Food systems impacts of COVID 19
Food systems impacts of COVID 19
Posted by Steve Guilbert
26 January 2021
By Tim Wilkinson and Matt Lobley
We have been casting our minds back to November 2020. It feels like a long time ago now. A lot has changed; and while analysing some data we collected at the end of last year, we have been thinking about just how much. This week we are presenting some headline results from our Covid Food Business Barometer survey. We think the results help remind us that although the business outlook is currently gloomy, some businesses last year were feeling well adapted to working within the Covid restrictions and were confident about their future.
Should We Run a Survey?
In the end, we ran a short survey at the end of November last year for food businesses. But we were in two minds about whether to run it at all. We were worried that it might not be an appropriate time to be doing research given the challenges that food businesses were facing. We had designed a longer survey that was due to launch just as Lockdown 2 was announced. After much deliberation and consultation we decided to redesign a shorter survey – to minimise the time it would take businesses to respond. The survey was open for two weeks from 27th November to 12 Dec 2020. This period ran across the lifting of Lockdown 2 restrictions on 2nd December 2020 and into revised tiered restrictions. We received 87 responses, to a 12-question survey, which took respondents about 6 minutes to complete. We circulated the survey online via industry mailing lists and on Twitter (we had few responses from Twitter). About two thirds of responses came on the 30th November and 1st December â just before Lockdown 2 was lifted.
We think that the pressures on businesses and changing lockdown restrictions probably affected response rates, however we are pleased to have taken a snapshot of how some businesses were doing during this crisis. Due to the small sample size, the results should not be taken as representative of all food businesses. Indeed, the sample is quite likely to be biased towards businesses who felt they were well adapted to working within Covid restrictions and who were not facing major challenges. Nevertheless, the results tell an interesting story about how businesses who responded to the survey were feeling late last year. The results also give a sense of the scale of economic impacts that Covid has had on businesses.
Businesses who responded to the survey were from a wide range of food sectors and stages of the supply chain. We had responses from Bakery (11%), Meat (11%), Beverages (11%), Ready to Eat Meals (10%), Technical Services (7%), Consultancy Services (6%), Confectionary (5%), Fruit and Vegetables (5%, Grain and Starch (5%) and several more. The Fish and Seafood (3%) sector was not well represented in the sample so the results do not tell us much about that sector. In terms of supply chain stages, we had responses from food processing (11%), food manufacture (22%), wholesale and distribution (17%), import and export (11%), retail (11%), hospitality and food service (9%), consultancy services (11%). No one sector or supply chain stage seemed to be strongly over represented.
Feeling Well Adapted and Positive About 2021
Most businesses (77%) which responded to the survey were fully open and trading, but some were only partly open (20%), particularly in hospitality and food service, retail and manufacture. Just 2% of respondents were from businesses that were closed. Most respondents (82%) said that they were facing challenges but coping, while 15% said they were doing well. Only 3% of respondents were facing major difficulties. Perhaps this bias towards businesses not facing major difficulties explains why 85% of businesses said they had adapted well to working within the Covid restrictions, and why 67% said they felt confident about the future of the business. This was a very positive message, which was reiterated by businesses who, overall, scored themselves as well prepared for Lockdown 2 and for future Covid related restrictions. On a scale of 1 to 10 (where 1 was not at all prepared and 10 was extremely prepared), the mean score for being prepared for Lockdown 2 was 7.5 and for preparedness for future restrictions the average score was 7.4. This high level of preparedness is reinforced by a small majority of respondents (54%) saying that Brexit was a bigger threat to the business than Covid-19. We think that in late 2020, contingency planning may have shifted from âCovidâ to âBrexitâ, with the acute uncertainties around the deal at that time. For some businesses there may have been a sense in which they were as prepared for Covid as they could be, and that the more pressing issue was how to prepare for Brexit.
