Recognising the pain points created by the onset of the pandemic, the crucial step for the food industry moving forward is to adjust to the new normal and prepare for whatever the ‘normal’ would be once the COVID-19 crisis is over. But can the foodservice industry do business-as-usual planning for the future with so much uncertainty looming ahead?
This is among the challenges discussed by Sandhurst’s Corporate Chef and Key Account Manager Fiorella Boretti in her research that won her a business management scholarship from the Foodservice Suppliers Association of Australia (FSAA).
After discussing how the pandemic affected stock availability, Chef Fiorella talks about the challenges of forecasting — and its importance to staying afloat — for the various levels of the food supply.
Food growers continue to feel the impact of the pandemic, with a huge part of the industry still on hold causing unprecedented losses, especially for the fresh produce sector. They had to drop their prices just so they could sell their stock before it goes to waste.
“For example, the avocado consumption in foodservice reduced by 20%, so with this in mind, producers are asking themselves ‘do we keep producing to the same levels as pre-COVID or do we look for an alternative crop?’” Chef Fiorella shares.
Tinned goods, such as legumes, beans, and tomatoes, were in high demand during the pandemic for their long shelf-life. Producers are in a dilemma whether to produce these crops instead or not, unsure whether the demand for these products will remain high or again change in the foreseeable future.
Manufacturers, food suppliers/distributors
Chef Fiorella notes that manufacturers and distributors face a similar challenge in this area. While the industry has somehow adjusted its operations to the ‘new normal’, it faces the question of whether the stock level requirement during the pandemic would remain the same or pick up when things are better.
Are the quantities sold during panic mode going to stay steady throughout 2021? How many food service outlets are going to make it through? How long will it take for the industry to recover? “These are very valid and enigmatic questions that no one has the answer for,” Chef Fiorella adds.
As companies tighten their expenses and cash flow, with the absence of a clear picture of what the next months look like, they are also forced to review the slow-moving items. What lines of products should they keep and which of those sitting too long on the shelves should they let go?
“It was a good time to review which lines are worth keeping and which ones to delete. With the ‘new normal’ packaging and product requirements changing, manufacturers and distributors mull which new products will the industry benefit from,” Chef Fiorella explains.
As for end-users, such as quick-service restaurants and similar but smaller businesses, the most pressing question for them is whether they will make it through the prolonged pandemic or not. A lot of them have made all adjustments necessary, including scaling down their operations, just to keep their doors open. However, there is always that one question they can’t take their mind off — until when can they survive?
With the lockdowns keeping the sales low, with takeaways barely close to pre-pandemic order volume, food establishments face falling behind paying their distributors, letting go of staff, among other things.
“As they were falling behind on paying their distributors, would they still be able to get supplies to operate on take-away mode? Or keep the relationships after the crisis is over? Would their business recover? And how long would it take to recover?,” Chef Fiorella asks, highlighting the struggles of the foodservice industry players to plan for the future with too much uncertainty at play.
On the other end of the spectrum, end consumers play a vital role in how the entire food supply chain will ride this storm out. With most of them stuck in their homes and becoming more conscious with their spending, end consumers have chosen to divert their foodservice expenses to buying groceries and preparing their food themselves. Fortunately for the industry, some are still getting their full salary — working and eating at home — who still depend on food service.
“While the delivery industry benefits from this, the foodservice industry has to cope with paying high percentages to the delivery companies while making less profit as people were spending less than they usually would. If eating at a restaurant, they would have possibly ordered a starter, a main, a dessert and a drink — but that is not the case when they order takeaways,” Chef Fiorella explains.
Since they are at home, with more time to prepare their food, end consumers can now allot what they would usually spend on foodservice to something else — which is most of the time, not food. “Suddenly, companies such as Amazon and eBay became a foodservice competitor in terms of ‘where do I send my money now that I am stuck at home?’” Chef Fiorella explains.
With the uncertainty brought about by the pandemic, it is easier to say that planning for the future is easier said than done for the different levels of the food supply chain.
