Around the world, fears of food shortages during the COVID-19 pandemic sparked panic buying. Despite an abundance of produce here in Australia, supermarket shelves were often bare of groceries. Why? It’s a logistics problem—food supply chains can be long and (some say unnecessarily) complex.
According to theAustralian Food and Grocery Council, Australia is capable of producing enough food for 75 million people, three times its own population. While our food supply is considered secure, shutdown measures and transport restrictions put in place to contain COVID-19 have had serious implications for global food security. The UN’sFood and Agriculture Organization (FAO)says that the pandemic continues to affect agriculture and food production and puts vulnerable populations at risk.
Disruptions to food supplies
Here, we take a detailed look at how a global crisis like the COVID-19 pandemic can disrupt food supply and look at emerging data-based solutions that could make the supply chain more secure.
The food supply chain starts with the production of fresh fruit, vegetables, meat, seafood and grains. Natural disasters like droughts have caused ‘supply shocks’ in the past, but COVID-19 has caused problems of a different kind.
Labour shortages are an immediate problem during a crisis. Continent-wide lockdowns can prevent seasonal harvesters from travelling, which can lead to fields of abandoned,rotting crops.
As well as an active workforce, primary producers need essential resources like fertilisers, seeds and veterinary medicines, and any shortages can affect future agricultural production. If properfarming practicescan’t continue as normal, this could lead to reduced harvests in later seasons.
Transportation and warehousing
The safe and uninterruptedtransportation of fresh produce,meat and seafood is critical in the food supply chain. Ashortage of truck drivers means that products can’t leave the farm, while transport delays are of particular concern forlive animal transport and meat supplydue to animal welfare issues and food spoilage.
The export market can also be disrupted. If planes are grounded, fresh produce can’t beexported overseas. Thismeans that farmers and exporters can’t access high-value overseas markets, affectinginternational trade. Sourcing refrigerated shipping containers from China also became an issue during COVID-19 shutdowns.
Wholesale and food processing
Farmers sell a major portion of their produce to wholesale markets for commercial kitchens, but demand falls if pubs, bars, cafes and restaurants close due to shutdowns. Our food supply chains are highly specialised, which often means that wholesale productscan’t be diverted to retailbecause they’re packed in bulk and not labelled in the right way.
Farmers also sell produce to variousprocessed food sectors, such as manufacturers of dried, canned and preserved foods, snacks, confectionery and processed meat—many of which were forced toclose during shutdowns overseas.
Ever wondered how supermarkets can offer customers a choice ofmore than 40,000 items? It’s by keeping very little in stock, with the bulk of products stored at distribution centres or warehouses. The logistics of replenishing stock is controlled by tracking sales with algorithms that have limited ability to adapt to sudden changes in consumer behaviour, which is known as the ‘just-in-time'concept. That means a sudden rise in demand for certain products—such aspasta, rice and flour—can quickly prove to be unmanageable.
This is exactly what occurred in many countries during COVID-19. If there aren’t enoughstaffto load, transport and unload products from warehouses, the result is empty shelves. Panic buying can also result in avicious cycleof shortages and unrest, which is well documented by agricultural economists.
However, disrupted food relief services have caused serious adversity forvulnerable householdsaround the world, reinforcing the need for well-connected food donationnetworks. According to theFAO, developing countries are most at risk from food insecurity: nations that already suffer from chronic hunger and that rely on imported food.
COVID-19 has undoubtedly accelerated changes in consumer purchasing patterns.Consumers are switching to online food shopping platforms and visiting supermarkets less frequently, as well as showing greater preferences for local food with traceable origins.
Sustainable food production
According to theFAO, developing countries are most at risk from food insecurity: nations that already suffer from chronic hunger and that rely on imported food. Populous countries in Asia and Africa are particularly threatened by ongoing climate and health challenges. In the latest State of Food Security and Nutrition in the World Report, the United Nations warns that COVID-19 could push an added 130 million people worldwide into chronic hunger by the end of 2020.
