20% of food businesses say market outlook ‘has improved’ due to Covid-19
Some 20% of food businesses say that market outlook for them has improved due to Covid-19, according to new research carried out by Grant Thornton.
There are a number of reasons why this is the case, according to the professional services firm, including renegotiated terms of businesses which may provide a greater long-term opportunity; changing consumer behaviour resulting in increased demand for produce; and the use of technology which may make businesses more efficient.
The survey also shows that one-out-of-three of the businesses who responded had changed their route to market as a result of the pandemic, while 35% have used new technologies to cope with the Covid-19 challenge.
Grant Thornton explained that the food industry has been pushed into a “sink or swim” scenario. However, the firm also noted that new opportunities had been presented for some.
The main positive impact of Covid-19 on the food industry seems to have been the adoption of technology. Over a third of respondents identified the increased use of technology as a positive impact from the pandemic.
Businesses felt that the use of technology, while done to address the short-term problem of Covid-19, will also have benefits in the medium and long term.
The food industry has shown great resilience to recover from initial Covid-19 shockwaves. Almost instantaneously, customer demands and business operations changed to meet global and national market changes.
“Unsurprisingly, the industry has placed a real focus on curtailing costs and driving increased revenues, and where possible increased margins. Logistics and supply chain costs have risen significantly during this period,” noted Padraig Ryan, a director in Grant Thornton’s business consulting team.
“The industry has sought to offset new additional expenses by reviewing financial and commercial arrangements and implementing cost cutting and lean measures within their businesses. These practices are coinciding with a focus on capitalising on new consumer behaviours and market opportunities,” Ryan added.
The consultancy firm said that, in the future, food businesses will need to asses what changes should be retained and what should return to normal as society does so.
Grant Thornton also observed that, while there would be challenges ahead for many food businesses, the industry is “well-equipped” to navigate them.