During the last three months, as businesses large and small shut down across the country and around the world amid the spreading novel coronavirus/COVID-19, one constant provided critical relief: the knowledge that grocery stores were considered essential services, as were restaurants offering takeout, and fast-food establishments. While prices may have crashed for US farmers due to lackluster demand, the domestic food supply has remained unaffected.
Though the big picture may appear comforting, there is no denying that significant changes lay ahead for the US food industry. The US still imports approximately 15 percent of its food supply from some 200 countries and 125,000 food facilities despite robust domestic production. The US imports roughly 32 percent of its fresh vegetables, 55 percent of its fresh fruit, and 94 percent of its seafood from China, Thailand, Canada, Indonesia, and Vietnam. With food processing plants closed and supply chains disrupted, the new normal politicians and pundits regularly talk about coming to the food industry.
Like with other industries, the trouble isn’t with the food itself; instead, it’s with the supply chains. Food can’t be consumed if it can’t reach its destination. Even when supply chains re-emerge, lingering social distancing and heightened hygiene precautions may mean processing and distribution efficiency declines relative to the pre-COVID state.
Food For Thought
There’s also an underlying currency challenge: the continued strength of the US dollar, which as of this article’s writing, was gaining against the pound, yen, the euro, and the Australian dollar. While a strong dollar has its advantages – the ability for Americans to buy more overseas at a lower cost – exports become more expensive to buy. For small and medium –sized businesses exporting abroad, this can make their products harder to purchase – especially now with widespread COVID-related unemployment. Considered a “safe haven” currency in troubled times, the dollar strength is likely to continue and currency market volatility will remain high.
The outcome of these impacts is clear. Just as there has been talk about the reduction of political and economic globalization and a renewed focus on regionalism, so too, will there be a likely pulling back of the international food exchange. For the US food industry, which includes restaurants, supermarkets, and processing plants and the thousands of workers they employ, here are the steps they should take to ensure that their business doesn’t go hungry:
Identify consumption habits – The first step in a looming supply readjustment is to identify what’s being imported and consumed, and from where it’s purchased. Can you cut back on existing supply chains? For instance, are you a seafood restaurant that can shift imports from China to Canada, saving money?
Diversify your supply chains and opt for regional trade – In the post COVID world, Latin America stands to gain new business from the US and Canada. When it comes to US food importation, Canada, Mexico, France, Italy, and China, round out the top countries. But will France, Italy and China figure as prominently in the months and years ahead? Probably not. Begin cultivating new partnerships now with agribusiness closer to home looking to lock in western hemisphere deals.
Alter what you sell – As noted by industry experts, the US food supply is not in danger of running out any time soon. But as a small and medium-sized restaurant, changing up your menu to feature more meat and less fish, for example, might mean more profits in the months ahead. Domestic beef and poultry will be more accessible – and cheaper to secure – than, say, Chinese or even Canadian tuna.
Operate globally, act locally – Even in the post COVID world, globalization will not be dead. Far from it. It’ll just look a little different. For companies with staff overseas, it’ll be more important than ever to think of them as one united team and not disparate parts of an organization headquartered far away. Protecting staff from re-infection will be essential. It’ll cost money to upgrade your company’s PPE stockpile and coordinate social distancing and the possibility of staggered shifts. Investments in thermal cameras and auxiliary staff in case of new outbreaks will also be vital.
Room for Dessert
In addition to the above post-COVID pointers, there’s always room for dessert: Consider investing in contact-less (contact minimized) automation technology. Pre-COVID-19, there was growing excitement over the potential for artificially intelligent technologies to make even greater inroads in industrial scale applications, a market segment predicted to be worth $15.4 million by 2024.
AI – which is defined as the ability for a machine to perform tasks requiring human intelligence – is divided into three tiers: artificial narrow intelligence (ANI) artificial general intelligence (AGI) and artificial super intelligence (ASI). While anthropomorphic androids are decades away, primitive AI, or narrow intelligence, is already being applied across factory floors identifying inefficiencies in mass production operations via the collection of massive amounts of data. Whether employing such tactics in your businesses overseas, or partnering with a supply chain provider that does, could make your small or medium-sized business more robust for when the next pandemic strikes.
As the world emerges from the COVID-19 crisis, businesses of all shapes and sizes, employees at home and abroad, and consumers from every background will hunger for innovative solutions like this.
That’s true whether those solutions come imported or domestic.