Almost three years into the pandemic, the food and beverage industry is starting to recover. COVID-19 caused many people to stop dining out. Instead, families chose to have food delivered to their homes, which caused a surge in takeout and delivery orders.
At the same time, restaurants found themselves serving hungry customers while enforcing health and safety protocols. Unable to cope with the demands of the new normal, many restaurants and cafes had to close shop. According to the National Restaurant Association, around 17% of food outlets in the United States ultimately closed their doors after not being able to adjust to the pandemic.
However, many food and beverage suppliers are still facing a supply chain crunch. The spiraling cost of fuel either means more expensive deliveries or fewer runs. In addition, a shortage of workers and truck drivers also means processing and shipping delays for regular items like produce, dairy, and meat.
With all of these bumps in the road and inflation at an all-time high, what does the future hold for the food and beverage industry?
Demand for Delivery Will Remain
Fortunately for the food and beverage industry, people still had to eat during the pandemic. However, eating at home only made families miss going to their favorite restaurants even more. Even as dining areas closed, food delivery systems made up for the lack of in-house customers. In fact, Statista reported that the global online food delivery industry revenue grew from $157.34 billion in 2019 to $296.80 by the end of 2021.
Even when assuming that the pandemic will eventually run out of steam, online food delivery systems will continue to stay strong. Many corporate employees are going to continue working from home. With work still consuming most of their time, they find it easier to place a food delivery instead of preparing meals themselves. And with the price of fuel currently at an all-time high, using delivery services might prove more practical.
Restaurants Open? People Will Still Cook at Home
With many families choosing to stay at home during the pandemic, once-dormant home kitchens were now buzzing with activity. With more meals eaten at home, many families opted to improve their facilities with the stimulus money they received. According to Yahoo! Finance, 43% of American homeowners remodeled their kitchens during the pandemic. This made it the third most popular home renovation project, with an average price tag of $25,544.
As the pandemic continues to persist and prices of goods continue to rise, many families are making good use of their new kitchens to prepare home-cooked meals. On top of that, ordering food ingredients online makes it easier than ever to cook fresh meals at home. The lockdowns also gave families the chance to reconnect and rediscover the enjoyment of eating at home. So even with establishments relaxing their dining restrictions, many families will still make fewer visits to restaurants.
eCommerce Boom Will Stick Around
As the pandemic raged on, entire families chose to stay home. Remote work became the norm for employees. Kids whipped out their laptops to attend remote classes. Dining out gave way to curbside pickup and delivery. For both daily shoppers and casual ones, the internet became their only choice for buying groceries, home equipment, or new clothes.
As a result, eCommerce services boomed. According to Shopify, the global eCommerce market was predicted to grow into a huge $5.55 trillion industry in 2022. Prior to the pandemic, only 17.8% of all global sales were from online purchases. Within two years, that share grew by 18% to register at 21%. Experts predict that eCommerce will make up 24.5% of all sales by 2025.
Innovative Ways in Dealing With Supply Chain Disruption
The shift to eCommerce in light of the pandemic’s shutdowns led to shocks in every supply chain. This is especially true for the food and beverage industry since it highly depends on human labor. Many smaller producers need workers to harvest, process, and package food items. However, shutdowns during outbreaks meant that food items often remained unattended and left to spoil at the plant.
In packaging plants, the lack of raw materials (also due to shutdowns and a lack of human workers) can lead to shortages. Beverage manufacturers need bottles, caps, shells, and paper labels. Even with highly automated systems, these companies still need a few dozen people to operate and monitor the machines.
The Driver Shortage Disrupted the Food and Beverage Industry
Finally, the shortage of trucks and drivers also affects food supply deliveries. In 2021, the American Trucking Association reported a backlog of 80,000 truck drivers. With these massive vehicles accounting for the transport of 72% of all American cargo, losing this service can cause a major disruption. Many professional drivers saw the pandemic as a sign to quit. With workers from other industries being ordered to stay home, truck drivers saw the opportunity to go home as well.
Dealing with the Disruptions
Given the supply chain disruptions, many companies in the food and beverage industry began devising strategies to mitigate the pandemic’s effects. To ensure that they have enough raw materials and ingredients to continue producing their products, companies began expanding their supplier lists. Instead of giving their business to a single supplier, companies now get their materials from a network of suppliers to help ensure they get their goods.
In addition, companies also began to revisit the way they handle data. Most suppliers now integrate data on weather, traffic, and even local COVID-19 updates with their inventory system. This allows them to anticipate any issues that may affect production and delivery times.
Meanwhile, F&B production plants began retooling their packaging in order to use common materials instead of highly custom ones. This allows the company to source alternative suppliers in case their main partner shuts down or experiences delays.
The Future is Innovation
Using modern tools like data analytics can help companies in the food and beverage industry gain a better, more accurate picture of their situation. In addition, this data can help management devise workarounds in case of supply chain disruptions. This way, companies can still get timely information about the materials they need to produce their products, especially during a pandemic.
Skynamo is an innovative sales and customer relationship management software that helps companies deal with the challenges of the current food and beverage industry landscape as well as the post-pandemic scenario. It gives sales teams and executives a clear picture of what’s happening in their field and in the manufacturing plant. This allows agents to provide clients with real-time information on where their orders are and when can they expect them.
Do you want to know more about how Skynamo can help your business stay on top of the game despite supply chain disruptions? Chat with us so we can learn more about your company and its unique requirements. Afterward, we’ll be very happy to provide a short demonstration of how we can help.
