The South West Farm Survey 2020

 

By Tim Wilkinson

The fourth Centre for Rural Policy Research South West Farm Survey went out in the post in October 2020 and we have a great set of responses to process and analyse. Having run a farmer survey for the South West in 2006, 2010 and 2016, we are excited to see how the data compares with previous years. As in preceding years, the survey was sent to land managers in Cornwall, Dorset, Devon, Gloucestershire, Somerset, Wiltshire and the Isles of Scilly. This is a broadly defined South West, which was initially drawn from New Labour’s South West region (abolished in 2009) and maps onto the Nomenclature of Territorial Units for Statistics (NUTS) region for the South West (UK).

The 2020 survey includes a wide range of questions: about the farm business and how it has changed, labour, use of technology, attitudes towards agriculture, succession plans and much, much more. Many of the survey questions are repeated (or evolved) from those asked in previous years so we can track trends and build a longitudinal data set; others are designed in response to current issues, this time, including Covid impacts, Brexit and Environmental Land Management.

We originally planned to launch the survey in March 2020, but delayed for obvious reasons. We sent out 4000 questionnaires in late October 2020 and reminders in early December. We have had 1110 returned – an incredible 28% response rate (a huge thank you to everyone who took part!). The data is currently being entered and processed. With 41 questions in each individual survey, there are well over 45,000 answers to record – a monumental job! We will be starting the analysis of the data in April and are looking forward to sharing results from the survey soon.

So has diet changed as a result of COVID-19?

 

By Prof. Michael Winter

No-one is in any doubt that the Pandemic has for many people changed where they eat, especially during the lockdowns, with home cooking and takeaways flourishing at the expense of eating out. But the question of what people are eating is more complex. Headline data from Kantar published by the AHDB earlier this month compared Christmas food purchasing in the UK for 2020 with previous pre-pandemic Christmas sales.[1] Grocery sales were up by 11.7% on the previous year, compared to a mere 0.2% increase between 2018 and 2019. The largest year on year increase over the last decade was 6.1% between 2011 and 2012. Not surprisingly, Online was the big Christmas 2020 grocery winner and consumers shopped around less, continuing a trend seen throughout 2020.

What is interesting about these figures is that the closure of hospitality is likely to be less distorting of consumer trends at Christmas than at any other time of the year. Yes, of course, hospitality venues would normally boom in the run-up to Christmas and in the New Year and some, of course, do open for Christmas Day itself. Moreover prior to COVID there had been a sharp increase in eating out on Christmas day, but from a low base, estimated in The Caterer at just 3% of the population in 2017.[2]  So most people home-cater for Christmas day itself. Keep in mind that 11.7% overall sales increase figure as we turn to particular categories of growth between the festive seasons of 2019 and 2020:

 

 

[We are grateful to the AHDB for permission to reproduce the above graphics]

 

So dairy products, beef and pork significantly outstripped the overall trend. Perhaps somewhat counterintuitively, accompanying vegetables did not grow at the same rate with volume sales increases of 14% for carrots, 5.1% for parsnips and 7.2% for sprouts.[3]  So is the long term trend towards less meat being bucked by the pandemic? Well it’s too soon to say and data for one Christmas certainly do not make a trend; and data are still emerging on diet change and will continue to do so. This piece is not an attempt to provide any definitive answers but I turn now to two pieces of independent academic research recently covered for some further indicators around the ‘what’ question.

The first looks at whether individuals and families in the UK have changed their food choice motivations over lockdown and was based on 248 respondents to an online survey.[4] The authors, Sarah Snuggs and Sophie McGregor, caution that the results are preliminary and the sample was small. Respondents were asked to reflect on their food goals and motivations before lockdown and in the Summer 2020 looking at the relative importance of Health, Mood, Convenience, Sensory Appeal, Natural Content, Price, Weight, Control, Familiarity, and Ethical Concern:

Results indicated that the sample placed more importance on health, weight control and mood when choosing their food after lockdown than they had before, and less importance on familiarity. A number of sub-groups were identified who may be particularly vulnerable to food-related challenges in future lockdowns including younger adults, parents and carers of children, those self-isolating and individuals who do not live within close proximity to food shops.

Some of these findings need to be treated with caution. For example, as the authors point out, a concern with health may be caused by concern about weight gain rather than healthy eating per se. They also point to some fascinating differences between their sub-samples. Younger people changed more than older people with 18-26 year olds placing increasing emphasis on health, price, weight control and natural content and less on convenience and familiarity. The authors speculate that this this might be encouraging for improved health behaviours going forward. But on the other hand,

(T)hey might reflect the more negative point that young people are more likely to have become unemployed or furloughed than older individuals leaving them with more time to consider their food choices, but also more pressure to keep costs down.