Benching the most valuable player: the pandemic’s blow to foodservice workers
Seeing businesses shut down is one of the most heartbreaking effects of the pandemic. But for those that managed to survive, staying afloat remains a struggle with no clear sight of when the crisis will be over. Stock availability and limitations in forecasting continue to hurt their limited operations as they continue to grapple with the challenges of the pandemic.
Aside from stock availability and forecasting, Sandhurst’s Corporate Chef and Key Account Manager Fiorella Boretti, in her research for the Foodservice Suppliers Association of Australia (FSAA), also zeroes in on another area where the food industry got badly hurt during the pandemic: its employees.
In her research, which won her a business management scholarship from the FSAA, Chef Fiorella talks about how the industry’s most valuable asset — its human resources — became the collateral damage in the sector’s struggle to keep the business running amid this challenging time.
How exactly were employees, and subsequently the business operations, affected by the pandemic? Chef Fiorella breaks down the discussion into the different levels of the food chain.
The implementation of health protocols, while enforced for everyone’s safety, affected the way production lines operated. Since social distancing has to be observed in all workspaces and production sites, food growers could only utilise half of their manpower, which also meant only half the standard production levels. They even have to face manpower shortage in instances when their employees test positive for COVID-19.
“The worst-case scenario is when an employee who has contracted the virus but shows no symptoms goes to work. This affects the full production, which could fully stop due to employees’ exposure to a confirmed case,” Chef Fiorella explains.
This scenario is one of the things that directly impact stock availability, as Chef Fiorella explained in the earlier part of this series.
Manufacturers, food suppliers/distributors
Staff retention was a huge concern for companies in the business of food distribution or manufacturing. While the demand significantly decreased due to businesses closing down, a lot of food service providers continued operating, albeit on a much smaller scale. With the fluctuating demand for food supply, it became tricky for the manufacturers and distributors to decide whether to keep their staff or not. Should they decide to pick the former, how many of their employees should they keep and which ones? “The core of the foodservice industry is customer service, so how can you provide excellent customer service if you don’t have enough staff for answering the phones, for taking orders, or for making the deliveries?” Chef Fiorella explains.
“For example, Sandhurst was able to keep everyone employed. As the foodservice sales team was the most affected due to the lockdown and restrictions, Sandhurst diverted foodservice resources to the retail division, assigned us to help in other departments or reduced some hours,” Chef Fiorella shares.
With a lot of food service establishments closing down or scaling down their operations due to the pandemic, the employees were the first to take the hit, operations-wise. Some employees had to be let go, while some are given reduced work hours.
Meanwhile, food service establishments also face the challenge of finding staff for re-opening, when they finally get back on their feet and resume operations. Most of the employees who lost their jobs had to immediately find new ones, even in other industries, to generate income amidst these very challenging times.
“Most of those individuals are not coming back as they have already found better working hours, better working conditions, and better pay. On the other hand, students and temporary visa holders that were laid off had to return home for not being able to find work or pay their rents during the lockdowns, and they still haven’t been able to come back,” Chef Fiorella explains.
For Chef Fiorella, this part clearly illustrates the vicious cycle that affects the entire chain. If you are one of the staff that a company had to let go of, your income is greatly affected.
“Your fixed expenses become a priority and you stop spending money on ‘luxuries’ such as your morning coffee and croissant, your midweek takeaway pizza or chicken, or your weekend breakfast. It may seem an isolated experience but this affects the industry as a whole,” she explains.
Aside from the financial impact, Chef Fiorella also highlights that events like this also affect the mental health, especially of those who lost their job: “Mental health is an important issue right now, especially when we talk about coping with the loss of job, working from home, and the uncertainty of the future.
About Chef Fiorella Boretti
Corporate Chef and Key Account Manager, Fiorella Boretti, has been at Sandhurst Fine Foods for almost three years now. With 15 years of experience under her belt, Chef Fiorella is an accomplished professional in the hospitality industry. She has worked as a chef in New Orleans, Paris, London, Dubai, and Sydney, and she also has extensive experience in sales for the food service industry. Recently, the Foodservice Suppliers Association of Australia (FSAA) awarded her with a Business Management Scholarship that entitles her to a week-long, live-in senior management course at Melbourne Business School.