Table 1. Results of Attitudinal Questions Â
| Disagree | Neither | Agree | |
| I think the business has adapted well to the challenges of working within Covid restrictions | 9% | 6% | 85% |
| I am feeling confident about the future of the business | 9% | 23% | 67% |
| Brexit poses a bigger threat to our business than Covid-19 | 22% | 24% | 54% |
 Source: CRPR Food Business Barometer Survey
We think that these results show how positive and well adapted some businesses were feeling late last year. As weâve said, these results arenât representative of all food businesses and this was a small sample, but nevertheless it shows how some food businesses have been able to adapt to meet the challenges of new ways of working in the pandemic. We do wonder whether this positive outlook was coloured by the imminent lifting of the Lockdown 2 restrictions and perhaps a wider societal hope that the pandemic would abate in early 2021. Furthermore, November 2020 saw the US presidential elections outcome, financial markets recovering and, when we ran the survey, it was far enough away from Christmas that it was still something to look forward to. We donât want to under emphasise the pressures and challenges that food businesses face â or the work they have put into adapting to Covid, but our results indicate that some businesses do have moments of positivity and confidence. With the benefit of hindsight, we think itâs likely that the last minute announcements of tier changes over Christmas and subsequent Lockdown 3 will have changed the business mood. It certainly feels that way and elsewhere in this bulletin Michael Winter highlights some of the recent pressures facing the wholesale sector. Â But what we can learn from these results is that, while there are serious business challenges, there is also adaptation and confidence. The swing from feeling prepared to feeling unprepared can be very quick, but we shouldnât forget the times when businesses feel able to cope with the rapidly changing world. Itâs not easy to get prepared or to adapt. Itâs an achievement and should be acknowledged.
Economic Impacts
We asked several questions about how sales volume, turnover and profit have changed; how much they had changed over last six months (compared to pre-Covid) and how much they were expected to change over the next six months (compared to the last six months) on a scale from -100% to +100%. Please note that below we are only presenting the raw means, which includes outliers. On average sales volume (-20%) and turnover (-21%) were down about a fifth over the last six months, with an expected increase in both of 6% over the next six months. Profits were down, on average, by 30% with little change expected in the next six months. These averages wonât tell an accurate story for particular sectors; they are just an average across the whole sample. But we can see in our analysis, for instance, that a large proportion of those businesses whose sales volumes reduced the most (from -100% to -40%) were in hospitality and food service, and those whose sales volumes increased the most (from 0 to +80% increase) comprised of a large proportion of food manufacturing business. Covid has had an uneven impact on different sectors. But in the context of the overall figures for changes and expected changes in sales volumes, turnover and profit, the positive response to questions about adaptation, confidence and preparedness, are perhaps even more striking â given the likely consequences of these economic impacts on cash flow and savings.
Table 2. Results of Economic Impacts of Covid Questions Â
| How much haveâŠchanged in last 6 months compared to pre-Covid % (mean) | How much do you expectâŠto change in the next 6 months compared to the last 6 months % (mean) | |
| Sales volume | -19.9 | +5.8 |
| Turnover | -20.7 | +5.6 |
| Profit | -29.6 | -0.9 |
Source: CRPR Food Business Barometer Survey
Part of the reason for these economic impacts is business closure during lockdown and workforce issues, but it is also the costs of implementing Covid safe measures. Businesses responding to our survey experienced an average 10% increase in operating costs due to implementing Covid safe measures and a reduction in profit of 7%. We wonder what proportion of the increased operating costs are now fixed costs built into the system, and what proportion will be ongoing.
Where Next?
We know that the business attitudes and perceptions about the future will have been revised with the announcement of Lockdown 3 and the impact that changes to Christmas restrictions had on customer demand for some businesses, so we are planning the launch of a follow up survey in March. While the mood and outlook feel very gloomy at the moment, it remains possible that we may move quickly back to something more positive later in the year â or not, as the case may be. In this dynamic and uncertain situation it is easy to start to think that the last year has had little positive in it. But we think that the results of our short survey show the adaptability of businesses and their resilience in seeing a future for their businesses â despite the heavy economic burdens that the pandemic has placed on them.
A Note on Percentages Stated
In this blog we have only reported headline findings; percentages listed may exclude categories where responses were small or in âotherâ categories. For this reasons they may not sum to 100%. Percentage has also been rounded to the nearest whole number. For more information on the results, please contact t.j.wilkinson@exeter.ac.uk.