Government measures to put the UK into effective lockdown have thrown the foodservice sector into a state of turmoil. Nick Hughes looks at the short-term implications.
UKHospitality describes it as “catastrophic”. The British Beer and Pub Association says the sector is facing an “existential crisis”. Never in living memory has the business response to a developing situation been quite so apocalyptic in its tone.
Both in life and in business, things may never be the same again after the unfolding tragedy of COVID-19 has subsided. But in the short term, businesses must tackle a series of monumental challenges that in many cases will impact not just their own future viability, but the lives of those who depend on the industry to provide healthy, sustainable food, and the livelihoods of the millions for whom it is a source of employment.
At Footprint we intend to do everything we can to provide news, analysis and thought leadership throughout the difficult times ahead. To do so to the best of our abilities we ask you, our readers, to keep us informed of the challenges you are facing and how you are managing these.
At a time of such sensitivity we appreciate there may be unwillingness to identify individuals and companies. We respect this entirely and, whenever requested, will guarantee anonymity of sources once we have validated reports. Please email any information to email@example.com
We also ask you to share uplifting stories of good deeds, community spirit, innovative ideas and success in the face of adversity. Now, more than ever, is the time to put on a united front and promote the resilience and responsibility of our industry at the time of its greatest need.
As one catering source puts it: “The nature of hospitality is that we deal with stuff as we go. We’re an entrepreneurial, flexible sector and we will just get on with it.”
The news on Monday that all non-essential social contact should be stopped sent shockwaves through the eating out-of-home sector. The fact the government stopped short of mandating the closure of pubs and restaurants and other establishments was seen by some as a cynical move to avoid the state and private insurers picking up the tab for the cost of business disruption. Speaking on BBC Radio 4’s Today programme on Tuesday morning, Mark Jones, chief executive at Carluccio’s said his chain’s planning to come up with a business model that could be sustained had been “blown out of the water” by the government’s announcement.
Jones suggested the government had condemned businesses like his to death and called for “massive state intervention”. Later on Tuesday, Chancellor Rishi Sunak unveiled an extensive package of new measures to help businesses and individuals deal with the financial fallout from the virus including a business rates holiday for all firms in the hospitality sector and grants of between £10,000 and £25,000 for small businesses.
With schools and other public institutions still open at the time of writing, the immediate concern for contract caterers is on the disruption to corporate services contracts. “The single biggest impact on our business is that our clients – and particularly our more white-collar clients – are having their people work from home,” one contract caterer explains. “We have to go with it and find a way around that.”
Any drop in staff numbers on site will have a knock-on effect on the volume of food caterers need to supply. With the number of staff in situ reported to be falling sharply in workplaces across the country the risk is that food already ordered and in the supply chain will end up as waste.
Moreover, with most large contracts tending to be on commercial terms, caterers are worried about how they will cover the cost of staff. “It’s not a case that somebody else is going to pay for the labour, it’s down to us,” says the same source. “In any retail environment the sales pay for the staff.”
For those serving food to hospitals, the challenge is likely to be of a different nature entirely with modelling suggesting that demand for health services will overwhelm existing UK capacity as the spread of COVID-19 accelerates. Each NHS Trust is making its own arrangements to reflect local needs, according to Hospital Caterers Association chair Craig Smith. Where necessary non-essential services, such as retail outlets, will be reduced allowing staff to be redeployed to essential services such as patient food, he adds. “The Hospital Caterers Association is here for its members and is standing ready to help with advice and the sharing of good practice throughout the current situation.”
Supply shocks take time to feed down the chain. Although Prestige Purchasing chair David Read notes that there are some upstream issues in primary markets, such as pork trade with China, as yet he says these have not had a great impact on UK markets.
This reflects the experience of one foodservice distributor who told Footprint: “Supply chain wise we’re not seeing much yet. Everyone seems to be being relatively sensible at the moment.”
Future supply issues seem inevitable, however, as strict border controls take hold and the labour force is reduced.
