Timeline: Impacts of COVID-19 on the global food industry6 Apr 2020
The number of people affected by COVID-19 continues to climb, with confirmed cases at more than 1.2 million and the number of deaths at nearly 70,000 worldwide as of April 6.
This timeline highlights key events affecting the food industry and how it is responding to the ongoing crisis.
Governments have ordered mass quarantines affecting more than a third of the world’s population. Some of the largest and strictest measures are in place in China, Denmark, El Salvador, France, Ireland, Italy, New Zealand, Poland, and Spain in an effort to stem the spread of the virus.
The European Investment Bank (EIB) unlocks €1.6 billion of financing for the agrifood sector to help improve its resilience during the outbreak. The funding aims to support private businesses along the supply chain, including those in food, bio-based materials and bioenergy. Loans are expected to range from €15 million to €200 million and will be targeted to support environmental protection and natural resource efficiency, renewable energy, innovation, competitiveness, and energy efficiency.
The UN Food and Agriculture Organization says world food prices fell sharply in March due to the Covid-19 pandemic and a drop in oil prices as governments prepare for an expected economic slowdown. Sugar prices were hardest hit, falling 19.1% from the previous month, with lower out-of-home consumption a major cause. Vegetable oil prices and dairy prices also declined. "The price drops are largely driven by demand factors, not supply, and the demand factors are influenced by ever-more deteriorating economic prospects," said FAO Senior Economist Abdolreza Abbassian.
Rice prices, on the other hand, rose for the third consecutive month on reports of stockpiling and potential export bans. The FAO also reports near-record wheat production, which it says could help shield global food markets, despite localised disruptions in some regions, mainly due to logistical issues.
The UK’s Food and Drink Federation announces a 16-week partnership with the recruitment app Syft to help the food and beverage industry meet demand. With hundreds of thousands of workers from other industries suddenly finding their jobs at risk, the partnership aims to move as many as possible into food and beverage sector employment, while easing staffing pressure and workload in the industry.
US meat processor Tyson Foods says it will pay $60 million in bonuses to its frontline staff, including truckers and factory employees who have continued to work during the crisis. The bonus of $500 per employee will be paid in the first week of July, the company said. The company has also pledged $13 million worth of community grants and products to non-profit organisations in communities where Tyson plants are located.
Ingredient suppliers Roquette and Cargill donate disinfecting alcohol solutions to European healthcare institutions. French pea protein specialist Roquette modified a production line at a pilot plant to make 5,000 litres of hydro-alcoholic disinfectant per week, which it will provide for free to around 20 healthcare facilities in the north of France.
Cargill, which makes alcohol for the drinks and health industry, made its first donation of 60,000 litres of disinfecting alcohol to the Dutch government in March to help relieve shortages in hospitals and medical centres. It says it is exploring ways to help other European governments through its network of European factories.
Industry organisations Food Industry Asia (FIA) and the ASEAN Food and Beverage Alliance (AFBA) call on governments to ensure unhindered supply of food and drink products across the region.
AFBA president Abdul Halim Saim said, “We are starting to see disruptions in the food supply chain, such as bottlenecks, when transporting food. Each country should review their existing food security policy as more needs to be done. Policy makers should involve the food and beverage sector in the process.”
Apart from its important role in food security, the Association of Southeast Asian Nations (ASEAN) is responsible for about 17% of the region’s GDP and employs about 34% of its workforce, according to the AFBA.
Vietnam aims to stockpile 190,000 tonnes of rice by June 15 to ensure enough the country has enough food during the outbreak. The country is the world’s third-largest exporter of rice behind Thailand and India, and the prime minister has ordered the suspension of new rice export contracts, at least until the end of March. In 2019, Vietnam put 200,000 tonnes of rice in storage for the entire year.
The US Food and Drug Administration announces it will provide temporary flexibility regarding nutrition labelling on packaged food during the pandemic. Food manufacturers will be able to sell food without a Nutrition Facts panel as long as it does not make any health claims, and lists allergens, net quantity and the manufacturer’s details, among other stipulations.
