What are the biggest challenges for the food industry right now?

Every week a new challenge for the food industry emerges

Recently, we’ve received the news that the weather has impacted on the UK’s wheat production with wheat beginning to germinate while still in the ear. With yields down it looks like shortages and price rises will follow. Added to the uncertainty that Brexit is going to cause for both consumers and producers, packers and processors Q3 and 4 of 2020 and Q1 and 2 of 2021 shows no signs of being any easier.

No one wants to be accused of being pessimistic or a harbinger of doom

Yet it is worth realistically assessing where we all are and what can possibly be done to mitigate the challenges facing the food industry right now and in the near future.

This is not over and we are in it for the long haul

As far as processors and food packagers are concerned, they have other things on their mind. For example, in a recent survey undertaken by the Food Industry Executive respondents cited a number of profound challenges that are hitting them now and look like continuing into the autumn and even beyond.

It appears that employees have taken the government’s Covid 19 message to heart

Many workers are still loathe, in parts, to return to the workplace. The challenge is a) to find the right staff who are happy to work while ensuring their health and safety. This will include possibly segmenting workers by age and risk. In addition, the use of PPE across the board will cause significant costs alongside more frequent cleansing procedures. Shoppers will have already felt the costs trickling through to their weekly shop.

We still see a shortage of some products in shops right now

Strong plain flour is always in short supply and there has been a loss of production capability throughout the food and drink industry as they battle social distancing and all the changes in routine and demands as a consequence of Covid.

Are empty spaces on supermarket shelves going to be part of the new normal?

Judging from consumers’ changing behaviours stores will have battened down the hatches and will have sorted out their own supply chains upon which they can rely. The desire to bring in new lines or products is very low on the agenda. In fact, the Food Industry Executive survey cites ‘changing demands is creating a larger supply chain risk.’ With the change in customs regulations at ports when Brexit happens it is likely that combined with Covid we may well see some spaces on supermarket shelves.

Suppliers themselves have been keen to embrace tech solutions to the current situation

For example, many repairs have been undertaken remotely with the use of headsets etc. I wrote about this a while back.Walkers crisps have been particularly proactive in this area. However, not all companies have been able to commit to new technology and production equipment investment. The supply chain that services production facilities have been forced to promote their spare parts and technical support more aggressively. In fact, they have suffered an almost 10% drop in revenue as a consequence of Covid.

Suppliers to the food service channels have been hit very hard

With many city centre restaurants and food shops remaining closed for now and the foreseeable future more than half of processors and packers had felt the pinch. However, traditional retail has made a massive impact as people buy more to cook and eat at home. So, although 14% of respondents reported that they had seen a drop in demand, but only 9% had cited that demand had risen. If the food industry can show resilience it is likely that eventually they will come back stronger than they were before the pandemic. No matter what our thoughts are about this situation it has been an extraordinary opportunity to do some thorough housekeeping and attack business in a more proactive and contemporary manner.

Are we creating an unhealthy binary approach to work?

I was particularly interested to see that more than 37% of the companies surveyed had said that over half of their employees have shifted towards remote working. This will continue for some roles and it will cause a complete turnaround in how employees are onboarded and how their expectations will change. For anyone concerned about hiring people they never meet face to face please read my book on remote onboarding. If you would like a copy just send me a message to mike@meyrickconsulting.com.

My concern for the food industry and beyond is the evolution of a two-tier system where some people can retreat to their homes to work and others that are forced out into the workplace and into public transport. What will the long-term impact of such a binary approach be I wonder? What are your views?