In May 2020, Anthesis hosted a series of roundtable events to discuss the key challenges that organisations are facing during COVID-19 and how they are responding.
At the second of these sessions, professionals from across the food and beverage sector came together to discuss the trends they have encountered during the pandemic and to share how they are responding.
Here, Julian Parfitt, Anthesis’ Technical Director, summarises some of these key trends impacting the food and beverage sector and the considerations when planning for recovery.

Current trends in the food and beverage sector
Since the lockdown measures began in March, we have seen five quite dramatic changes in the food and beverage sector, some driven by consumer response and behaviours and others related directly to the shutting down of the foodservice and hospitality sector:
1. Cooking from scratch. Consumers are generally spending more time cooking from scratch at home and have made changes to their shopping to reflect this: purchasing less frozen or fresh ready to eat meals, ordering fewer takeaway meals and no longer having the option to eat out. Although consumers are purchasing more fresh produce, they have also been stocking up with longer life ambient products, such as tinned vegetables, pasta, rice and UHT milk. These rapid changes have put acute pressure on supply chains to respond – either to supply more or to find new outlets for products previously intended for foodservice outlets. In the early stages of lockdown, this led to difficulties in sourcing ingredients, such as flour for baking and fresh produce to meet the increased demand.
2. Stress and strain placed on produce supply. During March and April, the UK is highly reliant on imports of fresh produce from abroad. With these longer supply chains, it is even more difficult to switch on and off demand, especially when crops need to be planned and grown. The resulting time lag has placed extra pressure on grocery retail leading to shortages of some fresh produce and limits on the number of items that shoppers have been permitted to purchase.
3. Online grocery demand. In response to the social distancing requirements at grocery stores and the number of more elderly households who are shielding or self-isolating, there has been a rapid rise in the demand for online grocery deliveries and ‘click and collect’ services. An older demographic, not previously inclined to buy groceries online, has entered the online marketplace causing a big uplift in the demand. Retailers who hadn’t previously had much online presence have had to rise to the challenge to increase what they can offer. Established online retailers have rapidly expanded delivery capacity in attempting to keep pace. With not enough online availability and long queues at supermarkets, consumers have also turned to local convenience stores and alternative routes such as home delivery from wholesalers, ‘take out’ services at pubs and very localised supply chains of different foods.
4. Packaging demand. During recent years, there has been a push to reduce food packaging, particularly plastics, and to find more sustainable packaging solutions. During the pandemic, the public has been less likely to want to buy loose produce in stores due to risk, and many ‘over the counter’ services have closed in supermarkets. This, coupled with the demand for cardboard cartons for home deliveries, has placed pressure on packaging manufacturers. Additionally, with more takeout services being used than previously, this has created a problem with packaging discarded in the environment.
5. Collaboration across foodservice, hospitality and retail supply chains. The dramatic fluxes in food demand throughout the pandemic have led to stranded food and suppliers wondering where to send the product originally destined for the foodservice and hospitality sector. This area has seen a high degree of collaboration, with wholesalers and suppliers working alongside retailers to relocate products to meet extra demands within stores.

Which of these trends is likely to persist once the restrictions are eased over the coming weeks and months?
1. E-commerce and online shopping. A segment of the population who weren’t previously greatly engaged with grocery shopping online – particularly from older demographic groups – have now had a taster of using online grocery services. A proportion of these are likely to persist, particularly as it isn’t clear when shopping in supermarkets will return to normal for households that are more at risk from COVID-19. The use of some alternative outlets, particularly local suppliers and local convenience stores, could also continue.
2. Plastics and cardboard packaging. Due to the ongoing increased use of home deliveries, additional pressure will continue to be placed on the packaging supply chain to continue the supply of card and plastic packaging.
3. Food poverty. With the rise in unemployment because of the pandemic’s economic impact, there has been an exponential growth in referrals to food charities to supply emergency food parcels. This is both a problem now and for the future. Additionally, during the last few months, the combination of a lack of food surplus available in stores and a significant proportion of food charity volunteers self-isolating (tending to be from older age groups), it has been very difficult for the sector to rise to the challenge of meeting the extra demand placed on food banks.
4. The change in working patterns and the extent to which workers will commute to a place of work. With more people being able to or having to work from home, it is likely that a return to the use of the office environment will be very slow and is unlikely to return to pre-pandemic levels. This has implications for the geography and capacity of foodservice, hospitality, and supermarket outlets, that previously highly depended on servicing places of work for footfall and demand. This will have an immediate and persistent impact on coffee shops, cafes, wine bars, and such like, that is likely to persist after the lockdown and into the future.

What do food businesses need to consider during the recovery period and when trying to ‘Build Back Better’?
Social distancing requirements. The social distancing rules will change the economics of some businesses within the foodservice sector. Higher risk businesses will have to wait longer before being able to reopen and then assess the impact of the COVID-19 safety requirements. Going forward, those safety requirements are going to be in the back of people’s minds, even after the current wave of the virus reaches very low levels of transmission within the community.
Adapting business models. For some businesses, they may find it easier to adapt to a takeout and delivery service provision, along the lines of those we have seen during the last few months of lock-down. For other businesses, this will be considerably more difficult, particularly for fine dining and restaurant chains where it is difficult to know how profitability can return within the current social distancing requirements.
The exposure of the supply chain to shock and its ability to be resilient. The resilience of supply chains has been thoroughly tested during the pandemic. In future, there needs to be more emphasis on local food supply chains to build greater resilience, with changes to procurement processes within some food businesses and within the retail sector. Nationally, particularly within the complexity of trade agreements and the current Brexit discussions, the whole issue of food security needs to be given far more airtime, with lessons learned about how businesses recover from this crisis.
Ongoing collaboration. In response to this crisis, we have seen a phenomenal amount of collaboration and cooperation between food businesses and sections of the supply chain to try and rescue stranded food product previously going to the foodservice and hospitality sector. In terms of having a more resilient supply chain in the future, preserving this collaboration could improve longer-term resilience, and could persist in the way in which the food supply chain realigns itself after the crisis.