The Pandemic Shook the Food and Beverage Industry. Here’s How It’s Recovering.
Food and beverage (F&B) was one of the industries most severely affected by the pandemic. Global restaurant sales were set back by six years, online grocery sales rose by 54%, and supply chains suffered permanent disruptions.
Social distancing norms and extended lockdowns brought customer confidence to an all-time low, and F&B companies had to postpone growth initiatives. It was made clear that bolstering supplier relationships and acquiring market share through global expansion was essential for sustainable growth.
In this period of recovery, transnational F&B companies have numerous opportunities, not only for revival, but also for unprecedented growth. Going global armed with curated localization strategies as well as adjusting sourcing and pricing strategies to reflect the post-pandemic reality is the need of the hour.
Covid-19: The Great Recession of 2020
The Covid-19 pandemic created an economic slump of a magnitude similar to that during The Great Recession of 2007-2009, at least for the F&B industry. The top players of the industry also handled it in much the same way.
Although inflated raw material prices, volatile national currencies and an all-time-low purchasing power led to decreased consumer demand for food products, the F&B industry still fared much better than other sectors.
According to a National Library of Medicine journal, transnational companies emerged stronger than ever before from the 2007-2009 recession by expanding to emerging markets, partnering with governments for pandemic recovery efforts and consolidating market share globally using ultra-processed products. Even mid-sized companies like the vertically integrated orchards products manufacturer, Shoreline Fruit, shored up its expansion efforts by solidifying its supplier base.
If you’re an F&B company exploring ways to steady your ship, expanding into newer international markets can provide the necessary global mobility to tackle current and future supply chain crises, irrespective of whether your revenue is $50 million or $500 million a year.
Global penetration: an F&B necessity
The road to recovery for F&B companies has now led many to once again consider global expansion. Be it exploring newer markets to gain market share, hunting for diversified suppliers and distributors or avoiding restrictive national policies, globalization becomes inevitable for long-lasting growth.
A great example of this is the renewed interest in trade fairs. These massive events are the bread-and-butter of F&B companies in terms of discovering new distributors, but they naturally dried up at the start of the pandemic. Companies had to shelve their expansion plans until these fairs resumed.
Now that the world is starting to re-open, fairs like the Salón Gourmet Fair in Madrid and the China International Import Expo are once again inviting companies to explore their options. Many of these fairs allow entry only to local employees, necessitating a ground presence for your brand.
Secondly, regionally-diversified suppliers are also a key factor in minimizing supply chain disruptions. If your supplier portfolio is concentrated in, say, your home country, then a sudden crisis could leave your distributors in foreign markets with nothing to sell.
Courtesy of Entrepreneur – read full article here.