Despite being under intense pressure in the past few weeks due to the COVID-19 outbreak, the agri-food chain is rising to the challenge, and there is no risk of food shortage provided that people behave appropriately, the head of the food retailers lobby told EURACTIV.
Christian Verschueren is director-general of the food retailers lobby EuroCommerce. He spoke to EURACTIV’s Natasha Foote about the effect that the crisis has had on the food supply chain.
What is the current situation in terms of panic buying?
We’ve seen a lot of panic buying, with sales of certain items – dried and canned goods, toilet paper – up sometimes 300%, 400%. But I’d like to stress that there is no shortage of food, provided that people behave appropriately.
The key thing to remember here though is that higher sales don’t necessarily translate to higher profits – the rapid shift has also caused high costs, in logistics, in extra safety measures, in hiring new temporary staff to deal with the overload of work and while dealing with those that are unable to work currently, in being unable to forecast volatile shopping patterns.
Although panic buying has somewhat calmed down, we can still see the fallout from coronavirus when we walk into the supermarkets and see the empty shelves.
How has this current crisis affected patterns of consumption?
There are new challenges to deal with; the food retail industry closely plans for key moments in the calendar, like Easter, school holidays, etc, but products planned for and traditionally associated with these holidays are simply not selling. With an uncertain future and a potential economic downturn, people are just not in the mood to spend money on non-essential items, and this cancellation is costly for food retailers.
It has put enormous strain on the industry but at the same time, it has shown the magic of the retail industry in normal times – how well the chain is organised, how targeted analytics are. We’ve also seen how quick the industry is to respond – already we can see that measures they have quickly adopted to regulate the flow of customers into shops, to manage the higher capacity coming from distribution centres and factories.
And given that consumers are increasingly turning to the internet to order their supplies online, what challenges does this pose for food retailers?
It’s true that online delivery systems have been overwhelmed recently, and that the digital transformation is accelerating in retail and will continue to accelerate.
We’ve seen that those who never, or rarely, use the internet to order goods are suddenly using technology. We’ve seen an e-commerce boom; for example, online sales of groceries in Germany is up 55% compared to this time last year, although sales of non-essential goods online is much lower.
However, I tend to think this is circumstantial rather than their preference. We see that customers would still prefer to go to the shop to get their groceries, to fulfill their immediate needs for staples rather than relying on deliveries. So I see online sales as more of a complement to stores, but we still need physical food retailers to be operational.
With food destined for the Horeca sector being redirected elsewhere, how can we avoid an increase in food waste throughout the supply chain?
With unpredictable patterns and flows of food, an increase in waste of perishable items is unavoidable.
That being said, a lot of this produce is being converted into other products, such as soups and juices. We also see the food donation to food banks is up, with retailers picking up food from the HORECA sector and transporting food to some of the most vulnerable people.
However, there are issues in that often wholesalers are not authorised to sell their produce to the general public, so food cannot be redirected from the HORECA sector to retailers. We’ve seen some countries – Portugal, France, for example – asking for authorisation for this to happen.
Another issue is packaging. The bulk packaging that wholesalers use is simply not fit for consumer sales.
But anything with a long shelf is being put in storage for until after the crisis, and the rest is being re-directed as much as possible to minimise any waste.
In light of the recent coronavirus outbreak, stakeholders are divided as to what the best course of action is in regards to the Farm to Fork (F2F) strategy. In your opinion, does this crisis mean we should postpone, or even reconsider, the planned F2F strategy?
In general, food retail sectors are calling for postponement in general of all things that can wait. As an essential social service, the food sector is working hard with all hands on deck to keep the food supply chain functional and running smoothly.
This includes everyone in the chain, from farmers harvesting food, workers in factories, and retailers selling the goods – it’s imperative that the whole chain continues to function.
But volatile circumstances and consumer shopping patterns are making it extremely challenging for the industry to respond to, resulting in many unplanned costs.
If the food sector doesn’t have time to respond to consultations on strategies, if we can’t follow a proper democratic process with full engagement of all stakeholders, then it should be postponed until a later date.
How has a lack of seasonal workers affected the industry?
Currently, on the agricultural side of things, we are seeing the impact of a shortage of seasonal workers. This shows that we can no longer rely on a migrant workforce, something that the UK will especially learn in the aftermath of Brexit.
For this, I praise the European Commission for its quick action on seasonal workers, who are essential workers for an essential industry.
But obviously safety comes first, the safety of the employees in both retail and in farming is of paramount importance, and we need to apply the necessary measures and make sure we find ways to fulfill these essential functions in a way that avoids going against measures, such as providing access to protective equipment and finding new ways to work which ensures workers can maintain social distancing.