The food industry we knew in 2019 is gone and is never coming back.
Try as companies might to recreate the success of years past, there is a new normal and it has changed the industry forever – think QR codes, think distancing, think vaccines.
Many companies have not acknowledged a permanent change and are unprepared.
Take farmers, for example. How will they pick their produce if international travel continues to be limited? The fruit on the vine over several seasons will be well and truly spoiled by the time backpacker labourers return.
If we could have planned we would have thought increased mechanisation, new varieties, protected cropping, new geographies, and new labour models.
We didn’t see the need for planning and I fear many still do not.
There needs to be a new way forged; company boards need to understand why we are never going back, then embrace what has happened and a new future.
It sounds perverse, but many good things have come out of the pandemic and have changed food and agriculture forever, not least the impact it has had on consumer preferences, buying habits and technical competence.
Most people now see that:
- JobKeeper has proved that everyone needs a living wage for a vibrant economy;
- universal health care is good for the whole community if for no other reason than to protect ourselves;
- we must trust science and need it to help plan ahead, such as new research on multiple and mixing jabs;
- there are benefits in planning instead of just responding – in government and in running our businesses;
- technology can help us – we need more automatisation, digitisation and artificial intelligence;
- we need a better appreciation of the benefits of human interaction – the euphoria of being at home has worn off and we need others so we can interact and get better work outcomes;
- we need to help our own and neighbouring countries even if we don’t like their politics, because we are all interdependent.These new ways of looking at the world are here to stay and Covid’s continued threat will reinforce them – the gate back to 2019 is slammed shut and it can’t be forced open.
Covid-19 has delivered the good, the bad and the ugly for food and agriculture. Companies need to recognise this and then embrace the future. Here is my road map:
Good
Collaboration like never before has brought multiple vaccines to market in record time. This is proof for the food industry that there are advantages to collaborating with companies and researchers for efficiency, gut health, waste and food distribution.
Long-term permanent lifestyle changes need to be catered for, such as the re-emergence of breakfast leading to new cereals, and new product development for at-home dining for all meals.
The improved digital fluency of the population – not just QR codes – means a proliferation of online opportunities even with the aged. Shopping from home and new ways of engaging with customers have given a significant shot in the arm for domestic and overseas sales and opportunities.
“Buy now, pay later”, and other iterations, allow customers the flexibility they want for their monthly budget management and does not require a credit card, making online direct consumer sales easier to generate.
Bad
Privacy is out the window with tracking apps and the like, while data security has and will become a major issue.
Tech companies aren’t the only bad boys, so, too, are governments and all sorts of corporations.
While we accept this intrusion for the moment, we need to watch it doesn’t become permanent.
This is a double-edged sword for food companies keen to tap the online market and build an online presence using data analytics.
Food service, hotels, pubs and clubs are down, which means waste is now more prominent in homes, so packaging will be a major issue for food companies.
Ugly
Boards need to focus on protecting the workforce with things such as air filtration, physical barriers and the reconfiguring of facilities for distancing.
Boards should consider getting staff vaccinated now and incentivising them to do so.
We will continue to see hybrid work-from-home models. This is an area that has generated the most discussion and care needs to be taken to stop “goofing off” and deteriorating performance.
Many jobs can’t be done from home, while others need interaction with colleagues on an ad hoc basis.
Supply chain challenges for out of stock and new markets have been found wanting. This is more complex than out of stock on shelves, it is a problem as FMCG companies go to food service or direct to customer.
Where to from here
- Redesign factories and offices for air filtration and social distancing. Workplaces will need to be made more inviting and work from home properly analysed.
- Promote and increase mechanisation and make labour more efficient, from fruit harvesting to manufacturing.
- Look at collaboration opportunities with other companies, research houses and universities. Get more relaxed about sharing intellectual property.
- Consider promoting online and artificial intelligence to get to new markets and customers.
- Refigure the supply chain for retail/ food service or direct to customer, alone or in collaboration.
If you can put all this on the next board agenda, you will be well on the way to planning for the next wave and acknowledging the food world has changed forever.
David Williams is founder of corporate advisory firm Kidder Williams.