EFFECT OF THE CORONAVIRUS OUTBREAK ON THE FOOD PROCESSING AND RETAIL SECTOR

Coronavirus outbreak: One cannot think well, love well, sleep well if one has not eaten , a quote by Virginia Woolf cannot over emphasize the importance of food especially in a time like this.

The Coronavirus outbreak may bring significant changes to how consumers buy their food and even to the ways they are processed and distributed. Food service will be faced with a major hit as more consumers work from home or practice social distancing to slow the spread of the virus.

Many restaurants will lose traffic and the fall in demand will ripple down to the distributors and manufacturers who serve those businesses. There are various effects of the outbreak and the stay at home measure taken to curb the spread of the virus on consumers, food processors and retailers.

On Consumers

The outbreak has forced shoppers out of their usual consumption pattern, adjusting their shopping habits and brand loyalty to buy what is available other than what is preferred, encouraging shoppers to try new brands which they might stick with for a while.

A surge in the buying of food, water and drugs which are termed essentials to staying indoors has been noticed, meaning that consumers are spending a large chunk of their salary or savings on these items. I for one has never spent more than half of my salary on food stuffs before now.

The transition to digital commerce has many shoppers who are used to and preferred physical shopping now embracing the idea of shopping online, allowing visibility for online shopping platforms to thrive in these times.

On food processing industries

There is a disruption in the supply chain, farmers are discarding large quantities of perishable products due to the massive shutdown of restaurants, food institution and local food service joints and this is happening even though there is a demand for them in the supermarkets.

Companies are adjusting their operations to meet the increasing demands by consumers. The surge in sales may boost profit for some food manufacturers and retailers. This has shifted focus to an increase in production of top selling items and the distribution of these items to ensure it goes where demand is highest.

On food retail industries and restaurants

Most food and grocery stores are dealing with an out of stock situation on many key products while managing the challenges of stock supply.

There is an increase in digital grocery orders, and this is less profitable than physical-in store shopping as it does not give room for impulse buying, immediate consumption, or new product trials.

For most restaurants, local food joints, many people will come out of this pandemic more germ cautious than ever before, in-store food sampling will become less normal. For those who have upgraded their cooking skills or even just learnt it during the quarantine period may be sticking to such habits for a while. You know what this means? Less turnover for restaurants and food joints.

How can they manage these effects?

Though the uncertainty over the degree and length of the outbreak’s impact cannot be fully addressed, a few ideas on how they can manage this are listed below.

  • A contingency plan to prepare for a deeper supply chain disruption.
  • Food retailers can shift focus to getting supplies from a local source to manage the risk of cross- regional or inter-state transportation ban which is already taking place in many countries.
  • Food processing companies should design a supply chain flexible and strong enough to hold out the effect of the outbreak.
  • Double up! double up! double up! your manufacturing cycle to get to the front line with key suppliers. As health workers are striving relentlessly day and night to provide medical aid to people both sick and infected, so it is important for food manufacturing companies to work round the clock to ensure that food supply does not run short. If we are not hit by covid19, we are not hoping to be by hunger.
  • Grocery stores and food retailers will need to develop a no- touch customer rule with an emphasis on hygiene and an online means that recreates traditional behaviors that endeared customers to the brand.

Most importantly, it is very crucial for every industry including the food sector to be ingrained in their consumers life. As their behavior change due to the impact of this outbreak, so will organizations be prepared to re-adjust.

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