Jan 10 2022

The COVID-19 Pandemic: An Opportunity for the Food and Beverage Supply Chain to Improve

Written by Orderly Marketing

The COVID-19 pandemic changed industries completely. It was just as if a bomb had been dropped on the food and beverage industry, causing many things in this space to change.

Reports from the BBC have confirmed that there are fewer bars and restaurants in the UK. The report indicates that casual dining options, in particular, have dropped substantially by nearly 20 per cent over the past few years. This has led to more than a 10 per cent overall decrease since 2008. According to these findings, it is clear that many businesses throughout the UK have shut their doors for good once they were no longer profitable.

America wastes about 40% of its food supply and people in the United States waste more at home than restaurants do. Due to the pandemic, American eating habits have shifted towards more dining-in at home compared to eating out, growing the problem of food waste by 10%.

The pandemic has been pivotal – and food and beverage supply chains should come out stronger than ever before. The world of food and beverage production is more prolific than ever and it would be great if everyone could take every chance they get to improve sustainability practices with innovative solutions and new technology building a better food and beverage supply chain.

Making the Supply Chain More Sustainable

In a 2018 Food Forum sponsored by Credit Suisse, many researchers and analysts made brilliant remarks about the world’s present food system. One said it all: “The findings are startling, but only represent reality. This is likely worse in terms of greenhouse gases and water use than any previous system, but it is also much better at meeting our needs.”. The world’s present food system is so unsustainable that every food consumed (or not) can already be considered as fossil food. 

What does this mean? Every morsel and every bite are equivalent to the utilization of a fossil resource. After all, the present supply chain (from manufacturing to delivery), heavily uses limited resources like oil, water, and land. 

That’s not all. The industry also experiences a glaring problem pertaining to both food waste and loss. While the former has been consistently discussed over the years, food loss is just as challenging as it can occur in many aspects of the supply chain, including packing houses. 

The COVID-19 pandemic could change vital points of the supply chain and make it more energy-efficient and self-sufficient in the following ways: 

It can lower the percentage of food waste 

The pandemic gave birth to ingenious and practical methods of minimizing food waste not only in households but also in grocery stores and restaurants. It also made users become aware of existing food sustainability solutions. 

These include apps like “Too Good to Go”, which connects food producers like restaurants to consumers. In this app, customers can have access to restaurants selling leftover food at discounted prices, which they can pick up near closing time. Applications like these avoid food spoilage, minimize production losses, and, most of all, keep the businesses alive. 

Meanwhile, the Bulgarian platform called CozZo helps household owners keep track of their pantry and refrigerator inventory, and generate a shopping list only based on what’s missing. Moreover, it is complemented by a recipe search engine, so cooks can make meals using the remaining ingredients. 

The pandemic also stressed the importance of a more reliable and accurate suite that includes forecast management, automated inventory, and order management. Using this program, supply-chain players can:

  • Forecast their demand based on the outcomes or data obtained from the previous weeks or months 
  • Match their inventory with the possible demand to prevent overstocking or production of food and beverages, thereby promoting the more efficient use of resources 
  • Provide a more seamless ordering experience as suppliers and manufacturers

It strengthens the direct-to-consumer (D2C) model 

A traditional supply chain is long, complex, and expensive. Manufacturers produce the goods and then deliver (or work with third-party logistics) them to warehouses. These places may be for wholesalers, who then maintain a comprehensive network of retailers. The retailers, like convenience and grocery stores, sell the items to consumers. 

As soon as the food or beverage leaves the manufacturing facility, though, they begin to get nearer their expiration or best-by date. To maintain their quality, storage spaces need to maintain the right temperature and humidity, which means they can be heavy energy users. 

For the supply chain to achieve sustainability, it needs to remove as many players as possible —that is, embracing the D2C model. 

Under this method, food producers sell their goods directly to consumers, bypassing intermediaries. Probably one of the brilliant examples of the D2C model is Pepsi. 

With its initiative called Unwasted, the company can now sell obsolete products at discounted prices and have these boxes delivered straight to consumers’ homes for free.

D2C also encourages the concept of pick-and-pack service, wherein retailers group items according to the customer’s order. This way, they can minimize wastage while enhancing their branding and consumer experience as every package feels more personalized.

The pandemic could force the supply chain to use big data in a more efficient way

Unlike other industries, those in the food and beverage seem to be late in adopting and harnessing big data for many reasons.

  • First, why fix something that isn’t broken, so to speak? The methods that have been around for a long time still work. 
  • Second, big data can be costly and overwhelming to process and understand. But this voluminous amount of information can also be a treasure trove of ideas. It can make businesses more sustainable, productive, and efficient. 

The data generated by e-commerce sales, for instance, can help food and beverage supply chains determine the most salable items or the growing trends in the market. This prevents them from wasting resources on goods that may no longer appeal or work, maximize distribution and delivery, and create more strategic approaches to using the available resources. 

The COVID-19 pandemic is threatening virtually every industry, including something as necessary as food and beverage. But every challenge is also an opportunity for lessons and growth that will make supply-chain processes more sustainable, dependable, cost-effective, and healthier for both society and the planet.