Pandemic creating waves and surprises in food sector

Lockdown has roiled the food industry and normal is a long ways off, says food trends guru

There’s been a lot happening on the food front during the pandemic — some of it surprising.

While the closure of restaurants has been blamed for a drop in milk sales, it’s actually one segment — coffee shops — that had the greatest impact, said food trend expert David Hughes.

“About half the milk we drink goes into coffee,” he said. “Canadians are great coffee consumers.”

And that’s despite a lot more cookies being dipped in milk as brands such as Oreos have seen a surge in sales.

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“When people are stressed and concerned about food safety and their own health, they tend to go back to what they know,” said Hughes. “Big brands that were going out of fashion a year ago are now back.”

And although grocery store sales have risen during the lockdown, food prices are generally lower — save for rice as it is only exported from four countries.

“All it takes is one of them, and a big player like Vietnam, to ban rice exports, and then the world’s rice consumers panic,” he said. “And that’s what we’re seeing right now.”

But most supply chains have proven surprisingly robust.

“The food industry has performed pretty well, except for the North American meat industry, which seems to be clobbered, especially at the meat-processing end,” he said.

Restaurant closures have also hammered sales of french fries, but consumers boosted sales of other comfort foods, such as snacks, ice cream, and frozen pizza.

“From a commercial point of view, big food companies like Nestlé and Kraft all benefited from COVID-19,” said Hughes.

While he predicts a slow and bumpy return to normal in the food sector, Hughes said the pandemic has been a game changer for online shopping globally.

“Canada did too, but very slowly,” he said. “Canada is a real slowpoke when it comes to online groceries. Amazon has had a brilliant period in the U.S. In the U.S., online groceries have grown by 40 per cent. In the U.K., they’ve doubled.”

Meanwhile, the food-service industry was decimated.

“The Canadian restaurant sector laid off a million people in March. It’s been terrible,” said Hughes.

As the world starts to reopen, experts are unsure if people will rush back to restaurants.

“I would suggest it will struggle a little. We’ll be reluctant to go out,” he said.

Many restaurants have turned into takeout operations. It’s been a stop-gap move for most, but what’s fascinating is how quickly they were able to adopt an entirely new business model, he said.

“That’s the real take-away from COVID-19, how quickly you can respond to a change in the environment and get the best of a very poor deal.”

That may be a skill many will need as Hughes is in the camp that says the world is already in a global recession and will remain in one for some time.

“People in general will have less income and that will have a disproportional impact on the food they buy and how they spend. This will have a huge impact globally.”

About the author

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Alexis Kienlen

Alexis Kienlen lives in Edmonton and has been writing for Alberta Farmer since 2008. Originally from Saskatoon, she has also published two collections of poetry and a biography about a Sikh civil rights activist. Her freelance work has appeared in numerous publications across Canada.

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