Bakeronline in conjunction with Puratos, which specialises in bakery and confectionery ingredients, launch a free service to help bakers set up an online webshop. The initiative aims to help bakers retain custom amid social distancing, allowing customers to place orders and pay online before picking up goods from the bakery at a specified time.
The United States overtakes China to become the country with the most confirmed coronavirus cases.
The UN’s Food and Agriculture Organisation warns that protectionist measures like tariffs and trade barriers could lead to food shortages and price rises, while restrictions on workers’ movements could also cause shortages of fresh fruits and vegetables, especially in countries that rely heavily on imported produce.
UK supermarkets are to be given access to a government database to help them prioritise deliveries to vulnerable people who have been ordered to stay at home. UK food delivery services have been overwhelmed with order requests, and many are booked out for over a week, leading to the government’s decision to help supermarkets prioritise the elderly and other vulnerable groups.
The UK’s Food Standards Agency publishes guidance for industry to help them respond to the outbreak. The advice covers good hygiene practice, management of employee sickness, and social distancing for specific food business settings.
Kazakhstan has banned exports of wheat flour, as well as carrots, sugar and potatoes, until April 15. The country is one of the world’s biggest exporters of wheat flour, sparking concerns that national protectionist measures could lead to food shortages in some countries. The Kazakh millers’ union since has condemned the measure, saying there are no local wheat flour shortages, and that it makes little sense to clamp down on flour exports when the country continues to trade freely in wheat.
Russia, the world’s largest wheat exporter, bans all grain exports for 10 days due to the novel coronavirus outbreak. The government has since proposed a grain export quota for wheat, corn, barley and rye from April to June to help stabilise the domestic market.
A lack of trust among consumers has prompted stockpiling efforts across the UK, according to Nicholas Carroll, Associate Director of Retail at Mintel. He says supermarkets must ‘flatten the curve’ to ensure supply.
As early as late February retailers were bracing themselves for a spike in demand and even ahead of the measures introduced last week regarding social isolation, some 10% of shoppers had stockpiled goods according to Mintel’s latest data (consumers questioned on 13th March). As the situation develops and individuals are being forced to spend longer indoors, the focus is moving to health and fresh categories.
The current impact has been indiscriminate, affects the largest chain and local businesses equally, with all struggling to fulfil the heightened demand. Enforcing of limits on select lines was a required step by retailers. In the same way scientific experts have talked about the need to ‘flatten the curve’ regarding the outbreak, this is what retailers are having to do in terms of demand to ensure supply chains have enough time to react and crucially all can have access to the products they need. This needs to be supported by a sustained campaign of calming shoppers. Clearly, the continued ‘stockpiling’ is coming from a lack of trust that products will be available long-term, and retailers need to reinforce the point that there is enough to support the nation in this difficult time.
There has been an unprecedented demand within the grocery sector in the recent weeks, and whilst retailers are reacting as quick as they can to this – the mass closure of the foodservice sector in the UK will only place further demands on the in-home grocery sector. There is, therefore, a need for foodservice to play its part in helping to fulfil the supply of food and drink to consumers.
Packaged food and meat companies including General Mills, Tyson Foods, Mondelez International, Kraft Heinz and Campbell Soup have seen sales growth of 10-20% over the past month, as American consumers are stocking up on shelf-stable items and comfort foods. Meat, potatoes, milk and snack foods like popcorn, crisps and pretzels are among the most in-demand products, according to Nielsen data.
Rabobank has analysed the immediate impacts from the coronavirus on both alcoholic and non-alcoholic beverages in USA. The recent lockdowns and closures of bars and restaurants is understandably hurting the alcohol industry, however stocking up at grocery stores in bolstering other drink sectors.
It’s a trying time for alcohol – whereas in many states bars, pubs and nightclubs have closed, many restaurants remain open for takeaway and delivery. In some states restaurants have been able to add alcohol to their delivery menu, but even with this allowance, on-premise alcohol has taken a huge hit.
