Challenges and Opportunities for the Global Food Industry during the COVID-19 Crisis

1. A Glance at Current Global Food Import and Export Trends

1.1 China largely increases meat importation.

Affected by African Swine Fever and COVID-19, China’s pork production has decreased despite consumer demand increasing. As announced by China GAC, as of Mar 24th, China has approved 997 new meat enterprise registrations in 2020. In January and February 2020, China imported 1,250,000 tons of meat (including entrails) with an increase of 69.9% compared with the same period last year.^[1]

1.2 Export restrictions threatening food security

Demand for food (especially grain) has increased, which has caused many countries to impose food export restrictions to ensure domestic supply. Thailand has restricted egg exportation. Vietnam suspended new rice exportation contracts. Kazakhstan has stopped the exportation of some agricultural products, such as buckwheat, sugar, potatoes, sunflower oil, etc. Eurasian Economic Union (EEU) temporarily forbids fourteen kinds of food exportation to non-EEU countries until Jun 30th.

1.3 Catering industry stagnation reduces fresh aquatic product exports.

The catering industry has suffered due to shutdown policies. Brazil has stopped exporting seafood to the USA due to a sharp decline in demand. In Japan, the sales volume and price of high-end seafood has dropped due to decreased tourism. Vietnam’s seafood exporters have seen a drop in demand of more than 50%.

2. Challenges

2.1 Higher public awareness of food safety and hygiene. 

Though there is no evidence showing the virus can be transmitted by food or food packaging, despite this, the public is concerned about food safety (especially animal-derived food). Cleaning and sanitation of food processing equipment and facilities are now vitally important.  

2.2 Panic buying and labor shortages are disrupting the supply chain.

Lockdowns in Europe and the USA have precipitated panic buying and hoarding. The demand for agricultural products and meat has grown rapidly. Labor shortages caused by travel restrictions and work closures have impacted many supply chains. On Mar 18th, the USA suspended its visa services in many countries, meaning seasonal laborers from Mexico were blocked from entering the US which is resulting in massive disruption to agricultural output in the US.^[2]

3. Opportunities

3.1 Boosting immunity claims are creating a new growth point.

Before any miracle drugs or vaccines are developed, most people must rely on effective prevention methods and their own immune system to protect themselves. As reported by En Segundos Panamá, the COVID-19 epidemic has seen a large increase in exports of Panamanian pineapple to Europe, where consumers think the fruit can boost human immunity and help fight the virus.^[3] According to Data 100, consumption of yogurt has increased, which is also considered an immune booster. Sales of functional foods, nutraceuticals, and nutrient supplements have also increased.

3.2 Plant-based meat.

As claimed by Professor Chen Huanchun from Huazhong Agricultural University, Academician of the Chinese Academy of Engineering, “78% of emerging human infectious diseases are related to wild animals, or derived from wild animals.”^[4] A crisis of confidence in meat and meat products is occurring caused by bird flu, African swine fever, and COVID-19. People are forced to change their consumption habits, turning their attention to plant-based meat. As Nielsen data shows, plant-based meat sales in the USA increased by about 200% in the first two weeks of March, compared with the same week last year.

Source: National Public Radio ^[5]

 3.3 Opportunity in non-contact food delivery.

During the COVID-19 outbreak, fresh food e-commerce has been booming in China. A surge in demand for food delivery service has occurred in Japan. Delivery of food can be done through non-contact delivery, which helps lower infection risk. In non-contact delivery orders, consumers assign a specific place (such as outside their house door) for the deliveryman to place their goods and fetch it after the delivery person is gone.