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How The Food and Beverage Sector Has Been Affected by a Global Crisis

 

The food and beverage industry is vast, with both online and offline supply chains. This industry includes companies that work in processing raw food materials, those involved in packaging and distributing prepared foods, organizations that manufacture and distribute alcoholic and non-alcoholic beverages, restaurants and cafes, and general retailers — amongst many others.

Apart from dine-in restaurants and bars, a lot of food-related businesses are categorized as essential services, which means that they have to keep running even during a global pandemic such as the one we face today. However, to do so effectively, stringent safety measures must be followed, thereby limiting the exposure of customers and employees at all stages of production, distribution, and consumption.

Present Conditions in the Food and Beverage Sector

With the COVID-19 outbreak, most restaurants and cafes across the world are shut down. Small eateries and local diners are struggling to stay economically afloat in these tough times. To put things in perspective, recent statistics released by the Bureau of Labor Statistics found that “Employment in leisure and hospitality fell by 459,000, mainly in food services and drinking places.” At the same time, both grocery stores and food manufacturing companies like Coca-Cola, Dominos, and McDonald’s are facing disruptions in their supply chains, resulting in delays in the supply of raw materials. This is especially true for organizations that have suppliers in China.

On the other hand, online food sales and related-services are still up and running, in an ever-increased capacity. Due to this, large corporations that provide food delivery services like Amazon, Walmart, and Kroger are expected to reap huge profits.  In fact, this article by S&PGlobal estimates that online buying of food and beverages in the US is expected to reach $38.16 billion by 2023! These trends are seen in other parts of the world, too. For instance, in February, South Korea saw an increase of 92.5% in the online sale of food products. This was the month in which COVID-19 infections were at their peak in the country. Similarly, there is a surge in online buying of non-perishable food items in Singapore — one that is expected to last even after the pandemic subsides.

These uncertain and ever-changing conditions have forced restaurant owners to get creative in order to stay afloat. In addition to options such as deliveries and takeouts, restaurants are turning their dining halls into grocery stores, steakhouses are being turned into butcher shops, and many fancy restaurants are hosting online cocktail-making tutorials.

Food and beverage sector businesses adapting with packaged meals

Government Regulations and Legal Requirements

Price gouging is a common feature during emergency situations such as a global pandemic. Price gouging involves charging inordinate prices for necessities that see a high demand during such times. Most state and federal governments have declared this illegal and have implemented policies to protect customers and small retailers. State laws against price gouging also make provisions to ensure that consumers’ and suppliers’ needs are met.

Food and beverage businesses should also consider asking for subsidies to keep up the supply of essentials during a pandemic. For instance, the flour industry in Pakistan has requested the government to cut taxes or issue subsidies for items required to run the mills.

Businesses in the food and beverage sector need to be aware of the new local and federal requirements to protect themselves from litigation charges and/or bankruptcy. In the US, the CDC has issued guidance procedures for employers, which must be followed as a minimum requirement. In order to ensure maximum safety, employees must be asked about their health before each shift, and all protocols regarding food handling and food safety must be strictly followed. Other important safety measures include maintaining safe distance at takeaways, non-contact delivery of eatables, and covering employment claims.

Tips to Adapt

Food manufacturers need to adapt to the current situation and meet new patterns of demand. Tips to do so include:

  • Risk awareness: Grocery stores are places of high risk, yet, frequenting them is necessary. It is thus important to make customers aware of the potential risks of shopping at stores, as well as demonstrate what is being done to combat these risks. This is essential to retain customer trust, as well as reduce the spread of panic.
  • Clear and constant communication: Organizations in the food and beverage sector should keep all involved employees up-to-date about operational challenges as a result of COVID-19. Doing so helps manage employee expectations, and being in-the-know helps employees retain some peace-of-mind through this uncertain time. Even though workers cannot interact face-to-face, staying abreast of organizational activities helps employees feel involved and is likely to boost morale.
  • Stringent in-store sanitation policies: This goes without saying, but any in-person food and beverage related business must implement strict sanitation measures. Grocery stores are one of the most common places one can get sick, even during normal non-pandemic times. With this in mind, all in-store workers must be encouraged to wash or sanitize their hands frequently and refrain from touching their face during work hours. They can also wear latex gloves to decrease the chances of contagion. Shelves, knobs, switches, handles, refrigerator doors, computer hardware, and countertops must be regularly disinfected.  The various parts of shopping carts can also contain germs passed from one customer to another and must be disinfected after each use. To ensure this is done, grocery stores can provide out anti-bacterial wipes to wipe down carts before customers use them and instruct them to maintain a safe distance from the checkout counters.

There is much uncertainty with regards to the food and beverage industry in the time of COVID-19. One thing, however, is for sure: there is a strong need to meet consumers’ demand for quality and convenience. With a global crisis that is wreaking havoc in many countries, consumers are increasingly cautious about the quality of their food. Food manufacturers and organizations involved in retail and supply are thus obliged to adhere to sanitary measures to protect customers and employees, and at the same time invent creative ways to stay in business.

As the food and beverage sector evolves everyday to the changing demands, having a partner to adapt processes in operations and the supply chain could be the difference in survival or demise. USC Consulting Group can assist in enabling rapid acceleration of performance to meet demand. Learn more about USC’s capabilities in the eBook: Understanding the Challenges Facing Modern Food & Beverage Producers.

Modern food manufacturing challenges eBook

This article is written by guest author Beau Peters. View more of Beau’s articles here.

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