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The Big Picture

How is the UK’s food system being affected by global and national changes and challenges?

The wide-reaching consequences of Covid-19 led to a new and sharper focus on food supply chains and public health in 2020. With Brexit on the horizon and climate change increasingly on the political agenda, how will these challenges and opportunities shape the UK’s food system and the health of the population?

We’ll be looking at retail food prices and how the changing geopolitical landscape may affect these, charting the impact of Britain’s new trade deals on fruit and vegetables supply chains, and exploring whether the long-term effects of Covid-19 are changing our eating and buying patterns as citizens.

Finally, with Covid-19 having impacted on health care systems and highlighted pre-existing health inequalities, we’ll look at how population health continues to be impacted as a result of these converging issues.

Click here to see our UK Food Tracker in full.

Food supply chains

The end of the Brexit transition period and the imposition of new trade agreements has led to issues with the UK’s food supply chain, with reports of food shortages in Northern Ireland. Post Brexit border arrangements led to the chief executives of companies including Sainsbury’s, Marks and Spencer and Tesco writing a letter to Brexit Secretary Michael Gove last week, warning that shortages would worsen when a Brexit grace period (which has exempted retailers from some of the new NI arrangements), ending on March 31. Tesco warned that ready meals, meats, and citrus fruits had been most affected  given these products short shelf lives. Meanwhile Sainsbury’s have formed a new partnership with Henderson’s Group/Spar NI to plug some of the anticipated product shortages in Northern Ireland. In England and Wales shoppers have also reported food shortages of certain items (chiefly fresh fruit and veg) following the departure of Britain from the EU. 

Currently new paperwork is required to import and export from Great Britain which has particularly affected animal products. Across the UK, exporters have been reporting hold-ups due to new trade deal rules, with the British Meat Processors Association (BMPA) warning that trade partners may start to look outside of the UK for meat supplies. 

The UK’s health

The knock-on effects of the UK’s lockdowns and Covid-19 are continuing to impact on the population’s health. ONS data for 2020 found that the Covid-19 pandemic has caused excess deaths to rise to their highest level in the UK since World War Two. There were nearly 85,000 more deaths than would be expected based on the average for the previous five years. This represents an increase of 14% – making it the largest rise in excess deaths for more than 75 years and the worst death rates since 2008 when the age and size of the population are taken into account.  

Hospital waiting lists continue to rise as the second wave of infections has once again forced many hospitals to cancel non-urgent and non-Covid related appointments. Data from NHS England found that a record 4.46 million people are on the waiting list for routine treatment, with 192,000 now having been waiting over a year for treatment.  A study has also found that from October 2020, when coronavirus cases began to rise rapidly, heart admissions to NHS hospitals dropped by up to 41% compared with pre-pandemic data. This suggests that people are not seeking urgent treatment as they should, a pattern seen before during the Spring lockdown. 

Citizen food behaviour

Supermarkets saw strong sales over Christmas with the Out of Home sector shut down across most of England and the imposition of tier 4 rules leading to many households changing their Christmas plans at the last minute. Kantar data found that British supermarkets had their busiest month on record in December, with shoppers spending £11.7 billion on groceries during the Christmas period.  

As evidence continues to emerge around the impact of Covid-19 on UK shopping and eating habits, a new study which surveyed adults from 4 countries during May-June 2020 found that British citizens reported increasing both fruit and veg consumption and a decreased intake of takeaways and ready meals during this period of timeThis tallies with a recent survey undertaken by Mintel which found that 23% of Brits reported eating more fruit and veg since before lockdown. Moreover, a quarter of younger Millennials (aged 21-30) say that the pandemic has made a vegan diet more appealing. A vegan diet is proving more attractive to 12% of Brits and 22% of Londoners since the start of the pandemic according to the survey. A recent review piece on the BBC this week has also pointed to research suggesting an increase in ethical consumerism following the pandemic. 

The Economy

The challenging combination of Brexit trade deal uncertainty and Covid-19 saw British Retailers suffer their worst annual sales performance on record in 2020 according to a report by the British Retail Consortium. While food sales growth rose 5.4% compared to 2019 (driven by the closure of the out of home sector and subsequent increase in supermarket sales), non-food sales fell about 5%, with an overall fall of 0.3%. This was the worst annual change since the BRC began collating the figures in 1995. Nearly 180,000 jobs in the retail sector were also lost last year as big names such as Arcadia folded. 

December’s Consumer Price Index data released by the ONS in January showed an increase in inflation rates compared to November. The 12-month rate was 0.6% in December 2020, up from 0.3% in November; on a monthly basis, CPI grew by 0.3% in December 2020, following a 0.1% fall in November. However, despite an increase in inflation overall, the retail price of food fell between November and December, with the largest fall coming from vegetables and potatoes. 

Citizen food behaviours – Dec 2020 to Jan 2021

Diverging evidence on the effect of the past nine months on UK citizen shopping, eating and cooking habits continues to emerge. A survey of 2,000 people by IGD undertaken last September and October found that more than three-quarters (83%) of consumers changed how they planned, purchased and prepared their food during the first national lockdown, with over half (51%) claiming to have eaten more fruit and vegetables

Meanwhile, to coincide with the launch of new tools as part of the government’s Better Health campaign, a survey of 5,000 adults by PHE found that since the pandemic began, 35% of people said they had snacked on ‘unhealthy food and drinks at least once a dayOther behaviours reported as part of the survey suggest that almost one third of smokers had smoked more since the second national lockdown, while 23% of drinkers said their alcohol intake had increased. This supports recent findings of Alcohol Change UK, who found that one in three Brits believes they drank in excess last year compared with 2019. A record number of people have signed up to ‘Dry January’ challenge, with 6.5 million people signing up to take part – a 67% rise compared to last year. 

