Nine meals away from anarchy or one pandemic away from a global food system change?

March 2020 will always be remembered in the global food industry. COVID-19 outbreak turned everything upside down impacting all the sectors without exceptions.

While foodservice providers have been forced to shut down or pivot solely to take-out and delivery services, packaged food brands and retailers can hardly keep up with the demand of hoarding consumers.

Just when big companies started to finally realize the need for innovation, they now need to reallocate their R&D resources and prioritize the safety of their employees. Small and medium businesses, on the other hand, have to either close their doors or accept change with a "business as usual" attitude and adapt all their processes to the new reality.

This extreme situation represents the disruption we needed in order to see the weaknesses of our food system, where the most efficient logistic operation can fail when people panic. But it also teaches us that suddenly, as if you put a stone in the path of an ant colony, new ways are found to get food to the consumer.

PRODUCTION & MANUFACTURING

When the direct link to consumers became essential

Food manufacturers have been mapping out their supply chains to identify and mitigate any potential risk as well as reviewing their manufacturing flows to reduce physical contact and keep workers safe. At the same time, consumers’ purchasing behavior is shifting at an unusual pace that requires simultaneous distribution strategy adjustments.

We see new collaborations being born daily to work towards a shared vision: sustain and maintain food supplies. Land Arbeit or another website created by the German government are platforms to connect farmers lacking workforce with people who are currently out of jobs.

Flexible work and the cross-sectoral move of labor could create short-term jobs to decrease unemployment and maintain agricultural production at the same time.

DISTRIBUTION CHANNELS

When just-in-time transformed into waitlists overnight

The announcement of the pandemic followed by social distancing rules showed us the fragility of the just-in-time system our modern supply chains rely on.

According to Mintel’s latest data (consumers questioned on 13th March), some 10% of UK shoppers stockpiled goods. 10% might be a minority, but when they start panic-buying it places a significant strain on stock and logistic networks.

Online demand skyrocketed finding the channel unprepared. Pre-coronavirus stats showed that only a small percentage of groceries was purchased online (2018 online grocery channel share UK 6% France 4.5% Spain 0.7% Germany 0.5%).

The main deterrent force was the delivery fee followed by concerns about the freshness and quality of food. This is very likely to change permanently now because consumers’ fear of getting a bad tomato is not as great as their fear of contracting COVID-19.

Within a month online grocery orders doubled, the channel reached a 500% increase in the new user registration which forced some service providers to take down their online ordering platform to process orders first. Major retailers’ delivery slots are booked out two weeks in advance.

An online-only supermarket Picnic had to extend the usual one-day delivery to a week and limit it to existing customers while new customers land on the waiting list next to 70 000 other households.

Massive manpower and investment would be needed in order to quickly evolve and adjust the home delivery sector to the new reality. Foodservice can ease the pressure on retail by turning some of the outlets into ready-meal stores. Smaller outlets face a greater impact as their supplies are not as regular and they do not have the infrastructure for delivery services.

Nevertheless, we can see grassroots movements connecting multiple shops to supply their community with products of an average shopping basket.

“Every brand right now is in the business of being a public service.” (Nicholas Fereday, Executive Director, Food & Consumer Trends at Rabobank)

Companies started to offer various kinds of support for healthcare workers, wave delivery fees, developed contactless delivery, allow consumers to donate or purchase vouchers and enable communities to bond.

A free shopping list app Bring developed a shared shopping list functionality helping their users to shop for elderly neighbors. The UK government provides a database for supermarkets to help prioritizing deliveries for the vulnerable.

While schools are closing down, millions of children miss out on their school meals which for many of them is a critical source of nutrition.

FeedmyBangalore is a partnership of corporates and startups supporting the countless families of daily wage workers who are going hungry during the 21-day lockdown in India.

CONSUMPTION

When eggs became the best performing asset and overtook gold

David Chang, chef and founder of Momofuku Noodle Bar and producer of Ugly Delicious TV Series said in his interview for The New York Times: “People don’t even know where their food comes from, and that is a metaphor for a lot of our problems.”

Consumers do not believe that products will be available long term. This explains the continued stockpiling and panic buying. But there is actually enough capacity in the system for all if everybody stays calm and stops hoarding.

Over the last weeks, we witnessed the sales of prepared meals and non-perishable food products going through the roof. Canned goods and pasta were all the rage. Then suddenly people discovered the kitchen in their homes and the newfound time available for cooking.

The longer the isolation is, the more the demand will shift from toilet paper and pasta to flour, yeast, eggs and fresh produce. Americans seemed to worry first about having enough eggs to color for Easter. In the last week of March, sales were 80% higher than a year ago and prices tripled compared to the beginning of the month.

As fruits and vegetables with high vitamin C content are the most sought after, orange sales are reportedly up 60% year-over-year.

In order to ensure that all consumers have access to key items, supermarkets need to consider enforced limits of certain product lines or introduce dedicated shopping hours and priority delivery slots to supply the older age groups.

Due to income loss or the fear of it, consumers started to move away from premium items and are less likely to purchase organic, sustainable and ethically sourced products. Notwithstanding, the demand for "comfort" products such as ice cream and yogurt will remain high.

Slow Food has been trying over 30 years to bring farmers closer to consumers. COVID-19 needed only a few days. The more self-sufficient and local a food brand is, the more comfortable people might feel. Consumers started to opt for smaller stores closer to their homes and shop more local, as they began to shift value to the source and distribution of their food and beverages.

FUTURE

When resilience was put along with efficiency

Our modern society and the systems it relies on are fragile and constitutionally vulnerable. Are we at the tipping point of our food system? Will the #supportyourlocal solidarity stay after the pandemic? Will restaurants continue to be community centers? Will delivery become the norm?

It's all up to how we act now when we are given an opportunity to change the existing system.

In order to create resilient systems, we need to change current business models to and break up the silos we operate in. Transformative policies are required to push the industry from productivity and yield towards diversity. The nature of coopetition must evolve where competitors engage in common innovation spaces.

Well-functioning agricultural systems must be constructed collectively. Intergovernmental cooperation has to necessitate more redundancies and promote a greater degree of regional self-sufficiency.

Working with larger inventories and buffers built in this system can prevent countries from taking the ill-considered measures. Because how can we expect consumers not to panic-buy when their governments panic-bans exports?

Data enables prediction that empowers our decision-making process. It strengthens resilient food production and distribution, impacts conscious eaters' choices and can radically decrease resource depletion.

More effective data usage will allow us to design for transparency and trust and build a conscious consumer society that is less driven by convenience. Because the sustainable equation of wealth for the long term is reliable information and global solidarity.

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