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Coronavirus: changing food fundamentals, now and long-term?

Here are some thoughtful insights from just-food.com – an excellent editorial that debates panic buying, empty shelves, and how food retailers and their suppliers will adapt to meet the needs of the next few months.

Writes Andy Coyne, deputy editor, of just-food.com….

Forget just about everything you thought you knew.

That might be the best advice at the moment as we all get to grips with the whirlwind that is the deadly coronavirus outbreak and come to terms with new ways of living on a daily basis.

Unsurprisingly, given we are talking about an outbreak so virulent it has effectively locked down great European cities such as Paris and Madrid and US states such as California within the space of less than two months, forced many of us to work from home, stay away from loved ones and cancelled most of our leisure pursuits, the industry you work in and we write about has been fundamentally affected, too.

Our relationship with food as individuals or as a society is a complex one and how ever sophisticated we become and how ever used we get to being able to get whatever we want whenever we want it, there seems to be a fear deep within us that it could just all run out one day.

It is noticeable how instinctively some, especially in the UK but in other countries including the US and Australia, have reverted to hoarding or stockpiling food products despite there being no obvious shortages, as if they are responding to a crisis other than the one we’re in.

Rethinking store ranges

But the more fundamental question for the large retailers (and their suppliers) is what they do in terms of range.

It is noticeable how instinctively some, especially in the UK but in other countries including the US and Australia, have reverted to hoarding or stockpiling food products despite there being no obvious shortages, as if they are responding to a crisis other than the one we’re in.

Supermarkets have had to respond to the resultant emptying of shelves by limiting the sales of certain items and by creating designated shopping times for the elderly and vulnerable.

For years we have been told that shelf-stable, centre-aisle products were out of fashion and natural evolution would see them replaced by the funkier, fresher lines from challenger brands.

Little companies with their bright ideas were the future while the large food companies with their tired old lines seemingly faced a steady decline.

Old lines enjoy resurgence

Whilst coronavirus hasn’t necessarily changed that dynamic in the long term, it has given supermarkets pause for thought just now.

A lot of the longer shelf-life lines are exactly the things people are buying during this crisis. Meat is also selling well when all we have seemed to talk about for the last year or so is plant-based meat alternatives.

US investment bank Sanford Bernstein announced recently it is “tactically upgrading” a number of long-standing US food firms because of coronavirus-related sales.

Conagra Brands, Campbell Soup Co, General Mills, Kraft Heinz and JM Smucker were moved from a share rating of ‘under-perform’ to market-perform by Sanford Bernstein, which said it was expecting a sales lift and broader economic uncertainties to support stock valuations in the near term.

Canned soup, pasta, peanut butter, ready-to-eat cereal, and granola bars were among the categories that had experienced the most significant incremental sales growth of late, the bank’s analysts said.

It is in that context supermarket groups are taking a long hard look at what they are offering and making adjustments. The ‘nice to have’ and newly emerging is being replaced to make space for the essentials.

It’s a situation that is likely to last for a while but, unless all the medical experts are wrong, this virus will peak and we will gradually return to normal. The question is what will happen then? What will the new normal look like?

What is important is that those retailers don’t turn their back on SME food brands in this time of crisis.

In the UK, London-based food start-ups network and consultancy Young Foodies has criticised a decision by some supermarkets to de-list the products of small brands to concentrate on core product offerings during the Covid-19 outbreak.

The grocers face a difficult task at the moment and are unlikely to be be able to make everyone happy but they should reflect that the best start-up businesses will be the food majors of tomorrow….


Great information resource from just-food.com

You can keep tabs on the latest developments in how the Covid-19 outbreak is affecting the global food industry by following its free-to-read, rolling blog here, updated throughout the day each working day….

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