Action on food security and climate change can be achieved simultaneously, according to the Intergovernmental Panel on Climate Change. Developing shorter food supply chains means that perishable foods can be quickly transported, which supports local suppliers and lowers environmental impacts. Another approach is agroecological farming practices that promote biodiversity, improve soil and water quality and recycle nutrients and energy.
These sustainable solutions require financial assistance and regulatory agreements from governments and policy makers to help feed an increasingly hot, hungry world.
Crisis-proofing the food supply chain
Even before COVID-19, food supply chains have beenin transition due to multiple factors, from trade disputes to climate change. It’s clear that they need to become more resilient, agile and flexible to cope with supply and demand shocks, and new technology and data platforms can help prepare for future disruption.
Solutions for the supply chain: traceability with blockchain
Traceability is the ability to track food products through all stages of the supply chain. It’s incredibly important to maximise efficiency and becomes even more vital in the case of transport delays or contamination tracing.Food industry expertsbelieve that increasing the strength and security of supplier communications is essential to ensure food safety and traceability.
A promising technology to enable traceability isblockchain, a digital platform where users store and share information across a network. This system can give producers, suppliers, distributors, retailersand consumers access to trusted information regarding the origin and state of each product or ingredient. It isn’t yet widely used across thefood industry, but has the potential to increase visibility through our increasingly complicated supply chains.
Solutions for producers: online sales
COVID-19 didn’t just boost downloads of food delivery apps. Physical distancing restrictions meant that livestock sales moved online too, through apps that connect farmers directly to buyers. Carrying out auctions via video stream negates the need for the animals to be trucked to saleyards, a hands-off approach that’s better for animal welfare. As their popularity increases, online sales could eventually replace traditional livestock auctions.
Farmers who lost sales when restaurants and cafes closed also turned to e-commerce tosell their products directly to consumers. Withnumerous examplesof farmers adopting tech-based solutionsaround the world, shorter food chains could become the norm post-COVID.
Solutions for warehousing and transportation:tracking and storing perishable products
During COVID-19, finding warehouse storage space for food products became a challenge. Avoiding bottlenecks like this requires creative storage options, such as compact vertical warehouses closer to cities, which would also help cope with increased demand for online food deliveries.
For the transport of perishable goods, tracking perishables through the cold food chain is essential to prevent a whole shipment going to waste. The latest sensor technology can be instrumental in preventing food waste and compromises to human health, as can smart food packaging that monitors food condition. These solutions are highly applicable to any crisis that affects food supply chains.
Solutions for retail:advanced inventory management
The latest inventory management and replenishment platforms aim to respond faster to changing consumer behaviour—crucial to avoid bare shelves during unusual events. They keep inventory data up-to-date using automation and real-time tracking technologies, such as radio-frequency identification and Internet-of-Things capabilities. Using advanced predictive tools, such as improved data processing with artificial intelligence and machine learning, retailers can better respond to disruption.
A crisis like COVID-19 has taught us that our complex food supply chains need greater transparency and flexibility to prepare for future disruptions. Making food supply chains more agile, resilient and adaptable is essential to protect the economy and feed the world.
