Will we get to the other side?
Nearly every country on the planet is having to deal with Covid-19 and clearly some are handling the crisis better than others.
Roy D. Palmer, President Association of International Seafood.
Nearly every country on the planet is having to deal with Covid-19 and clearly some are handling the crisis better than others. Sadly, we are told that globally things will get much worse, especially in travel and hospitality. The most successful countries have taken a strong health pathway and enforced their communities into lockdowns. By doing this the risk of virus transmission is limited but lockdowns have serious implications on the economy and the ‘million dollar’ question is how soon do you come out of the lockdown; how quickly do you establish the economy and how has it impacted your industry?
Whilst retailers have generally been open and trading across the world events have been cancelled or at least postponed, the travel industry has grounded to a halt (the international airline industry have recently suggested it will be 2024 before any return to normality) and along with that the tourism and hospitality industry has been decimated. Restaurant and catering operators have either closed or innovated into delivery/take-home operations. The impacts on the full seafood supply chain are profound.
In the UK it has been reported that the export market disappeared overnight and with foodservice concerned about virus spread this only left the supermarket as the go-to for seafood. Whether this was an opportunity lost or a massive failure on previous marketing but when the panic buying started, the consumers came for the beef, pork, lamb and especially chicken whereas chilled fish packs were left on the shelves. As nothing changed in the buying dynamic the quantity of fish on offer diminished. A colleague has suggested that this was due to the absence of older consumers, who would have been more receptive to buying a variety of species but, due to the virus, were told to stay at home.
Supermarkets then decided to cease all service counters including fish to enable staff to help with restocking shelves. The closure of supermarket fish counters meant that what fish was being harvested had few buyers and this was reflected in the prices to the fishers thus making operations unworkable.
This issue sparked interest in a recent article about a ‘celebrity’ chef and restaurateur whose business was part of the government-mandated restaurant closures across the United States and as a result he has helped form of the Independent Restaurant Coalition (IRC), a new lobby group. The article highlighted his reasons for engaging the new group which is concerned about the fragility of the American food system, the rights of workers, and the as-yet-uncharted road to reopening restaurants.
In the US independent restaurants employ approximately eleven million people but when supply chains, like farmers, fishermen and winemakers, etc are added they indirectly employ over double that volume of people. The article highlighted for the most part, with restaurants, every dollar that comes in the door, ninety-five cents goes straight back out the door again!
Reopening restaurants will need to see a change of behaviour – limited numbers of customers for social distancing; waiters, barista’s, and bartenders with masks; disinfectant laden cleaners wiping door handles; screens to protect cashiers and what of the customer? Hard to imagine eating in a restaurant with a face mask! Opening a restaurant is one thing but getting customers is something else – people cannot be forced to spend their money and will need to be enticed to get ‘back on the horse’. There has also been a lot of restaurant angst about people booking a table then not turning up – could we see deposits with bookings or some other arrangements to arrest this? Importantly too will be how much credit will be allowed as bad debts will likely cripple some suppliers’ businesses.
The restaurant formula that was operational and profitable previously is clearly not going to work whilst the virus remains alive and well and without any vaccination available and that means it is going to be some time before any return to normality. Some innovation has been evident over the last few months with takeout, delivery, some sort of service, plus community feeding but it is unlikely this would be the sustainable solution for everyone.
Employment opportunities in tourism and hospitality are not going to be the same as they were whilst we are in the pandemic exists and with a reluctance to open borders. The chef at the centre of this article suggested it maybe better not to re-open right now and delay until later in the year or even next year. And then the concern is once opened, how do you survive? He suggested so many restaurants will open, and then in six months they will close, and they will not open again. Just like there could be a whole second wave and even more waves of the virus, there is going to a whole second wave of closures.
The essential part of his strategy was keeping his specific supply chain alive and ensuring his point of difference on niche quality produce and is not keen on letting these suppliers die on the vine and then having to rely on big chain foodservice supplies. He highlighted the innovative program established by one of his colleagues in New York offering a series of food and farm boxes. The boxes feature vegetables, whole grains and fresh bread, local meats, fish, flowers, and pastured eggs and are available for purchase daily. Proceeds from the boxes support the staff and regional farmers and enable them to provide meals to local healthcare providers who are heroically confronting this crisis every day, as well as to communities in need. In his words “He’s realized that he’s no longer a chef—he’s a food provider and processor.” The difficulty is preparing and cooking at home has been on the wane in the last decade.
The article also pointed out the Covid-19 issues with US meat producers with many closings because the virus swooped through their entire workforce due in so no small part to poor social distancing in the factories. It has been suggested that as much as ninety per cent of the US meat supply could be affected by these shutdowns. The farmer who is growing pigs, he/she is not slaughtering those pigs himself—they are sold either through the system or directly to the processor. Now that the processor has shut down, what are the farmers supposed to do with those pigs? The stories keep coming through about farmers are throwing milk out, destroying fruits, vegetables and other crops and produce because the food chain has broken and yet meanwhile people are lining up for food which they desperately need for their families. When you start tracing things backward through various parts of the food system, you realize how big of a problem this has become.
In the US this has led to discussions about wages and workers’ rights in those plants, and that’s probably part of the reason all these workers are getting sick. They had zero ability to protect themselves and sadly no job means no health cover in many cases. The industry has slowly become centralised so when there is a problem the fragility of the chain is highlighted. The system is not as resilient although it may have been considered more efficient.
Not to be forgotten is that in the US multi millions of people are reliant on food stamps through the Supplemental Nutrition Assistance Program (SNAP) system. Feeding America also highlight that from the beginning of March through early May, food banks nationwide distributed more than 947 million meals to people facing hunger in the United States. In March alone, food banks gave out 20 percent more food than an average month.
What the pandemic has shown us is that the seafood supply chain is far from secure. The lack in every nation of solid professional industry associations protecting the industry and its workers is patently obvious and the so-called developed countries are in no better shape than those considered underdeveloped. The months ahead will be interesting to see if we can make it to the other side!
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