How food manufacturers and processors are responding to COVID-19 consumer needs

  • 2.5 min read

Many parts of the economy have ground to a halt during the COVID-19 pandemic, but not food manufacturing and processing.

Consumers are anticipating a lengthy return to normalcy and are unable to shop as regularly as before. So, they’re gravitating towards economical food items that have a long shelf life, such as canned goods. 

That’s what Simon Somogyi, a research fellow at the Arrell Research Institute at the University of Guelph, calls panic buying. It’s unnecessary - the Canadian food supply chain is “rather robust,” he says, and has had a few weeks to adjust to the pandemic. 

Changed shopping habits

It’s clear COVID-19 has changed shopping habits. In some cases, consumer demand is changing production lines.

But looking at store shelves, it’s clear COVID-19 has changed shopping habits. And in some cases, consumer demand is changing production lines, at least temporarily.

For example, across the country, some distillers have used their expertise in alcohol to produce hand sanitizer rather than beer, gin and vodka. 

Rapid changes in the market require agile refinancing and financing options. Debra Wadia, FCC’s Senior Director of Commercial and Corporate Financing for Ontario, and her team are watching the changing market. She says FCC supports the changes in several ways. 

One approach is with financing for new or growing market opportunities for suppliers. Previously selling to fresh markets like restaurants, some suppliers are seeking new opportunities since restaurants are closed as a result of bans on public gatherings.

“For consumers, it’s mostly about discretionary spending now,” Wadia says. “Demand may be falling for high-cost food and rising for canned products like soup. Processors and manufacturers are looking to suppliers who can fill it. That’s an opportunity for all concerned.”

Some markets have dried up, but Wadia says consumers are adding more fresh produce to their shopping lists when they patronize supermarkets or other retail food chains. 

In turn, those companies are looking to commercial greenhouses for greater quantities of commodities such as strawberries, cucumbers and peppers. 

New challenges for suppliers

This activity presents new challenges for some suppliers. For example, companies that rely on foreign workers for manual labour may need additional housing to accommodate isolation period requirements.

“Their housing costs may well go up,” Wadia says, noting increased credit lines could help.

Another approach is to partner with other lending institutions. Michael Hoffort, FCC President and CEO, says supporting the industry will take strong collaboration between banks, credit unions, FCC and other financial institutions.

“FCC has served as a strong and stable industry presence for over 60 years, and this current situation is no different,” Hoffort says. “We’ll be working in partnership with other financial providers to offer the solutions needed by the agriculture and food industry to take on the challenges ahead.”

Bottom line

COVID-19 is impacting consumer buying habits and having an impact on the food supply markets. New opportunities for food processors and manufacturers are opening up, including determining how to meet the changing consumer demands and finding new sales channels. 

Article by: Owen Roberts