The Effects of COVID-19 on the Food and Restaurant Industry

The novel coronavirus pandemic has had rigorous impacts on the global food industry. With governments closing down restaurants, bars, and hotels, the industry’s daily traffic dropped significantly compared to the same periods last year.

The closing down of restaurants has sent a massive wave across related industries, branching off the negative impacts to industries such as food production, alcohol production, food shipping, fishing, farming, cooking, catering, and more.

Especially in industrialized areas that are high in exports and imports, these issues were particularly disruptive to the economical stability of particular ecosystems.

In response to this closure, the United Nations warned that the world might be facing a crisis never seen before in the last 50 years.

What are the experts saying?

The general consensus is that the more well-developed a logistical system is (which is common in industrialized ears), the better off that system will sustain and recover from the impacts of the COVID-19 pandemic. These systems are particularly effective at dealing with shortages of one commodity, but they may be more vulnerable to the economic shock because they don’t keep any reserves.

 

Not to mention, panic buying has resulted in shortages, as well. When, for example, something small like hand pumps for hand sanitizer bottles experiences a disruption in its supply chain, this can result in shortages of a lot more than one product.

For many food products in the U.S., resupplies happened quickly even though panic buying had already caused empty shelves of certain stocks nationwide.

Various retail trade groups in the U.S. have advised retailers to increase the amounts of products they order so they can prevent such a thing from happening again. But without a doubt, retailers in the food industry were highly affected by the virus, resulting in more expensive, lower-quality food and even shortages of specific products.

Furthermore, people literally stopped going to restaurants even if they were open. North America saw a 90 percent decrease in foot traffic to restaurants. Latin America saw 75 percent. And even though restaurants have been reopening nationwide, people are still hesitant to go there, even if they’re equipped with some form of personal protective equipment like a surgical mask or respirator.

People are changing the ways they buy food.

 With the COVID-19 pandemic contributing to the increase in precautions and requiring everyone to cease their normal social activities, a shift has happened. This shift in buying patterns during the pandemic has helped us identify how the everyday public has been affected by the virus, and how the virus has impacted the food industry.

But even though restaurants and bars have been closed down, some sectors of the food industry are booming.

Online grocery shopping has skyrocketed.

This sector of the food industry has grown massively during the pandemic. However, we can only speculate how big this change will be in the long-term. People are ordering groceries online at a much higher rate. Even small-scale farmers are now using new technologies so they can directly sell their produce.

Direct-sell delivery systems have been on the rise during the pandemic, and so has this movement toward community-supported localized agricultural solutions.

Home delivery has made a big jump!

When you have restaurants closing down and foot traffic to these restaurants declining sharply, restaurant owners have adapted to this shift in logistics. Formally, food companies have relied on food traffic, but now, businesses such as cafes and restaurants have adapted to offer new delivery options such as take-away and home deliveries. There has been an increase in food deliveries across many European markets and the U.S.

Retail has become more prevalent.

The retail industry is also seeing a major jump. Consumers are now forced to shift to retail as the food sources they have nearby might be facing shortages or logistical difficulties.

Not only that, but the pandemic has also generated another shift in behavior, the idea of hoarding different foods and essential household items so they can cover their necessity for the long-term, if needed. In countries like Belgium and Spain, this hoarding behavior has resulted in massive spikes in retail purchases – 44 percent and 71 percent, respectively. And not to mention, when a government-issued lockdown is in place, retail stores experience significant pressure to keep their shelves stocked.

However, there’s still much uncertainty in the food sector.

The food industry is one of the most crucial sectors of our society. A pandemic like the novel coronavirus, even though presenting a challenge and new limitation to the sector, can be overcome but will likely result in lasting changes and a “new normal.”

While some companies are facing many difficulties due to this new drop in their profits, other companies are adapting to this situation and working day and night so they can meet the needs for their customers and large-scale retailers.

With this increasing pressure, food businesses will be forced to adapt so they can meet this growing demand – not just in the means of delivering a product, but also in protecting their employees from virus transmissions. But luckily, pandemic or no pandemic, companies always have a way, through policies and regulations, to increase their efficiency and do their best to keep customers and employees safe.

 

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