The coronavirus pandemic has changed the daily lives of people around the world. Its impact on reality has touched practically every area of our life: social relations, work, health, traveling. Restrictions on social contacts and lockdown have had a negative impact on a large part of the economy, although there are of course industries that have benefited from it.
Today we take a look at how the pandemic affected the food industry.
An ambiguous situation
There is no doubt that the coronavirus pandemic has and will have far-reaching consequences for the entire economy. It will also have an impact on agribusiness. Nevertheless, it is still difficult to clearly assess the future effects that it will have on the food industry. The course and power of impact on the food industry depend on many factors and processes, which on the one hand may be a problem for agribusiness, and on the other - are a certain opportunity for it, which can undoubtedly benefit.
But where does the unequivocal difficulty in defining the situation come from? This is because many processes in the food sector are not very violent. While the economic downtime could suddenly and clearly hit numerous sectors of the economy (such as the tourist and hotel industry), here we are dealing with a situation with a different specificity. For while, on the one hand, the economic crisis and inflation may have a negative impact on the sale of products, we are talking here about food products that are used to satisfy the most basic existential need - hunger. And this is what every person on Earth needs to live.
The most resilient sector
Despite some noticeable changes in the agri-food industry caused by the Covid-19 pandemic, the sector has proved to be one of the most resilient to changing conditions. This is due to the fact that, regardless of the epidemic or economic status, certain processes and trends in the segments of the agri-food industry remain unchanged.
The agri-food industry, and the entire industry associated with it, has one particular advantage among other areas on the market: it relies primarily on domestic raw materials provided by local farmers. Foreign trade restrictions meant that farmers and entrepreneurs began looking for new buyers among local recipients. And those who had limited purchasing power of foreign products, eagerly used this possibility.
Negative phenomena
Although the agri-food industry turned out to be one of the most resilient on the market, this does not mean that it is completely immune to the effects of economic phenomena. The biggest blow was certainly the restrictions on international trade, which could be felt especially by countries whose profits from agricultural production and the food industry are largely based on exports.
On the one hand, it was possible to transfer purchasing power from foreign importers to local markets, on the other hand, limitations in social life related to the operation of restaurants and other food establishments also largely influenced the purchasing power of food products. Both of these factors had a negative impact on the demand for food. And although this demand never dropped to zero, it nevertheless influenced price changes and the inability to make long-term expertise and predictions about the development of the situation.
Unused e-commerce opportunities
As noted by Renata Dutkiewicz, director of the food sector at Santander Bank Polska, there is still some reserve among food companies towards e-commerce. Interestingly, the pandemic's shift towards e-commerce in the agri-food sector was not particularly influenced by the pandemic, which may seem surprising given the sudden shift of many aspects of human activity to the online sphere. Meanwhile, e-commerce is still seen as a possible development path for the agri-food sector, which may have enormous development potential. The only question is whether the food industry will properly notice it and will be able to use it.