produce

How has coronavirus affected the food industry?

Grocery stores can barely keep their shelves stocked as panicked consumers horde food and other provisions. In view of that, one could be forgiven for assuming that the food industry is doing just fine in the midst of the coronavirus pandemic.

As it happens, that is not the case. Politico reports that enormous quantities of food are going to waste as restaurants and other large buyers, like schools, have severely cut their food orders or suspended them altogether.

Milk is being dumped and fresh vegetables are being used as mulch. For the latter purpose, plenty of equipment hunt machinery is for sale.

Essentially, food producers are being forced to adjust their businesses to a rapid and dramatic change in consumer demand.

“The way a client described it is they’re seeing a tsunami of demand shift from food service to food retail,” said Bahige El-Rayes, who works in the consumer and retail department of a consulting firm. “If you’re a manufacturer today of food, it’s basically how do you adapt? How do you actually take what you sent to restaurants then sell it now to retail?”

While the Politico piece focuses on the United States, we know that over 180 countries are dealing with the same issues at the moment. Many have begun restricting food and agricultural exports on vital products like rice and wheat to ensure their citizens have ready access to them throughout the crisis.

Particularly impacted in the US is the meat industry, which Illinois Farm Bureau president Richard Guebert Jr. says “is backing up on bacon and other products that they put together as cut-outs, so they’re slowing down and not doing the volume that they had.”

As the owner of a dairy farm in Wisconsin emphasized, food waste comes on top of the hit the industry took when the stock market plunged last month.

“Clearly we’re in a time of crisis,” Gordon Speirs said. “We’ve lost 25 percent of our income just through the crashed market. Now we face the reality of having to dump milk on top of that.”

Huge amounts of the dairy industry’s product is bought by the food service sector—significantly more than is bought by grocery stores. Here’s an interesting statistic: In 2018, Americans purchased $678 billion in food from restaurants, and about $627 billion from grocery stores and supermarkets.

The National Restaurant Association in the US now estimates that the coronavirus pandemic will cost the industry $225 billion and 5-7 million jobs over the next few months.