The Impact of COVID-19 on Food and Beverage Industry
Six States of ASEAN group, as Indonesia, Malaysia, the Philippines, Thailand, Vietnam and Laos have already announced some forms of COVID-19 related control measures and restrictions. Social distancing is strongly advised by healthcare professionals across APAC in efforts to stop the spread of COVID-19 pandemy.
Due to lockdown and MCO, Food & Beverage companies across APAC are facing significantly reduced consumption as well as disruption of supply chains. At-home consumption has increased, but out-of-home consumption, which historically generates the highest margin, has come to nearly a standstill. People are now reluctant to consume: everywhere you can feel the fear to grab the virus, even from food.
COVID-19 and Food Delivery: things are changing faster than we thought.
Data confirm that the F&B industry is facing a big impact. Because of the Covid-19 emergency, today, more than ever, smart working represents an opportunity to limit transmission while, at the same time, it grants continuity to work activities. STAY HOME! People must stay at home to prevent the virus from being spread around: food retailers duty has become making food availability as safe as possible. According to the Practice Head of Consumer Beverages at GlobalData, Arvind Kaila, this means that food deliveries and takeaways will be more and more usual. COVID-19 appears likely to create a long lasting effect for online retailers, by inducing online-sceptic consumers to move spending money away from physical stores with the goal to reduce time in public places. This is going to drive the long-term growth of e-commerce as the unengaged consumer segments rely mostly on online shopping for day-to-day purchases during the isolation (MCO). That’s why bulk formats and packs suited to e-commerce distribution are already growing in popularity: many supermarkets in the APAC region are already and promptly answering to the demand of online home delivery services. In this situation, packaging companies should take this opportunity to invest more in packaging research, design, innovation, and production and delivery practices adapted to e-commerce.
How may F&B Companies move to minimize the impact of covid-19? Business players must be able to survive for the next months and meanwhile support their business continuity. This means that many of them need to change their strategy, being able to adapt their businesses to this difficult situation. Between January until February 2020, takeout food purchases increased 7%, so why not you focus sharply on food-delivery? Remain positive: You just need to make some reviews on your strategy.
Here are some tips for you:
- rely on food delivery: focus on promotion for takeout deliveries, think about smart workers;
- identify good products that are easy to sell;
- add good stocks;
- digitalize products into an easy-to-share catalog;
- promote the use of digital payment to avoid hand contacts;
- increase the level of sanitation: try to change for more hygiene-driven features in the short term, in which consumers may view disposable packaging as positive.
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The SmartBite Team