Mintel: COVID-19 & The Food Manufacturing Industry
Friday, March 27th, 2020
The APFI team reached out to analysts at Mintel to understand the severity of the impact of COVID-19 on the food manufacturing industry. Here’s what they said:
Impact On Supply Chain
As COVID-19 has reached global pandemic levels, the impact on people, businesses and society in general continues to evolve at an unprecedented pace. Companies are now taking actions to proactively manage the effects of COVID-19, prioritizing on the safety and health of the people and the well-being of the communities. Still, one thing is for certain—it will have global economic and financial consequences that will be felt through global supply chains, from raw materials to finished products.
The impact on food manufacturing mainly lies in supply chain blocks and difficulty in recovering production due to the delayed return of labour force, lack of personnel mobility, and transportation restrictions. The size of these disruptions surges as the time to recovery lengthens. For example, in India, two biggest foods and beverage producers Nestle and Coca-Cola have suspended production on a temporary basis at their plants, with the exception of limited essential products, following the country-wide lockdown amidst the Covid-19 scare.
Looking forward, the food manufacturing industry should get back on track. Well in fact, China is expecting the most positive projections of “status quo” by April 2020.
Impact On Food Safety
Food safety and quality are non-negotiable factors for consumers. Buying a product that is safe to consume is the bare minimum people expect, especially as the pandemic persists. Therefore, food safety is the number one concern for food and beverage manufacturers.
Currently there is no evidence of food, water systems or food packaging being associated with transmission of COVID-19. But there is a slight risk in contracting the virus from food or food packaging picked up at a takeout window, from home delivery, or from a restaurant. Any actual risk of virus contamination would come from the employee handing out the food. There is a chance that the food employee who delivered the food is sick, but likely the food companies is following employee health policies and local health department recommendations to keep these individuals home.
Also, the scale and impact of the outbreak means many of the short term changes consumer behaviour will continue and there will be increased consciousness towards food safety, even after the economy returns to normal. We can expect more emphasis on preventative measures such as refined sanitation and personal hygiene practices. Given that the virus is said to spread like the flu, demand for health-protecting and health-safety items are increasing swiftly. For example store shelves in Taiwan, China, Japan, and Australia are void of bleach, hand sanitizer, and toilet paper which have an almost immediate impact on supply chains for manufacturers of such most sought-after goods.
Health/functional food and drinks are gaining more popularity, more than ever before like products that claim immunity benefits as we will want to protect ourselves from a second wave or to build up immunity for on-going protection. Moreover, we can expect consumers to continue to stock up on food with a longer-shelf life to serve as emergency ration. Consumer perception on longer shelf life food might change. At least longer shelf life food sustained them during the difficult times which open the way for future innovation.
What measures can manufacturers adopt to allay consumer fears over the safety of consumable products?
According to Mintel’s Global COVID-19 Tracker, 46 percent of Chinese consumers aged 18-59 say that the safety of food products is one of their most concerned things in current life.
With this, manufacturers should be prepared and take the right measures on food safety. Given that COVID-19 may have limited our travel, and manufacturers might be subject to increased economic pressure, still, transparency, integrity and trust are all indispensable if we are to ensure safe and ample food is being provided to the people.
Food production, processing facilities, and farms need to follow cleaning and sanitation protocols, set by local and national health agencies, which may vary depending on the amount of community spread of COVID-19 in a given market. Food facilities manufacturers should be vigilant in their hygiene practices, including frequent and proper hand-washing and routine cleaning of all surfaces.
As we maintain ‘social distancing,’ consumers are turning into online food deliveries. However, it is important to be aware that other hands have gone into the preparation of your order and even the hands of the person who delivered the food. While the virus does not appear to thrive on food surfaces or paper surfaces, it can survive for several hours, even days, on others. A recent study in the New England Journal of Medicine found the novel coronavirus that causes the COVID-19 disease survived for up to two or three days on plastic and stainless steel, and up to one day on cardboard.
In Asia Pacific, there are lot of the delivery services are working on best food safety practices. Those include contactless deliveries, such as customers asking for food to be left on a porch or at a doorstep, and using touch-free and cashless transactions.
Like in Thailand, GrabFood has introduced “contactless delivery” to ensure hygiene and the health of customers, drivers and merchant partners during the Covid-19 crisis. Its merchant partners have elevated safety guidelines in food preparation and packaging. The drivers will be wearing masks as they follow the customer’s directions via an in-app chat as to where to place their order and they will let the customer know when they arrive. They will place the order where it is wanted, wait for the customer to pick it up and should maintain a two-metre distance. Clients are advised to make payments via GrabPay to reduce the transmission risk. If cashless payment isn’t possible; the customer should place the cash in an envelope and put it where the food order was placed.
As consumers will continue to explore new gadgets that will satisfy their curious streak, make their lives more convenient and keep them safe from infections, manufacturers could produce a product that help consumers to stop the spread of the virus by eliminating the threat of using your hands. For example, Wellness company Zyplus has invented a portable device called “Poterapper” that allows consumers to ‘drink’ potato chips through a funnel-like mechanism. This gadget comes in three separate pieces: users can attach the device to the corners of their favourite chips, chocolates and snacks to deliver them straight into their mouth. Companies can see success in this innovation by tapping into this market and crafting innovative products that enrich consumers’ lives in many ways.
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