The past few weeks have shown us how fragile our fresh food supply chains are, but they have also shown us how resilient they can be.
While initial modest panic buying in the UK led to supermarket shelves being cleared of some products, most retailers have ensured supplies are getting through.
For fresh produce businesses heavily reliant on supplying the foodservice sector — where demand all but disappeared overnight — things will be very tough now. It reiterates the need for fresh produce companies to have balance in terms of customers.
At the same time, it could be that COVID-19 will see online shopping systems come into their own, as consumers look at different ways of buying food and drink. The online channels have been in strong growth for the past two or three years and COVID-19 is likely to accelerate this market further, provided they can get to grips with delivery issues experienced during the early weeks of the pandemic.
It is clear, however, that there’s not a food or farming business in the UK (and potentially in the world) that won’t be affected by COVID-19.
Every business will have someone affected by the virus, and, given there is already a shortage of labor, companies will undoubtedly find it difficult to find get the right staff in the right place at the right time. Imports of fruit and vegetables from the likes of Holland, Italy, France or Spain might also become more difficult.
Farmers, packers and food businesses can carry on for a short period, but if this goes on for many months, there could be those who just can’t deal with the pressure.
Long-term, consumer confidence could also be an issue. The government has promised to pump billions of pounds into the economy to help support businesses through this difficult time, but some of the further economic impacts are likely to be hard.
There is a danger that, just when it looked as if a sustained period of economic austerity was coming to an end, we might find ourselves in the middle of another period of recession. Hard-pressed consumers might either stop buying high-value products, cut back on purchases, or trade down to more value-oriented options.
For most of the UK supply chain, the whole of 2020 will be challenging and uncertain. While many companies used Brexit as an opportunity to review all aspects of procurement, buying and selling, staffing, management, relationships with suppliers and technology, businesses would be wise to perform similar reviews now too. COVID-19 certainly won’t last forever.
However, the impacts of what we are going through — and what lies ahead for consumers and UK produce companies alike — may well last for some time, and we all need to be prepared.
John Giles is a divisional director with Promar International.
Source: The Packer