How Will Coronavirus Impact the Food Chain?
Make no mistake, there will be ripples felt in the food supply chain as the waves of the current pandemic settle. But what can we expect?
It’s a fact, people have to eat. At the time of this writing, the North American food supply chain is more or less intact. There are no obvious signs of shortage, other than the inexplicable absence of toilet paper and perhaps some low cost food staples such as pasta.
It would seem the call for calm and assurances that there’s plenty of supply has not eased consumer anxiety over the potential of their favourite perishable and non-perishable brands disappearing from the shelves.
In our time of “social distancing”, having the cupboard and fridge filled with our food favourites may become critical. We may have to make critical decisions as to what’s really important. We will be double-thinking gluten-free, sodium-free, dairy-free, no sugar added, plant-based meat, vegan, non-GMO, or rain forest alliance certified products. Not that they aren’t essential to some dietary needs, but for most of us they’re more like “nice to have”.
The largest food brands have been struggling in recent years to maintain their share position. It’s going to be extremely challenging for large corporate-directed food manufacturers to place more stress on their businesses by quickly filling orders and pushing supply-chains to deliver.
Those who are marginal in the best of times will probably not survive, regardless of size. The next four to six critical weeks will shake out the dust leaving a clean slate for those with the foresight, and the resources to fill the gap.
Beyond having an exceptional logistical strategy, the most critical element in order fulfillment is keeping reliable and skilled labor in place. The connection for all supply-chain elements working effectively is people. Maintaining a healthy supply chain labor force is now critical.
Walmart, Amazon, and a host of other companies, particularly in delivery services, have announced they’re hiring thousands.
Ultimately, forecasting has been a critical tool in keeping the supply-chains intact. COVID-19 has tested even the most sophisticated forecasting technology.
Consumers will quickly tire of all the rice, pasta, beans and canned goods they’ve hoarded. We will eventually miss having our favourite indulgences and begin replenishing.
In adding up the variables and thinking through the classic “Bull Whip” forecasting theory, no one it seems has connected the unprecedented dots that make up the whiplash that’s coming.
With respect to those who supply the food chain, what we can predict with relative certainty is increased agility, transparency, and broad contingency plans.
Data on consumer trends, demands and behaviours must be shared – leveraging purchase power through holding back proprietary data won’t serve the industry. Solutions like innovative sharing hubs will build a stronger food ecosystem for everyone.
What happens if man of our food manufacturers, suppliers, and restaurants close for good? Is this the new age of home cooking with an alternative set of cupboard staples? Or an opportunity for entrepreneurs to step in and take advantage of the landscape. Or both?
One thing is for certain though, people gotta eat. What they pull off the shelves and how it got there will be an interesting matter of history.