Rabobank predicts that if the ban on sit-down dining lasts 2 months, the industry could see losses of $15-$20 billion in alcohol alone. Off-premise on the other hand is seeing growth in sales as consumers stock up for isolation. Shoppers are particularly looking at larger quantities and lower-priced products, especially from e-commerce channels. Delivery platform Drizly has stated their sales from new customers are up 500% compared to just a week ago and wine.com echoes this as they saw sales triple two weeks ago.
FoodDrinkEurope warns that border controls in the EU are disrupting food supplies, and calls on the European Commission to do more to ensure food security.
“We welcome the recent Commission guidelines on border management as a good first step. Despite these guidelines, however, we continue to face severe disruptions,” the trade association said.
Recommended measures include:
-Safeguarding the flow of agricultural products, packaging materials, and manufactured foods and drinks across European borders.
-Finding solutions to manage labour shortages caused by travel restrictions.
-Monitoring the price of raw materials and transport, as well as unfair trading practices.
In addition, it urges countries and institutions to prepare contingency plans to allow for a possible shortage of workers.
Global food supplement chain Holland and Barrett imposes limits on products intended to boost immunity amid panic buying. It also put in place a one-hour shopping window dedicated to its most vulnerable customers.
UK farming organisations issue an urgent call for British people to work on farms amid a growing worker shortage due to travel restrictions. About 70,000 seasonal workers go to the UK each year to pick fruits and vegetables. Increased border controls combined with coronavirus-related clampdowns on travel have led to a low number of farm workers just as UK consumers are stockpiling food.
Border restrictions imposed by more than a dozen EU countries, in response to the coronavirus outbreak, are disrupting food supplies, said representatives of the industry and farmers. A joint statement, issued by FoodDrinkEurope, the trading body for the European food manufacturing industry, Copa-Cogeca, which represents farmers, and CELCAA, the EU umbrella association for trading companies in the food and commodities sectors, said that because of these measures, “delays and disruption at country borders have been observed for the delivery of certain agricultural and manufactured products, as well as packaging materials.”
The European Commission and EU transport ministers agree to establish “green corridors” for essential freight moving between Member States, including food.
China reports a major milestone in its tackling of the crisis: no new domestic cases for the first time since the outbreak was identified in December. More than 81,000 cases have been confirmed in China over the past three months. The country continues to report cases contracted elsewhere, which have been imported to the mainland, and these have now outnumbered locally contracted cases for several days.
Cargill says disruptions to its supply chains have been limited, and it has put in additional measures to ensure its employees’ safety so they can keep its major production facilities open. These include prohibiting international travel and limiting domestic travel, offering shift flexibility and additional cleaning and sanitising procedures.
The US Food and Drug Administration says it will reduce safety inspections of US food facilities to protect food firms and FDA staff. Inspections will only go ahead if they are considered “mission critical”. The statement follows its previous announcement that the agency would postpone most foreign facility inspections through to the end of April.
The World Health Organization urges Southeast Asian countries to “do more, and urgently” to contain the virus. Dr Poonam Khetrapal Singh, Regional Director, WHO South-East Asia Region, says continued efforts to detect, test, treat, isolate and trace contacts are of critical importance, as are simple public health measures like washing hands, social distancing, and covering coughs and sneezes.
On this video, Martin D'Agostino, virology section manager at Campden BRI, answers some of the key questions bakers and other food suppliers have regarding the COVID-19 pandemic.
The World Health Organization declares COVID-19 a global pandemic.
The UK government asks supermarkets to increase home delivery services to help those in self-isolation maintain access to food.
The United States’ largest meat processor, Tyson Foods, says the virus has disrupted meat shipments to China. It is the latest to implement travel restrictions for its employees due to the outbreak, including suspending all international travel from the US, and restricting the number of employees attending large events and conferences.
Other multinationals have taken similar measures, including Nestlé and Cargill.
Campbell’s Soup announces it will increase production of canned soup in response to increased demand as consumers stockpile shelf-stable foods.
