by Cindy Sorensen/Founder, The Grocery Group
We are definitely living in a dynamic time brought upon by the coronavirus. One of the most interesting scenarios of this pandemic has been the resulting imbalance of food abundance and food insecurity.
To slow the spread of the virus, schools, restaurants, coffee shops and non-essential businesses have been shut down. The use of online retail shopping, especially for groceries, has increased dramatically.
Grocery retailers have had a surge in overall sales due to people sheltering at home and increasing their at-home meal consumption. In addition, shoppers have participated in “hoarding” behavior to stockpile certain foods and amenities they fear will have limited availability in the future.
But sadly, the shuttering of restaurants and schools has had an enormous impact on a distribution channel for many agricultural foods, such as produce, dairy, poultry, eggs, pork and beef. While retail sales are up, they are not able to compensate for the loss of consumption in the foodservice channel.
If this loss wasn’t enough of a blow to agriculture, meat processing plants have been closing around the country as the virus has impacted a large percentage of their work force.
The foodservice volume loss impact is devasting in many ways. Perhaps most notably, dairy farmers must dump milk because processing plants do not have the capacity or ability to switch lines from foodservice packaging and increase processing of retail products.
Another example is how hog, beef and poultry farmers are having to euthanize their animals because their local processing plant is shut down. Eggs and produce also must be destroyed due to the lack of a foodservice distribution channel.
The unemployment rate is at the highest it has been in decades and record numbers of clients are lining up at food banks to receive a much-needed box of food. Many farmers can be found in those lines as they have lost the ability to sell their milk, beef, pork, poultry, product, etc.
Food bank clients wait for hours in long lines, all the while food is being destroyed. Food availability isn’t the problem; it’s the ability to process food from the needs of one channel of distribution to another.
As for lessons learned from this pandemic, my wish would be for the entities that support agriculture—including USDA programs, co-ops, processors and manufacturers—to work collectively and proactively to develop contingency plans for if/when this situation happens again. And if the experts are to be believed, it is not a matter of if, it’s when.
What will the food supply chain learn from this pandemic? In my experience, industry crisis drills have focused on events that could impact consumer confidence in an industry, therefore decreasing consumption of impacted products.
Maybe the supply chain should consider a drill or preparedness plan that would account for the shift of consumption from one channel of distribution to another, or for the increased confidence and consumption of a product.
A great example of a solution that emerged to help dairy farmers and consumers was a partnership between the state of New York and dairy processors Chobani, Cabot Creamery, Upstate Niagara and Dairy Farmers of America. They worked together to process excess milk into yogurt, cheese and other dairy products for distribution to food banks.
This plan was done reactively, but maybe this partnership could provide a case study for contingency and preparedness drills for the future. A proactive preparedness plan such as this can make sure farmers will be paid, people in need will eat and an economy and an industry will stay afloat.
Sorensen’s Minneapolis, Minnesota-based Grocery Group has a mission to “develop leadership in purpose, people and products” with a specific emphasis on the grocery/consumer packaged goods (CPG) industry. The group also develops programs to connect grocery industry professionals to colleges and universities to help attract, recruit and retain a talented workforce in a competitive employment. Reach Sorensen at [email protected]