When it comes to the industries most affected by the ongoing pandemic, the food industry is arguably at the top of the list. Supply chains were disrupted for months, supermarket shelves were disrupted, food deliveries have exploded, and manufacturing plants have been hit by severe worker shortages. Almost 2 years on, the industry and retailers within it are still grappling with the fallout from the pandemic. Not only has the immediate market changed, but the pandemic has upended life as it was once known for manufacturers, dining establishments, and food retailers. As a result, the industry has had to innovate and adapt to meet these challenges, changing its direction for the future.
Disruption Of The Food Supply Chain Has Meant Panic And Inflated Demand
One of the most apparent impacts of the pandemic on the food industry was the rapid rise in food insecurity across the globe. Approximately 96 million additional people were pushed into food insecurity across 54 countries in 2020, according to the World Bank. In countries across the globe, media reports of consumers stockpiling and panic buying in fear of lockdown extensions put additional strain on the supply chain. The effects of these are set to be long-lasting as retailers and manufacturers continue to grapple with spikes in demand and unpredictability when forecasting stock levels. For some of the poorest countries, the effects of panic buying have been drastically apparent, particularly as households lose income from job losses and shutdowns.
Fixing Big Problems in the Food Supply Chain
In the food transport and manufacturing aspect, companies along various parts of the supply chain have been the victims of repeated breakdowns. In manufacturing plants, food companies are faced with labor shortages. In the United Kingdom, the economy faced a potential food shortage due to labor shortages. In the United States of America, meat processors are working hard to tackle worker shortages in their plants. There has been some discussion about labor shortage solutions in the form of temporary use of H-2A labor in meat processing plants and a dedicated Agriculture Visa for industries prone to worker shortages. However, even today American factories are still facing a $1 trillion issue of finding factory workers as demand continues to skyrocket and delays from production to market continue.
The Severe Disruptions Has Forced The Issue Of Alternative Channels
If there is one thing that the pandemic has highlighted, it is the vulnerability of the economy’s food supply chain. For instance, the breakdown of supply in fresh foods that stemmed from closed shipping ports or factory outbreaks showed many business leaders the importance of contingency planning.
While globalization has been incredible for the food industry, it has also opened up economies to more risks as they come to rely on internationally sourced foods. It may even be said that retailers and businesses in the food industry have become very enamored with the benefits of international sourcing and labor. Yet, with the pandemic food retailers were forced to explore alternative options like local sourcing and direct-to-consumer sales to keep up with demand. For instance, in the UK sales of vegetable boxes increased 111 percent during the first 6 weeks of Covid-19.
These issues will not be going away anytime soon either. It will be up to the companies in the industry to continuously remain alert for new challenges as the industry slowly returns to normalcy. However, even in that state, the food industry will be on a fragile branch for some time to come.
