Tackling Food Sector challenges post COVID-19

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By Vikas Kumar, Director of Research and Professor of Operations and Supply Chain Management

The ongoing COVID-19 pandemic crisis is having a major impact on the global food supply chains affecting segments such as farm production, food processing, transport and logistics, retailers and final demand. The sudden increase in demand for essential products triggered by panic buying/hoarding and the slow reaction of retailers to replenish them has exposed the limitations of cost-efficient and streamlined supply chains when it comes to being agile and adapting to unforeseen shocks. Therefore, it is important to draw attention to the challenges that COVID-19 related supply chains disruptions bring to the businesses.

For instance, the ongoing pandemic has meant labour demand in food production, food supply, grocery retail, transport and delivery services is massively outstripping current supply. In the UK, this has been further complicated by the shortage of seasonal agricultural workers, who hail from European regions. Some other potential challenges the food sector is currently facing are supermarket supply chain struggles, food delivery issues, food price hikes, risks to jobs and livelihoods, food waste and challenges imposed by shifting consumer behaviour. As the food sector has been severely impacted globally, it is essential that it develops a mitigating strategy to deal with these challenges.

This could include applying a holistic approach to managing supply chains. Food organisations need to develop higher resilience, which is needed if they are to build sufficient flexibility in their supply chains to protect against future disruptions.

In building this resilience, they also need to realise the potential benefits of digital technologies. IoT sensors for soil and plant monitoring, warehouse automation, blockchains for traceability, drones for delivery, data analytics for demand and supply management, are all examples of industry 4.0 technologies across the food supply chains that could bring numerous benefits to organisations. A combination of digital technology assets – data collection, data storage and management, analytics, and decision modelling – could help unlock farming’s potential as well as strengthen the resilience of supply chains.

Another step in the right direction might be a transition towards more sustainable practices such as the adoption of circularity in food systems, which advocates reducing the amount of waste generated in the food system, reuse of food, utilisation of by-products and food waste, and nutrient recycling.

The pandemic has also exposed the dangers of relying on a single supplier or single geolocation – the equivalent of putting all eggs in one basket – thus diversification of the supplier base is encouraged. Talking of eggs, the last few months have also shown a growing reliance on farmers markets and farm shops (called short food supply chains or SFSCs) for essential food, and their popularity will continue to grow as consumers are getting health conscious and more concerned about food safety and transparency.

The ongoing pandemic has created several challenges for the food system and many lessons still need to be learned. How these lessons are reflected in UK food policy will determine how effectively we deal with similar situations in the future.

The content of this blog is based on the following recently accepted paper, due to be published early 2021: Kumar, V. (2021, in press), Adjusting to the new normal: Challenges of the food sector in the wake of COVID-19. Journal of Supply Chain Management, Logistics and Procurement

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