US & Global Economic Impact Analysis and Forecasts

Freedonia analysts and economists are sharing their insights on how major events are impacting different parts of the US and global economies.

Food Industry: Waste & the Supply Chain – Surplus & Shortage at the Same Time

Food waste – considered a leading environmental problem even before the coronavirus pandemic – has become an even bigger problem in recent days. Raw milk is being dumped and produce is rotting in the fields, all while many grocery stores have limited supplies and have instituted limitations on how many containers of milk consumers may buy per trip.

What’s the problem? A large part of the food supply chain is oriented around the foodservice industry – restaurants, school cafeterias, and other locations that are suddenly seeing sharply limited need in light of school closures and stay-at-home policies that have temporarily barred on-site restaurant dining.

Important government support measures would include:

  • government purchases to redirect supply to food pantries and school meal distribution programs
  • loans to enable food processors to redirect their operations to retail products
  • support for farmers who have to dump excess product because limiting output during the pandemic is not possible without leaving the food supply vulnerable to insufficient production when eating trends normalize

One private sector response, which provides more work for underemployed foodservice staffers, is selling groceries through foodservice outlets. Firms such as Panera Bread and Subway have started to offer take-home groceries in addition to prepared food.

Suppliers, processors, and retailers will all need to remain flexible, including shifting packaging purchases from bulk and large-scale containers to smaller containers needed for individual and family purchases at the retail level. This will require packaging companies to shift their own production  operations  to make enough smaller packaging options available.

Another kink in the shift from foodservice operations to more retail sales is that retailers are struggling to keep up with demand at their warehouses and in stores. In an attempt to work through a solution of labor needs, Sysco (a leading supplier to the foodservice industry) made a deal with Kroger (a major retail grocer) to allow its furloughed workers to temporarily work at Kroger distribution centers.  

For more information, see our sister publisher Packaged Facts’ coverage of the Food industry, including The Organic and Clean Label Food Shopper, Affluent Food Shoppers, Global Food E-Commerce. Relevant information from The Freedonia Group includes our influential coverage of the Packaging industry, which encompasses reports on Global Bulk Packaging and US Rigid Bulk Packaging, as well as the Meat, Poultry & Seafood Packaging report, which includes a new addendum with COVID-19 market impact analysis and an estimated market size for year 2020. Capital goods analysis is found in Global Food Processing Machinery, which also includes COVID-19 market impact analysis. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Covid-19      Food & Beverage