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The COVID-19 pandemic has disrupted global food supply chains and threatened food security for millions of people. The full impact of pandemic on supply chains is still unknown and won’t be known until COVID-19 is controlled.

We are facing a period of uncertainty and after the pandemic it will take time for consumer confidence to build. There is a strong possibility that consumption patterns and buying habits may change permanently and the food industry must rethink how it does business. As we return to our new normal, the industry will need to adapt and change.  

The way forward

In the face of this challenge food companies need to:

  • Respond: In the first instance the industry needs to respond to immediate disruption. Labour availability, labour absences, outages due to infection, access to packaging and raw materials, safe processing and reaching consumers all need a quick response to safeguard business continuity and to meet the wider responsibility of ensuring food security for our societies.
  • Be prepared: Companies need to be prepared to address further disruption. Workforce education, controls and checks and contingency planning can ensure continuity in times of crisis.
  • Future proof: Food consumption trends will be significantly changed while the COVID-19 crisis continues and it will take time for confidence to be restored. Companies need to adapt to this change and find new ways to reach the consumer, in particular if there are other events of the scale of COVID-19. 

Upcoming major trends in food supply

The immediate aftermath of the pandemic has seen the collapse of food service, a surge in retail and huge disruption to the food supply chain. The major trends in the immediate future are likely to be:

  • Food service: Food service will continue to be challenged. Even when restrictions are lifted, consumer confidence will be slow to rebuild.
  • Retail: Retail will continue to surge as consumers move their food experience into the home. Large, well resourced FMCGs will look to exploit this trend.
  • E-commerce: More wholesalers will go direct to consumer and invest in new delivery methods. Contactless payments will be important to facilitate this.
  • Labour: Labour movements between countries will continue to be challenged affecting seasonal food production. Also, absences due to infection will cause disruption.
  • Food safety and hygiene: Globally, food companies will adopt safety and hygiene protocols across the supply chain to give the consumer confidence over infection prevention. The quality gap may close between the top tier food producers and those down the value chain.
  • Life sciences and food: Consumers will look to foods with immune enhancing potential and functional foods will see increased demand.
  • Supports: As sectors that support food service struggle, state supports and intervention will be required to maintain liquidity while prices are depressed.
  • Repurposing: Companies that supply Food Service will either re-purpose their product for other channels, or cease processing.
  • Continuity planning: Companies will invest in their supply chains so that they can withstand shocks from further COVID-19 impacts.  

Get in touch

Recent events are a catalyst for companies to revisit supply chain strategy and accelerate investment in security and capability to secure the short and long-term future.

Our KPMG Food Assurance team is a dedicated cross-functional team of experts which helps food organisations with supply chain governance. The team brings together a wide range of disciplines including technologists, sustainability practitioners, legal professionals, customs and taxation specialists and assurance professionals to help food organisations to enhance supply chain governance.

In a time where there is so much flux, we want to help you for what's next. Contact David Meagher, KPMG Head of  Food and Agribusiness to speak about how we can support you through these uncertain times. 

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