[Podcast] Food Supply Chains and COVID-19: Impacts and Emerging Trends

The ongoing impact of COVID-19 continues to challenge the U.S. food supply chain and is shaping consumer habits. We spoke with Audrey Cassata, a consultant specializing in the food industry, to learn more about how food and beverage companies are reacting, measures they're putting in place, and trends that may shape the future of this industry. A full transcript of this podcast is below.

Here are some key takeaways from our discussion:

• "Low touch" areas of the industry haven't been impacted as severely and have mostly been able to successfully implement new safety measures
• Businesses that sell directly to consumers (for example, stadiums, sporting events, restaurants) have been hit harder than businesses that sell to other businesses.
• Automation is playing a big part in the industry to reduce human error and improve efficiency and productivity.
• We are now seeing a high demand from our clients for capital talent and they need them quickly. Once these projects start up again, they need these people instantly.

 

Transcript

Elvin: 0:00

Hello everyone and thank you for listening in. Today we are joined by Audrey Cassata, engineering consultant in our Food & Beverage team. We’re going to be talking about the impact that COVID-19 has had on our nation’s supply chain, as well as trends we’re seeing. Before we dive in, Audrey, can you tell us a bit about yourself and your role at Progressive?

Audrey: 0:21

Yeah, of course. Elvin, thanks so much for having me. So a little bit about myself: I've been working for Progressive for about two years now. I sit on the food and beverage team as you mentioned, and I focus on placing and recruiting for capital project managers and construction managers. The way our team is set up, we've got other individuals that focus on other niche markets, such as quality, automation, engineering, you name it.

Elvin: 0:53

Awesome, you guys do it all. So let's dive right into it. Right now in the U.S., we’re seeing increases in COVID-19 cases and hospitalizations. This is coming at a time when many businesses were planning on either opening back up or increasing operations. How have the food companies you work with reacted to this trend of positive cases?

Audrey: 1:20

Given the high touch nature of some areas of the food industry, for example meat and poultry, these companies have been heavily hit. We're seeing a lot of meat packing companies close down operations, and it seems as a whole they haven't quite figured out how they incorporate social distancing in their manufacturing facilities. I do see that they are doing everything they can to figure out the best way to move forward, so I look forward to seeing how this industry finally adapts.  

In terms of Consumer Packaged Goods, that is a bit different due to their lower touch nature, less human interaction in the process, many of those have dealt with the initial blow, but they've have created sanitation measures that work and are not being impacted by the new spike in cases. So it's seeming pretty business as usual for them.

Elvin: 2:26

You brought up a lot of interesting points and this leads into my next question. Because people have had to stay home, we’re seeing fewer people eating out at restaurants. I’m interested to hear from you how COVID-19 has impacted consumer food habits.

Audrey: 2:46

When this first hit, the initial prediction was that food consumption would spike dramatically, but what we ended up seeing is that many of our clients sell straight to business, which has saved them.  

Businesses that sell straight to consumer took a hit on the business side - stadiums, sporting events, restaurants just to name a few.

The grocery business on the other hand is doing great. Even delivery companies have also been experiencing high spikes in business during this time, which has given them an opportunity to make a name for themselves since consumers are heavily relying on food delivery, grocery delivery, and even just general consumer goods delivery, so companies like Amazon. We're definitely seeing changes in our world and these are the companies that are doing a great job at adapting.

Elvin: 4:04

Once we flatten the curve and more and more states begin easing up on restrictions, what do you think will emerge as the top purchase drivers for consumers?

Audrey: 4:20

Before the downturn, two of the biggest purchase drivers were price and quality. Now that the U.S. is experiencing record unemployment, more consumers are struggling financially, price now becomes a huge issue, even bigger than before.  

We are seeing local, mid-tier manufacturers experiencing significant gains from this as they are cheaper and reliable.

To speak to the quality piece, sustainability been a huge emerging trend in the U.S. as consumers have been demanding a more transparent supply chain from these food and beverage companies. Consumers want to see where exactly their food is coming from. Due to this, companies have jumped on the sustainability train by marketing their sustainability plans and goals to keep relevant in this space. The companies that don’t jump on this train will unfortunately fall behind since it is so relevant during these times.

Elvin: 5:28

You brought up the supply chain. I’m interested to know what changes, if any, will we see in how suppliers are managed? Have any processes been developed to prepare for future supply shocks?

Audrey: 5:45

Automation is the future. Due to COVID-19, companies have been forced into relying heavily on technology to get through this time as smoothly as possible. With these companies installing labor-saving technology such as new high-speed packaging lines, autonomous mobile robots, and more, we're seeing automation play a big part in the industry, ultimately to reduce human error and improve efficiency and productivity. So with the supply chain comes automation and technology, and companies who are jumping on this trend are ahead of the pack.

Elvin: 6:30

Speaking of automation, how has all of this impacted capital projects?

Audrey: 6:38

Even though the initial economic projections were predicted to be a V-shaped recovery, we are now seeing that doesn't seem to be the case. It's looking more like it will be a U-shape recovery. Which means, after companies have figured out social distancing measures and protocols, capex and capital projects have picked right back up for some companies.

We are now seeing a high demand from our clients for capital talent and they need them quickly. Once these projects start up again, they need these people instantly.

Some clients are used to relying heavily on the same group of design firms to get these people but right now are struggling to find the right talent quickly. This is where we have been able to add value to our clients during this time as we are always proactively finding food industry experienced engineers, project managers, construction managers who are ready for work. So that's been pretty interesting to see.

Elvin: 7:43

I’ve actually learned so much from you today. Before I let you go, is there anything else you’d like to share? Any final words?

Audrey: 7:55

Thanks for having me. I am just thankful to work in such a resilient industry. I really look forward to watching how these companies continue to adapt to the changing world around us.