While every industry — from hospitality to fine watches and jewelry — has been affected by the coronavirus, it’s hard to compare the changes roiling the food and beverage industry to any other. With production and supply chain disrupted, and consumption patterns changing on a dime, the food and beverage industry is finding that innovators and creative thinkers are in high demand as they struggle to adapt to a new future.
A Bifurcated System Stymies the Supply Chain
Food production in the United States is bifurcated, with some products destined for grocery stores and some to restaurants. Restaurants, where profit margins are usually much higher, have been decimated during the coronavirus pandemic, and expect to continue to encounter difficulties as various states have outbreaks and shut down and reopen. Sales in grocery stores have been robust, with many of the most nimble food producers looking to pivot quickly to take advantage of retail sales.
Old Favorites Gain New Traction
While health trends of late have pushed fresh foods and local produce, the COVID-19 crisis may have a silver lining for producers of shelf-stable snacks which have been flying off the shelves as consumers stockpile childhood favorites in favor of health foods. Consumer packaged goods giant Mondelez reported a 15% gain in sales in 2020, due in large part to the coronavirus crisis, as consumers stocked up on familiar brands like Oreo, belVita, Sour Patch Kids and Trident gum.
Growth in Online Ordering
Online grocery purveyors like Instacart and Peapod have struggled to keep up with demand, and a new consumer preference for online grocery may prove to be durable and long-lasting. Well established grocery chains make look to build out hybrid options for their local customers in short order, creating a surge in demand for delivery people, shoppers and the digital infrastructure that supports them.
New Interest in At-Home Cooking
With stay-at-home orders in place all across the country, at-home cooking has boomed, and along with it has come a revival of interest in the meal-kit, like those made by Blue Apron. The company, which went public in 2017, has been on a bit of a financial roller coaster for the past few years, only to see new customer acquisition really take off as folks unfamiliar with cooking for themselves take up a new interest in the service. Restaurants that have been sidelined by the stay-at-home order have followed Blue Apron’s lead and developed their own make-your-own meal kits to stay alive in this new economy.
New Employee Safeguards
Some of the biggest outbreaks in the United States have been tied to food producers, especially meat processing plants and slaughterhouses. Major corporate food producers like Tyson and Perdue are looking at major changes to the way they train workers and organize the production floor.
In addition to the hotspots we already know about, other parts of the supply chain are working quickly to adapt, including:
- Farms where illness among workers could spark shutdowns or shortages.
- Grocery stores: workers and shoppers both want to know that they can enter an enclosed space like a grocery store safely.
- Distribution: on the distribution side, workers are demanding more PPE and physical distancing measures to ensure their jobs are safe.