In a recent blogpost, Read wrote that it is too early to predict outcomes with any reasonable degree of accuracy since the level of infection and its geography is entirely unpredictable as things stand.
He continued that if there are issues with food price it is likely to be generated by one of five situations:
- Production challenges – where production is impacted through a shortage of labour in an infected area;
- Transport restrictions – where the movement of goods is restricted by authorities seeking to ring-fence areas to avoid the spread of infection;
- Trade imbalance – where UK production becomes surplus because of consumption falling elsewhere in the world;
- Commodity markets – where markets are affected by trader sentiment regarding future sales;
- Abnormal demand – where product shortages result from increase in demand elsewhere, for example in the retail sector.
The major supermarkets maintain there is enough food in the supply chain to go round. But with some people resorting to panic buying the task of keeping the flow of food moving through the supply chain is likely to prove increasingly challenging – not least since the UK is only around 50% self-sufficient. Speaking to BBC Radio 4’s The Food Programme, Carina Perkins of The Grocer noted that in Italy, which has been placed in near total lockdown, there is an emerging issue with transportation of food staples such as olive oil, canned tomatoes and pasta as hauliers are reluctant to go into certain quarantined areas.
Issues associated with labour are broadly twofold:
First, there is the cost of employing staff who may not be able to carry out their normal day-to-day functions during a period of business inactivity or disruption. UKHospitality CEO Kate Nicholls said on Monday that the government had effectively shut the hospitality industry without any support, adding that “this announcement will lead to thousands of businesses closing their doors for good, and hundreds of thousands of job losses”.
On top of this, national minimum and living wage rates are due to increase in April, a move that the British Beer & Pub Association has called on the government to postpone.
The other issue is with how food supply chains will continue to function if workers are forced to self-isolate or care for children or family members at home. A fall in the number of available workers at any point in the supply chain – from picking and packing fruit and vegetables, to processing, manufacturing, preparing and serving food – risks having a knock-on effect on the ability of businesses to keep catering services functioning effectively. Food workers often work in close proximity to one another meaning one person contracting the virus risks putting many more into self-isolation.
Prior to Monday’s announcement, foodservice operators had already introduced new measures to ensure higher-than-normal hygiene standards. These included regular sanitising of “high-touch” surfaces in front-of-house areas, and requirements for employees to wash their hands between every different task, including handling money.
Even though the government’s social distancing policy will cause many outlets to close, other businesses will need to sustain more rigorous hygiene measures for the foreseeable future. Starbucks attracted headlines for its policy of banning reusable cups, but one environmental health expert believes there are greater risks that must be managed for food operators.
She explains: “The virus […]could be passed from a customer to a staff member through any hand or surface contact if the customer has touched a contaminated door handle, counter top , table etc – for example if the customer has used a plate or a cup while eating or drinking and the staff member collects it. [Businesses] can attempt to reduce the risk of contamination by wiping surfaces with an appropriate antiviral cleaner, but they will be recontaminated as soon as they are touched again by someone who has or has come into contact with the virus.”
In normal times, many foodservice businesses support the fight against hunger by redistributing food to those in need and supporting the frontline charities who provide safety nets for the most vulnerable people in society. Speaking to The Food Programme, Lindsay Boswell, FareShare chief executive, said that in any form of lockdown there was a challenge in continuing to get food to those people via existing networks such as community cafés and food banks.
As the Coronavirus situation develops rapidly, FareShare anticipates increasing demand for its service and is calling for more funding, food and volunteers to effectively respond to the Coronavirus outbreak and ensure the most vulnerable are not put at increased risk of hunger.
The Sustain alliance, meanwhile, is calling on the government to ensure that low-income households receive enough money so that they can buy food and feed themselves.
These represent just a few of the immediate challenges that businesses, employees, customers and citizens more generally are facing. Many more will emerge as we move deeper into this unfolding and unprecedented crisis. Footprint is in a position to be able to share best practice, and by doing so help businesses manage the situation to the best of their ability.
Please do get in touch at firstname.lastname@example.org