In this 5-week series, “COVID-19’s Wake-Up Call: Food System Realities Reimagined,” experts from across the AVENIR GLOBAL network and global food system are exploring five new “food system realities” brought on by COVID-19, paired with reimagined possibilities and thought starters to help bring these possibilities to life.

Reality: Limited choices are forcing rapid adaptation

Business and consumers alike are facing unprecedented constraints. We have all been forced to become more resourceful in our home cooking and more efficient in grocery shopping due to COVID-19. Restaurants and foodservice operators have had to streamline operations and offerings to survive. Suppliers and food brands are figuring out how to apply a new model to their entire business.

Examples of how these constraints emerged during COVID-19 include:

  • The narrowing of SKUs at grocery retail due to supply chain disruptions, manufacturing delays or other availability concerns. Also, many manufacturers and retailers were forced to prioritize high volume essentials, leading to bare shelves in the early days of the pandemic in the United States. How this may evolve in the future: some retailers may decide they don’t really need 14 varieties of peanut butter, for example, and specialty products may struggle to find placements.
  • Shifting types of products available in-store: We are seeing larger cuts of meat (think whole chickens and full pork shoulder roasts) versus the value-added cuts, due to labor shortages and plant closures, and a rise in consumption of plant-based and alternative proteins. Even in the summer months, there could continue to be caps on quantities of high-demand products and shifting availability as the supply chain adjusts. What this means for consumers: they need to flex their home-cooking skills, get creative with their pantry and be willing to substitute ingredients to adapt existing preparations – or seek new recipes.
  • Streamlining restaurant menus: As restaurants transition back to outdoor and limited indoor dining, many are continuing with their adapted and limited food offerings. These menus were originally simplified to handle delivery and takeaway scenarios – which still account for a substantial portion of kitchen output even with dining areas reopening, according to restauranteurs. As restaurants further operationalize and navigate rolling re-openings, reimagined menus will remain – think proteins that can be used in multiple dishes and preparations and less emphasis on rare and premium ingredients.
  • People are scrutinizing what they put into their grocery cart. Money is tight and economic recovery will be a long journey. Many consumers are looking for low-cost, versatile products with a long shelf line and minimal waste. A recent FMI study said that 25% of shoppers have narrowed the range of items purchased because of COVID-19. With tighter budgets, consumers may also fear trying something new that they won’t like; this puts premium products and specialized food offerings at risk.

While retail food and beverage is expected to have positive growth in 2020, overarching consumer demand will likely be sluggish to pick up as people worry about their job security and spending power. Service will become more important than ever, but we know restaurants, hospitality and many in the food industry are struggling with reduced staff and rapidly evolving operating procedures with little advance notice, which creates a tension point.

Reimagined: Constraints will drive creativity

Necessity, as they say, is the mother of invention. Historically, times of crisis have produced some of the greatest food innovations. We’re already seeing experimentation take place in kitchens across the country and extend to food and beverage companies as well. One aspect of this creativity is reframing aspects of our food system. One example: food cultures developed processing methods mostly out of desperation and need to preserve food. During this crisis, artisan, farm-to-table restaurants are becoming middle-men between consumers and farmers and redefining what food processing means in an imaginative and positive way.  

Possible Paths Forward: How your organization can turn limitations into creative opportunities

There are a few approaches to find the creative solutions that lie in constraints. As consumers look to stretch food dollars, balance nutrition and reduce food waste, consider how your organization can:

  • Identify your north stars to ensure your product remains in carts – be it in-store or digital – during a time of limitations. What fundamental problem are you solving? Alternatively what value are you adding to people’s lives? Return to your product’s defining strengths and driving purpose to focus on what matters most during times of limited choice, supply chain issues, and beyond. One example of this is restaurants defining themselves as a “provider of food” versus a “place to eat.” This has allowed many to pivot to offer grocery or pantry staples in addition to prepared food – offering consumers access to wholesale pricing and convenience, while providing an additional revenue stream for restaurants.
  • Diversify marketing channels to reach the public in new ways. While having a single-minded focus on “north star” product attributes can help during chaotic times, diversifying the paths and vehicles to reach consumers in innovative ways is also paramount right now. In Q1 2020, Kroger’s digital sales grew 92 percent, showing a significant diversification of in-store vs. online experiences; the grocer’s chief financial officer, Gary Millerchip, said that COVID-19 has “changed the outlook for food retail in 2020 and we continue to monitor, evaluate and adjust our plans to address the impact to our business.” Farmers are selling direct to consumers, rather than restaurants, as are wholesale purveyors like Baldor that typically supply only stores, restaurants and institutions.
  • Become a one-stop shop educational resource. Food companies have the opportunity to educate consumers on how to use unfamiliar products or navigate other new “constraints.” In the early days of COVID-19, many consumers found comfort or security in rediscovering homesteading techniques, like sourdough bread baking. Brands can continue to nurture these new culinary skills in consumers. Work with partners – be they other products, associations or influencers – to develop content that helps consumers continue to learn new cooking techniques, imagine new meal and snack ideas and do more with less. One example: when COVID-19 hit, Pitango Gelato in the Washington, D.C. area found itself with too many whole leg Prosciutto di Parma hams. They offered them for $300 each (half the retail value) and partnered with the Consorzio del Prosciutto di Parma (a Padilla client) to host a training on Instagram Live so people would know how to slice them properly at home. They sold over 20 whole hams in their first week and had more than 100 people view the training session.

We can help your organization bring these possible paths to life. Padilla and FoodMinds have dedicated experts in brand purpose, content development and omnichannel marketing. We are in this together to build for the future – reach out to discuss how we can help your company adapt and thrive at [email protected].

In the next post in this series, we’ll explore our final reality and reimagined possibility #5, exploring food values that are facing new trade-offs.

Katie Myers is a vice president and co-leads the Food and Beverage practice at Padilla. She is based in New York City.