Both the coronavirus (COVID-19) pandemic and EU exit may have contributed to these supply chain blockages by further limiting the mobility of labour. These bottlenecks have encouraged some businesses to rethink their supply chains.How does the pandemic affect the supply chain management is it positive or negative defend your answer? ›
The COVID-19 pandemic has posed significant challenges for supply chains globally. Multiple national lockdowns continue to slow or even temporarily stop the flow of raw materials and finished goods, disrupting manufacturing as a result.What is affecting the supply chain? ›
Economic markets and specifically inflation, geopolitical and trade risks, and the changing global health situation will all impact supply chains.How did the pandemic caused supply chain issues? ›
Supply chain problems emerged during COVID-10 lockdowns due to shifts in demand, labor shortages and structural factors.How has the pandemic affected supply and demand? ›
Demand shocks and problems with supply chains contributed to increased volatility in import, export, producer, and consumer prices in the months following the onset of the COVID-19 pandemic in the United States. Meat, fish, dairy, and eggs were especially affected by the shifting economy brought on by the pandemic.How has Covid affected food industry? ›
With the continuation of shelter in place restrictions, the food and agriculture industry will be impacted by changes in food buying behavior tied to fear, health policy and social distancing. As unemployment claims reach historic highs, the impact of a recession will fundamentally change consumer buying habits.How has COVID-19 affected the food service industry? ›
Due to the lockdowns and rigid restrictions on food service operations due to COVID-19, countless food service employees have been laid off or furloughed or have experienced a reduced number of working hours. In fact, the food service industry has been one of the hardest hits in the economy by the pandemic .What possible ways to overcome the issues facing the supply chain? ›
- Closely track inventory. Inventory is inextricably tied to the supply chain. ...
- Explore alternatives. ...
- Take advantage of pricing deals. ...
- Track and forecast sales. ...
- Communicate with customers. ...
- Pivot your products and services. ...
- Revisit relationships with suppliers.
For example, if a company sources raw materials in China, manufactures the product in India and sells it to customers in North America, its supply chain is global.What are the biggest challenges in supply chain? ›
- Keeping transportation costs down.
- Keeping up with customer/industry demands.
- Sourcing consistent, reliable carrier capacity.
- Keeping up with the latest technology solutions and demands.
- On-time pickup and delivery performance.
SCM Helps Sustains Human Life – Humans depend on supply chains to deliver basic necessities such as food and water. Any breakdown of these delivery pipelines quickly threatens human life. For example, in 2005, Hurricane Katrina flooded New Orleans, LA leaving the residents without a way to get food or clean water.What is causing the supply chain issues 2022? ›
Staff shortages caused by the pandemic have also defined the current supply chain crisis. Lockdowns and layoffs have resulted in smaller workforces and a need for skilled workers. As a result, skilled laborers have moved away from city centers into rural areas— making hiring and recruitment even more challenging.Why is there a global supply chain shortage? ›
What Caused Supply Chain Shortages? Global supply chains are the networks between companies and their suppliers needed to turn materials into the products they sell. Massive supply chain shortages emerged in the wake of pandemic lockdowns that shut businesses around the world and kept workers at home.What are the causes of shortage of supply? ›
What's causing America's supply chain issues? A worker shortage and high demand are causing delays. As the U.S. economy struggles to fully recover from the coronavirus pandemic, supply-chain disruptions across the country are driving up prices and leading to a growing shortage of goods.› blog › covid-19-supply-chain-im... ›
The Impact of the COVID-19 Supply Chain Disruption
How COVID-19 is affecting the global supply chain
How has COVID-19 impacted supply chains around the world?
The rising cost of living
This makes it difficult for supply chain planners to accurately estimate in advance the amounts and types of goods likely to be needed by consumers. The pandemic has already changed this picture considerably, but predicting demand has become even more difficult in 2022.
The surge in freight rates, labour shortages in strategic parts of supply chains, the stockpile of containers in ports, COVID-19 and its regulations, and climate vulnerabilities, are all causing inflation and affecting the growth of the Canadian and global economies At the global level, the FAO Food Price Index—a ...How Covid is reshaping supply chains? ›
The COVID-19 crisis put supply chains into the spotlight. Over the past year, supply-chain leaders have taken decisive action in response to the challenges of the pandemic: adapting effectively to new ways of working, boosting inventories, and ramping their digital and risk-management capabilities.Why are supply chains still disrupted? ›
Where stable and reliable supply chains were once taken for granted, organizations are now having to be much more mindful of risks such as key material shortages, labor scarcity, volatility of demand, lack of production capacity, unpredictable freight transit times, and transportation cost increases, to name a few.