The trend is similar elsewhere, with a study of over 1,100 Dutch adults finding that roughly a third reported eating and snacking more than usual during the pandemic, while up to 15.1% reported eating less, with those who had been in quarantine more likely to report that the pandemic had had a negative impact on their diet 

Fears of food shortages – Dec 2020 to Jan 2021

In the UK, fears of stockpiling were back on the agenda as first the possibility of a No Deal Brexit, and then the UK’s third lockdown, caused both suppliers and citizens to once again have to worry about the availability of food on supermarket shelves. On December 13th, ahead of wide-spread reports that fresh fruit and veg would be hit by a No Deal Brexit and a backlog of lorry drivers at Dover following the closure of ports amid alarm at the new Covid variant, the British Retail Consortium (BRC) said ongoing uncertainty made it harder for firms to prepare for the New Year – warning shoppers to not buy more food than usual. In January, new nation-wide lockdown restrictions led to a surge in demand for online shopping slots with ASDA, Tesco and Sainsbury’s moving to reassure customers and recommending they ‘shop considerately.’  

However, with more people now in hospital with Covid-19 than during the first wave of infections in April, supply chains are being affected by increasing numbers of the workforce self-isolating or quarantining. The Grocer reported that staff absence rates have trebled in many parts of the country since the start of December, with supermarket executives warning that should current rates of worker absence continue to rise, distribution will be severely affected. At the time of writing (11th January), Ocado had become the first retailer to warn of product shortages due to increased demand for online shopping services, staff sickness and self-isolation. However, the closure of the Out of Home sector once again is likely to see retailers continuing to benefit from increased sales, with December 2020 the sector’s busiest month on record according to Kanta.

Food prices – Dec 2020 to Jan 2021

Although the agreement of a trade deal between the UK and the EU on Christmas Eve assuaged fears of new tariffs leading to a hike in UK food prices, globally the impact of Covid-19 on supply chains is impacting on food prices leading to growing concerns around increasing food insecurityWorld food prices reached a six-year high in November, with the FAO reporting a 6.5% increase in its food index in the 12 months to November. This was the largest monthly increase since July 2012. Cereal prices were almost 20% up on a year ago, owing to a combination of poor harvests and stockpiling attributed to the pandemic. 

 

Covid-19 and the economy – Dec 2020 to Jan 2021

The effects of Covid-19 on the UK’s economy continue to be felt, with data released by the Office of National Statistics (ONS) in December showing that inflation fell in NovemberThe Consumer Prices Index (CPI) 12-month rate was 0.3% in November 2020, down from 0.7% in October. Notably, food and non-alcoholic beverages resulted in the largest downward contribution to the CPI. Covid-19 was also reported to have highlighted pre-existing disparities between health care provision in rural and urban areas. A report by the Nuffield Trust found that while the number of Covid cases in rural areas was lower than in big urban centres, the pandemic’s impact on services has been much greater in rural areas with implications for NHS recovery post pandemic. One such example is cancer care; although the number of patients seen by a consultant for a first appointment fell significantly after March across the NHS, in rural areas the fall was 66% compared with 58% in urban areas. 

09/12/2020 – Fortnightly round-up

As the UK death rate from Covid-19 passes 60,000, the former Chief Medical Officer for England has suggested that the UK was so badly affected by Covid-19 compared to other countries due its high levels of obesity and deprivation. Commenting on the need to change the food environment, Dame Sally Davies commented that our poor public health – whether it is deprivation, overweight, or other chronic illnesses, alongside crowding in urban areas – have led to a much increased death rate over what we could have had if we had a healthier basic population. 

Typical UK diets do appear to have been impacted during the pandemic. A survey of 5,000 consumers in 10 European countries released by EIT Food, found diverse responses in citizen purchasing and eating behaviours during Covid-19with people in the UK increasing their consumption of fresh fruit and vegetables in line with other European countries during the pandemic – up 33% and 31% respectively compared with before the outbreak. However, the British were found to have experienced the largest rise in consumption of convenience foods (29%), alcohol (29%) and “tasty treats” (34%) suggesting that these may have provided a counterbalance to any more health promoting behaviours recorded. 

UK grocery retailers continue to see strong sales as the Out of Home sector was once again forced to close in November. Data from Kantar found that grocery sales hit a record high in November as lockdown II began and people started their Christmas shopping. Grocery sales rose by 11.3% in the 12 weeks to November 29th.

The food industry however is now increasingly focused on the impact of Brexit, once the current transition deal ends on January 1st 2021. A survey of consumer behaviour from Lumina Intelligence, found 6% of shoppers had already begun stockpiling food items due to fears of shortages in the new year with over half worried or ‘very worried’ about the impact of Brexit. Meanwhile, the Chief Executive of the Food and Drink Federation warned that Brexit may cause more disruption to the UK’s supply chain than covid-19 did, with border checks and import tariffs both key concerns. 

With a No Deal Brexit appearing increasingly likely as talk fail to progress, the Chair of Tesco forecast that the price of food could rise by an average of 5% (and brie by up to 40%) without a deal, confirming that Tesco have been stockpiling non-fresh food as they prepare for potential disruption in January. The UK is particularly reliant on imports for the majority of fresh fruit and vegetables, as this recent brief from the Food Foundation and SHEFS illustratedOne area where there has been clarification was the announcement today that supermarkets will be given extra time to phase in new checks, with a ‘grace period’ of three months, ensuring food supplies from Great Britaito Northern Ireland aren’t disrupted from 1 January – whether or not there is a Brexit deal.