The COVID-19 pandemic has invariably changed the operational rules of most industries. Between changes in social interaction combined with severe and unpredictable changes in demand, the ability for companies to respond is extremely challenging. Has your company changed the way they operate? Are you enforcing social distancing, changing buying patterns, or adjusting work schedules? You are experiencing what most industries are experiencing; you are not alone. With rising infection rates, changes to the way we live, work and eat, and economic downturns, it is an unpredictable time for food and beverage companies.
Here are 5 ways COVID-19 is changing the food and beverage industry:
1. Regulatory changes
In light of the COVID-19 pandemic and efforts to “flatten the curve,” the Food and Drug Administration (FDA) announced on March 18 that they have halted all routine surveillance inspections of facilities that manufacture food and other FDA-regulated products. The agency noted it was exploring alternate inspection strategies, including evaluating records in place of onsite inspections. Due to the coronavirus and social distancing measures, there may be fewer workers in plants; those who continue to show up may be tired or stressed, which could lead to more mistakes that slip through the cracks.
2. Food Habits, Shopping Shifts
The COVID-19 pandemic has disrupted the way consumers live and work in recent weeks, and a new survey suggests that some of those changes may be long-lasting and in some cases, even permanent.
Anticipated adjustments include preparing food more often, shopping during non-peak hours, shopping more online and postponing or cancelling personal service appointments. Consumers interviewed also said that over the coming weeks they expected to prioritize spending less on things like clothes and toys, and more on “essentials” like cleaning products, canned goods, and bottled water. See below:
|Consumer Behavior Shifts|
Proactive, Health-Minded Buying
|Interest rises in products that support overall maintenance of health and wellness.|
Reactive Health Management
|Prioritize products essential to virus containment, health, and public safety. E.g. face masks|
|Pantry stockpiling of shelf-stable foods and a broader assortment of health-safety products; spike in store visits; growing basket sizes.|
Quarantined Living Preparation
|Increased online shopping, a decline in store visits, rising out-of-stocks, strains on the chain.|
|Severely restricted shopping trips, online fulfillment is limited, price concerns rise as limited stock availability impacts pricing in some cases.|
Living a New Normal
|People return to daily routines (work, school, etc.) but operated with a renewed cautiousness about health. Permanent shifts in supply chain, the use of e-commerce and hygiene practice.|
3. Supply Changes
Food businesses are facing long-term uncertainty of a likely recession. Food companies are encouraged to work with upstream suppliers on commodities that are heavily impacted by supply and demand fluctuations (such as milk) to adjust production and create more finished material (such as butter, cheese, chocolate, powder, yogurt, etc.) with a longer shelf life to avoid food loss. Expect continued reliance on and heavy use of e-commerce options as people stay at home. Devote IT resources to communicate realistic windows for product availability and delivery windows. Be reminded that digital platforms are of continued importance, in addition to contactless delivery and pickup options. To the extent possible, streamline quick communications through DSD networks and point to point tools.
4. Long-Term Economic Changes
Food businesses are facing long-term uncertainty of a likely recession. At the same time, companies are increasing wages to workers and providing more benefits, such as paid sick leave, to those workers on the front lines. US and Canadian governments have introduced legislation to help those industries and individuals affected by the pandemic. These regulations are ever-evolving to meet the changing market conditions.
5. Retail Performance…the Devil is in the Details
Retail demand is strong, but don’t let the macro number fool you. Industries are playing a roulette of sorts trying to determine demand. Industries are producing 24×7 one week and then the next they are dumping product. Know your industry, know your capacity, and cautiously prepare for this inconsistent behavior. Things will change and normalize; put yourself in a position for that change.
With help from HarvestDSD software for food distribution and delivery, your perishable foods business will have the means to simplify operations and adapt to changing conditions without missing a beat. At a time when so much is uncertain, this platform can provide you with the compass your business needs to sail through uncharted waters.
Ready to find out how food distribution software can allow your business to comply with social distancing measures without compromising on results? Harvest Food Solutions is here to help. Our HarvestDSD software solutions make it easy to address every aspect of the supply chain from one digital portal. CONTACT US TODAY TO BOOK A DEMO to learn how our perishable food software can take your efforts to the next level.