Adjusting to the new normal: Challenges of the food sector in the wake of COVID-19

Abstract

The ongoing COVID-19 pandemic has affected more than 180 countries around the globe causing severe business disruptions. Lockdown in many countries has led to panic buying and shortages of food, medicines, personal protective equipment, raw materials, basic goods, etc. As a result, while some businesses have benefited from this sudden spike in demand, many have already collapsed and many others are on the brink unless and until rescued by governments or private investors. In particular, the food sector, which relies heavily on global supply chains to meet the demands of local consumers, is working around the clock to maintain an adequate flow of food products to feed the nations. Countries that have taken strict measures such as full lockdown, however, are struggling to balance their demand and supply as in-country and cross-border supply has been severely affected. Stock-outs were much more common in the early phase of the crisis due to panic buying that influenced the vertical supply chain. To meet the changing food demand, grocery retailers have started working more closely with local farmers for the essential supply of food items, thus realising the benefits of short food supply chains. This paper attempts to explore the way the food sector is dealing with the current unprecedented situation and proposes some potential risk-mitigating pathways.