In regions across the world, from Australia to Europe, the United States to Asia, consumers have been stockpiling dried goods, frozen foods and shelf-stable products in response to the outbreak – as well as hand sanitiser and other household essentials. Some supermarkets, including Waitrose and Tesco in the UK, have started rationing certain products as a result.
March 2, 2020
New Hope Network announces that Natural Products Expo West is to be postponed for the first time in nearly four decades.
Due to be held on March 3-7 in Anaheim, California, with an expected attendance of more than 85,000, several major exhibitors had already pulled out of the event, including KIND Bar, Whole Foods and Vital Farms. On March 1, New Hope had said it intended to go ahead with the show, despite expecting a 40-60% drop in attendance. With attendees from nearly 100 countries, many had already arrived in California, but the organisers decided postponement was the best course of action to prevent potential further spread of the virus.
February 28, 2020
US-based FMI, the Food Industry Association, releases a “Coronavirus Preparedness Checklist” for the food industry.
“FMI understands that a pandemic, if it develops, will necessitate engagement across a host of areas including health care, store operations, supply chain, food safety, workforce, emergency management and media,” it said in a statement.
February 27, 2020
New Zealand dairy cooperative Fonterra reaffirms its 2020 forecast despite the outbreak. Fonterra is the world’s biggest dairy company and New Zealand is the biggest exporter of dairy products to China. In a statement, Fonterra CEO Miles Hurrell said there were “potential significant risks” to the business from COVID-19, but it had already contracted a high percentage of the financial year’s milk supply, helping it to manage the impact.
“There has been a slow-down in processing of containers at ports and we are managing the flow of our product into China carefully to avoid congestion,” he said. “Currently, our product is continuing to be cleared by customs and quarantine officials.”
He added that many restaurants were closed because of restricted movement within China, which was having a major impact on its foodservice customers.
February 26, 2020
Danone warns its first quarter earnings are likely to take a €100 million hit, mainly from its Mizone water business, which has a manufacturing facility that remains closed in Wuhan, China.
Danone generates about 10% of its overall sales in China, and about 30% of its infant nutrition sales. The company lowered its sales growth target for 2020 to 2-4% from 4-5%.
February 24, 2020
Italy’s food industry trade association, Federalimentare, issues a warning that the closure of northern Italy could impose a brake on the region’s manufacturing sector, with the food industry particularly at risk.
The association’s president, Ivano Vacondio, said disruption caused by the outbreak would have a disproportionate effect on country’s economy as a whole. The northern regions of Lombardy, Veneto and Emilia Romagna together account for 41% of Italy’s GDP, and represented 52% of the Italian food sector’s production in 2018.
February 24, 2020
The Coca-Cola Company highlights potential disruption to supply of non-nutritive sweeteners in its annual report.
“As a result of the outbreak of the novel coronavirus COVID-19, beginning in January 2020, our suppliers in China have experienced some delays in the production and export of these ingredients,” it said. “We have initiated contingency supply plans and do not foresee a short-term impact due to these delays. However, we may see tighter supplies of some of these ingredients in the longer term should production or export operations in China deteriorate.”
January 30, 2020
The World Health Organization declares the virus a global health emergency.
January 30, 2020
Mondelez International says the local Beijing government has asked it to keep two of its four manufacturing plants in China closed, in an effort to prevent further spread of the virus. The company’s CEO Dirk van de Put said in an earnings call that the company had already implemented voluntary travel restrictions on its employees, both within China and international travel to China. Its sales in the country account for about 4.5% of the company’s annual revenues.
January 28, 2020
CEO of the US spices and seasonings specialist McCormick & Company, Lawrence Kurzius, says coronavirus is likely to affect its in-China sales. The company has three manufacturing facilities in the country, including one that remains closed in Wuhan where the virus originated. McCormick estimates that about 7.5% of its business is reliant on China.
January 24, 2020
First confirmed case announced in France, also marking the first case in Europe.
January 21, 2020
First confirmed case announced in the United States.
December 31, 2019
COVID-19 outbreak is first identified in Wuhan, China.
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