The Covid-19 pandemic has impacted different industries in different ways. But, unlike sectors such travel, live entertainment and hospitality which have been hard-hit by the crisis, food manufacturing has proven to be resilient and has responded well to the crisis. However it has created challenges and opportunities for the food sector.
“There were only minor disruptions to the food supply during the height of the crisis. What helped a lot was that the European Union declared the Food Industry a ‘critical sector’, allowing workers to go to work as long as all the safety rules could be assured,” says Andy Zynga, CEO of EIT Food, Europe’s leading agrifood innovation initiative which aims to create a sustainable and future-proof food sector.
Zynga believes that the pandemic also presents many new opportunities for the industry to fast-track positive trends and transformations. “As the pandemic is ‘ageing’ it is becoming clear how food companies are adapting, and which trends are being accelerated – healthy eating, shorter supply chains and alternative proteins for example. This also means that we are seeing investors re-emerging slowly from their safe harbours,” he says.
Another of those trends is ‘localism’. With many companies experiencing a resistance to return to ‘normal’ office life, employees are using their local shops a lot more and cooking from home, especially during the daytime.
According to a recent survey from GlobalData, ‘localism’ is becoming increasingly more important in the UK. 52% of those surveyed believe locally sourced ingredients have become more important to them due to the pandemic. This was the case with all ages and indicates an increasing interest in the provenance of goods and the authenticity of food products.
Michael Jackson, Head of Regulatory Compliance at the UK’s Food Standards Agency states: “Covid-19 has been an extremely challenging time for the food industry, with many businesses changing the way they trade to survive.”
The big food giants, such as France’s Danone, appear to have weathered the storm quite well. Like most sectors, food manufacturing was in the middle of a period of transformation, even before the onset of the virus. Emmanuel Faber, Danone’s Chairman and Chief Executive Officer, comments: “While it remains difficult to predict exactly how consumer habits and macroeconomic conditions will evolve for the balance of this year, in particular given the uncertainty around the easing of lockdown measures, we’re confident that Q2 was the most challenging quarter of the year and the back half of the year will show a sequential improvement in growth.“
Faber adds: “As we adapt to the new COVID world, our compass remains to deliver superior sustainable profitable growth and to lead the way in creating and sharing sustainable value in a world where concerns about society, health and the planet are core to our business.”
EIT Food’s CEO believes that start-ups in the sector will play a crucial role in driving the transformation of the industry. “We believe that supporting entrepreneurs in the agrifood sector during this critical time is imperative to make sure at least some good comes from it, in terms of accelerating positive trends,” says Zynga.
“Start-ups provide crucial innovation to help the agri-food industry tackle climate change and improve our food system. Whereas the Covid-19 situation is complex, and market solutions to food system challenges may have been disrupted or delayed, the pandemic also presents many new opportunities to adapt to a new way of living and make more radical progress faster in some cases,” he adds.
There have obviously been winners and losers from the crisis. Many restaurants, casual dining and urban food outlets are facing closure and financial difficulties. Food manufacturing plants have also faced severe challenges with their employees particularly vulnerable to picking up the virus due to the nature of the job. However, in many countries, it’s been boom-time for local food and grocery delivery services.
Despite the challenges in the months ahead, EIT Food’s Zynga remains optimistic for the sector and his group is offering support for entrepreneurs and start-ups. “The network of EIT Food in academics, corporates and investors – across Europe – allows EIT Food to not only open doors and help international growth and fundraising, but also bring insights and expertise from around the continent into that tailored support.”
As we all discovered in the first few weeks of lockdown, when certain goods ran out due to panic buying, things can change very quickly in response to unexpected events. Like many industries, the food sector is learning many lessons during the crisis and is responding rapidly to changing consumer habits. When we emerge from this crisis, the food sector is likely to look very different to the the way it looked when we entered lockdown.