To say that the COVID-19 pandemic was a huge blow to the foodservice industry would be an understatement when we look at the number of businesses that shut down because of this global health crisis. Even players that have been in the industry for decades were not safe from the impact of the pandemic that placed almost the entire world at a complete standstill.
One of the areas where the pandemic badly hit the food industry was stock availability. When lockdowns were implemented, the movement of goods was also affected as restrictions and limited access were imposed. Different areas, different territories, different rules.
Because the global crisis came as a shock, it took a while for the foodservice industry to adjust and adapt to the new normal. Sandhurst’s Corporate Chef and Key Account Manager Fiorella Boretti recently did research for the Foodservice Suppliers Association of Australia (FSAA) and she has been awarded a Business Management Scholarship for her work. Her research tackled how the onset of the pandemic and its effect on the flow and management of stock have gravely affected the various levels of the food supply chain.
One of the biggest hurdles that producers faced was product delivery, amid restrictions that affected even the movement of goods during the pandemic. However, the bigger challenge for the producers was the significant drop in orders, including cancellations from regular clients.
“While dry and tinned goods producers were not able to keep up with demand, fresh food producers were concerned about reduced or cancelled orders causing their stock to go to waste and affecting their income,” says Chef Fiorella.
Manufacturers / food suppliers
The news of the pandemic drove food suppliers to panic buying to secure stock, especially on goods with long shelf life. What they did not anticipate were the subsequent strict lockdowns that forced people to stay at home.
“Suddenly, the orders stopped coming in, stock on the floor was not moving, and we had many containers arriving at the port. Orders from overseas require a minimum of 8 to 12 weeks lead time so that translated to overstock and invoices to pay,” Chef Fiorella shares.
On the other hand, supplies from overseas were delayed due to measures implemented in light of the COVID-19 situation. Among the factors that caused shipment delays was congestion at the Sydney port where unloading delays go as long as three weeks, port strikes, and longer waiting periods for the Australian Quarantine and Inspection Service (AQIS) inspections.
Some ships were also diverted to other cities, causing additional costs for the food suppliers since they have to cover any expenses incurred due to the additional transport required to get the product to the warehouse. “For example, a container from Europe used to cost $600, but now it’s $2,700, adding a significant cost per carton. The price of tin plates and glasses have also increased due to high demand for goods with long shelf-life,” Chef Fiorella explains.
The availability of worldwide containers and vessels not leaving their port of origin on time, waiting to fill them up so every trip would be worth the cost, also contributed to shipment delays. “We had to adjust the way we supply to our customers due to all these factors that we were not able to control. For instance, we had to cut supply quantities and put products on allocation to ensure we have stock for everyone,” Chef Fiorella adds.
Distributors holding a volume of products, including fresh goods with short shelf-life, were also affected as their customers limited their operations, shortened their operating hours, or entirely closed their doors — whether temporarily or for good. To avoid, or at least minimize, their losses, distributors had to be creative to move the products and avoid waste.
“Supermarket shelves were empty so a lot of distributors took advantage of this opportunity and opened their doors to the public, directly dealing with retail customers and even offering home deliveries. They also reached out to fruit shops and grocers to manage their inventory, selling their products, especially those with shorter shelf life,” shares Chef Fiorella.
Knowing that their customers are struggling to stay afloat amid a very challenging time, it became a challenge for distributors to collect payments. This dilemma made it more difficult for these distributors to pay their suppliers so they can still receive the stock they need to supply to their clients that remained open.
With the challenges of moving the supply of raw materials amid the COVID-19 situation, food providers, including QSRs, had to make do with what they have on stock or use them all up if the business decision was to close down.
Due to a shortage of supplies, some restaurants and food outlets had to adjust their menu to only include what was available to continue their operations despite the situation.
“Establishments that were closing down distributed their goods among the staff to take home while others came up with ‘special of the day’ for takeaway or prepared family-style meals,” Chef Fiorella says.
The stock availability that was greatly affected by the pandemic, needless to say, created a ripple effect in the food supply chain, down to the end consumers. With food establishments either closing down or operating on limited capacity with reduced menu, consumers have limited options, especially those living in the suburbs.
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.