: The aroma for it is just seductive. It's a delicious dish.

VANEK SMITH: Adnan called his company Saffron Road as a kind of a play on the Silk Road, the trade route that once went from China to the West.

DURRANI: The premium spice carried on that road was saffron. I thought, well, I want to do the Saffron Road project. I want to bring people together from different cultures, of different faiths, celebrating world cuisines of different cultures.

WOODS: And the chicken biryani really embodies this, along with all his other dishes - basmati rice and spices from India, chicken from farms in the U.S., Singaporean noodles, jasmine rice from Thailand. And because the global supply chain was so efficient, he could source them no sweat - at least up until a couple of years ago, when the global supply chain started to break down.

DURRANI: I said to myself, you know, we're too small a company to put ourselves out at risk like this.

VANEK SMITH: This is THE INDICATOR FROM PLANET MONEY. I'm Stacey Vanek Smith.

WOODS: And I'm Darian Woods. Globalization - it's the way we all do business. It's fast. It's cheap. We can get things from all over the world at the snap of our fingers. So is the story of Saffron Road as a sign that globalization might be on the decline?

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VANEK SMITH: For Adnan Durrani and his company, Saffron Road, the start of the pandemic was actually good for business.

DURRANI: You know, sometimes in life, it's better to be lucky than smart. And we got damn lucky.

WOODS: When Adnan first heard about this new virus discovered in China, he ordered his suppliers to make three times the usual amount of food. Instead of one month's worth of inventory, he decided he'd be more comfortable with three months, just in case anything went wrong.

VANEK SMITH: And when the pandemic hit the U.S. and we were all stocking our freezers full of food, Adnan's larger competitors had a lot of trouble getting their products to supermarket shelves. But Adnan, thanks to his early gamble, was able to meet the growing demand.

DURRANI: We were really getting our mojo. I mean, we were taking off. We picked up thousands of new consumers who'd never even heard of us before but, by default, had to buy us because we were on the shelf. So serendipitously, we got the windfall from that.

VANEK SMITH: 2020 was great for Saffron Road. Things were going really well. And Adnan was, you know, invited and starting to play in, you know, what you could kind of think of as, like, the big leagues of grocery - Costco.

WOODS: Selling more food to Costco would be huge for Saffron Road. But like so many other well-laid plans during the last couple of years, COVID interrupted.

So Saffron Road sells pre-made meals with ingredients from India, like their chickpea masala. And India started going into lockdown around March last year, which lasted for months.

DURRANI: So all of a sudden, everything stopped. All the production from there stopped. And that - you know, that was obviously devastating.

WOODS: It was one in a series of hurdles all around the world for Saffron Road. And Adnan had to tell Costco there were going to be huge delays.

DURRANI: Normally, if we tell them we can get your product in six weeks, for that particular line, we have to tell them 16 weeks, right? And now we're adding four weeks on to that because of the delays in the ports.

VANEK SMITH: This was not what Adnan wanted to be telling Costco. And Saffron Road ended up losing some of those Costco contracts. That moment caused by delays in shipping through the ports of LA and Long Beach, that was the moment when Adnan knew something had to change.

DURRANI: It's a grind (laughter). You know, it feels terrible.

WOODS: Adnan started to think maybe there would be advantages to shrinking Saffron Road to kind of just be more U.S.-focused. I mean, would there be advantages to just sticking with local ingredients in the U.S.? I mean, would that be a rash decision to make?

POL ANTRAS: You really want to think hard about how permanent that shock would be.

WOODS: This is Pol Antras, a trade economist at Harvard University. Pol says that the pandemic, although very severe, is more like a one-off shock than a permanent trade problem. And he doesn't see a whole lot of evidence that a lot of other multinational companies are responding to the pandemic by getting their supplies closer to home. He's been looking at basically the amount of trade happening in the world.

ANTRAS: With the estimates we have at hand, we seem to be at a higher level than at the beginning of the pandemic.

VANEK SMITH: Pol has studied other shocks, like the global financial crisis of 2008 and the 2011 tsunami in Japan. And he says in both cases, trade did dip for a bit. But he never found noticeable patterns of multinational companies reconsidering, like, where they would put their factories because it is just too expensive to relocate a factory, even in the case of a global pandemic that drags on for years.

ANTRAS: You know, these one-off shocks did not often lead to very large reorganizations of production. There's more forces that might be more permanent. But I think that's where, really, the possibility of a significant reorganization may lay.

WOODS: And forces that are more permanent include things like tariffs, like those between the U.S. and China, or sanctions or even war.

ANTRAS: Well, that's a different matter because then - you know, then you know you're going to have to jump at some point, and I might as well do it earlier rather than later. I'll be blunt. I mean, the traffic jams in LA, I mean, this is not particularly interesting. There's, like, a big supply shock followed by a big demand shock. That's going to create a lot of disruptions.

WOODS: Pol says the shipping congestion is like a traffic jam at the start of a long weekend. It's annoying, but it's not going to be permanent. Economically speaking, that's not likely to lead to any giant long-term shifts in trading patterns.

ANTRAS: There's a lot of things that would lead me to believe that, in a few months, we're not going to be talking about that. But I'm pretty sure we're still going to be talking about talks between U.S. and China and well beyond tariffs.

VANEK SMITH: In fact, even during the pandemic, trade between the U.S. and China has been hitting records. But of course, there is evidence to show that there have been some shifts. For example, some American businesses have permanently shifted their suppliers to places not affected by tariffs, like Southeast Asia.

WOODS: But the more complex your product is, the harder this is to do - to shift your factories. But Adnan is making curries and enchiladas, not smartphones. He can switch where he gets his ingredients from.

VANEK SMITH: And for Adnan, the logjam at the ports of LA and Long Beach were sort of the last straw. He halted a line of naan bread from India. He changed noodle suppliers from one that made noodles in Singapore to one that made them in California. And he told his staff something he never thought he'd say when he started Saffron Road.

DURRANI: And I'll tell you, this is completely contrary to my thinking two years ago. I'm a - you know, I really do love sourcing from all over the world, and we're an international brand. I mean, we're about world cuisines and global connections. But it was a catalyst that said to us, hey, we really need to focus on making sure we have secure supply from U.S. suppliers, U.S. manufacturers, U.S. facilities.

WOODS: So Adnan's modern-day Silk Road is shrinking. He's still bringing that chicken biryani to Americans, but the ingredients are more homegrown.

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WOODS: The show is produced by Brittany Cronin with help from Isaac Rodrigues. It was fact-checked by Taylor Washington. Viet Le is our senior producer. Kate Concannon is our editor. And THE INDICATOR as a production of NPR.

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