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Food Business

How is COVID-19 changing the food industry?

In order to understand food system consolidation and resilience, we’ll be monitoring COVID-19’s impact on the structure and economics of the food industry, identifying where old business models are forced to expire and where innovation is shaping new alternatives. We’ll also be looking at where companies are prioritising food that is healthy and affordable, and where private sector solutions to food access problems are ensuring that vulnerable groups receive the food they need. In the long-term, will the changes we see in this sector hinder or accelerate progress towards a food system that is healthy and sustainable for human and planetary health?

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Tinned tomato demand causes ripple effect up the value chain.

A 30% increase in UK demand for tinned tomatoes has led to Italian suppliers warning of restrictions being placed on UK retailers.  Compared to other countries the UK has seen higher demand increase for tinned tomatoes, placing capacity pressures on suppliers, potentially risking the security of future supply.”

Calls for sustainable financing gain traction

With so many businesses under significant financial pressure, including many in the food sector, the call for more sustainable financing to re-boot the economy is gaining traction. Both investors and governments can seize the opportunity to attach future-proof conditions to bailouts and capital, in order to shift the global economy onto a more resilient, sustainable and equitable footing.  In our Plating Up Progress analysis later this year, we will be shining a light on how UK food businesses are progressing and highlighting where key issues remain unaddressed.

Waitrose provides additional support for farming communities

IGD reports that Waitrose is providing additional support for farming communities and overseas suppliers.  The additional package (£200,000) will provide advice on social distancing and physical assistance in the shape of food parcels and sanitisation kits.  The retailer is also working closely with smaller suppliers in the UK in order to help vulnerable local suppliers to continue to sell their produce.

McDonalds closes UK restaurants and reports declining sales

Even the biggest restaurant chain in the world is affected by coronavirus. McDonalds, who have closed UK restaurants but not, for example, restaurants in the US, are seeing a significant decline in sales during March.  Impacts may be felt for years, possibly meaning fewer new restaurant openings in the future.

COVID-19 impact on food businesses: IGD summary

IGD’s update shows:

  • Morrisons offering 10% discount to NHS staff
  • Retailers expanding their product innovation and services for online deliveries.
  • Co-op boss taking a 20% pay cut
  • Deliveroo finding new partnerships to grow its customer offering
  • KFC reopening 11 restaurants for delivery only via Deliveroo, Just Eat and Uber Eats.

Pret a Manger re-opens stores near London hospitals

Pret a Manger is opening 10 stores located near London hospitals in order to provide fresh food (a limited Pret range) at a 50% discount to NHS workers, as well as aiming to donate 7,000 meals a week to charities.

Other companies followed suit in tailoring their services to make it easier for NHS staff to access essential food.

Morrisons offer 10% discount to NHS staff

Along with Co-op, Morrisons are offering a 10% discount to NHS staff until mid-July.  All supermarkets offer some kind of prioritisation for health service and care workers (mainly dedicated shopping times) but we have yet to see discounts and price offers across the sector for key workers or (economically and clinically) vulnerable groups.