In short, there is a lot we don’t know, and of course asking people about what motivates their food choices at best offers only a proxy for my ‘what’ question.  After all, when someone says I am eating more healthily we don’t know for sure what that means. As in any research, understanding the precise methods adopted in social science research is important. So when we come to our next paper, superficially there seems to be an immediate contrast with the Snuggs and McGregor work.  But the devil is in the detail of the aims and methods used (hence, of course, the need for multiple methods and sources for conclusive analysis of this topic). Buckland et al. offer interesting data on unhealthy eating during the pandemic.[5]

The researchers set out to increase understanding of the risk of overeating during lockdown period. Again they adopted an online survey which gave them 588 responses to analyse, 485 were from the UK and 219 from non-UK countries. The study aims were to:

  1. Assess reported changes to food intake (changes to overall amount eaten and for High Energy Dense sweet and savoury foods) during the first COVID-19 lockdown.
  2. Identify the eating behaviour traits that increase susceptibility to increased intake of HED (High Energy Dense) sweet and savoury foods.
  3. Explore whether adopting coping strategies linked with reduced distress (active coping, acceptance and positive reframing) would moderate the relationship between eating behaviour traits and changes to food intake.

48% of the sample reported increased food intake. But it is a complex story. For example, while respondents were more likely to report increased snack intake than increased meal intake, there was an increase in fruit and vegetable intake. Mean changes to HED sweet and savoury foods were low but there was a high degree of variation and 22-26% did report increasing consumption of HED sweet and savoury foods.

This is a complex paper so do look at the full version if you want to get to grips with the detail.  The authors are psychologists with a particular interest in craving and its control. Let me finish with their own conclusions to the paper:

In conclusion, within a sample of mostly white, educated, not low income, and not home schooling participants, this study identified the role of craving control as an important predictor of increased HED sweet and savoury food intake in response to the UK COVID-19 lockdown. The study also showed that the increased HED sweet food intake reported in people scoring low in craving control was reduced in people who adopted an acceptance coping strategies. Strategies that promote improved craving control and acceptance coping strategies should be further investigated as targets for future interventions to promote controlled food intake during viral lockdowns.   

 

[1] https://ahdb.org.uk/news/consumer-insight-beef-and-dairy-winners-this-christmas

[2] https://www.thecaterer.com/news/restaurant/number-of-people-eating-out-on-christmas-day-set-to-treble

[3] https://ahdb.org.uk/news/consumer-insight-produce-and-potatoes-benefit-from-smaller-christmas-celebrations

[4] Snuggs, S and McGregor, S. (2021) Food & meal decision making in lockdown: How and who has Covid-19 affected? Food Quality and Preference, 89, 104145

[5] Buckland, N.J. Swinnerton, L.F. Kwok Ng, Price, M. Wilkinson, L.L. Myers, A. Dalton, M. (2021) Susceptibility to increased high energy dense sweet and savoury food intake in response to the COVID-19 lockdown: the role of craving control and acceptance coping strategies, Appetite, 158, 105017.

 

How can we understand the complexity of the food system?

Spaghetti Junction UK

 

By Tim Wilkinson

I don’t understand how the food system works. That might sound like an odd thing to say from someone working on this project. But two unconnected things have hit this home recently.

First, the plight of wholesalers who have been treated differently in terms of government support and have not been able to access the same funding as retail and hospitality. Reports of millions of pounds worth of stock being left in warehouses after school closures in January 2021, and of wholesalers staying open to supply a reduced customer base of care homes, prisons and schools while suffering severe financial losses, made me realise how little I really understand about how food moves from food wholesalers to shops. This ‘hidden’ part of the food system is clearly critical; and while I have an idea of warehouses and distribution networks, in my mind it is a Lego version of all of that.

Second, I’ve been looking at industry classifications for types of food businesses for a survey we plan to run later this year. The variety of food business is absolutely huge. We have been using Standard Industry Classifications to help identify food businesses and to structure a sample. These are categories with fun, technical titles like ‘Retail sale in non-specialised stores with food, beverages or tobacco predominating’. Based on our search terms, there were approximately 45,000 food business contacts available. The list of businesses was fascinating. It included familiar business types like butchers, green grocers and cafes and restaurants, but also ‘makers of brewing equipment’, ‘bacon curers’ and ‘chocolate fountain’ suppliers. I’ve thought a lot about how Covid has impacted food businesses over the last 9 months but quickly realised I didn’t appreciate the full range of businesses involved.

So to help me better understand the food system, I’ve been thinking about how I see it at the moment. My instinct is to look at the food system as a linear sequence of steps. If you asked me to explain the food system to a five year old, I would say something like this: plants and animals are grown by farmers (and other food producers), they are sent to food processors who clean them up and begin turning plants and animals into something you can eat, from the processor food goes to food manufacturers who combine ingredients to make a food product, it is packaged and stored, then it is sold by wholesalers, and distributed to retail and hospitality businesses who sell the stuff.

But even aside from differences in the supply chain between food sectors, the reality is far more complex. Almost to the point where I lose the sense of it being a food system that is organised in a consistent way. While I might wish to see separate stages in the supply chain (producers, processors etc.), these can be collapsed – for instance by a farmer who grows, processes, manufactures and sells a product from the farm. Even where there are definitive and separate supply chain stages, there are networks of brokers and agents, importers and exporters, technical support, consultants and manufacturers of equipment who work in between these so-called stages and blur boundaries between them. Furthermore, any linear understanding of food being passed along a chain misses the dialogue between businesses on the specification of products, branding and marketing, and regulatory frameworks that guide and assure quality and safety. I’m sure there are many other reasons why my linear view is inadequate too.

In March last year, the idea of the ‘just in time’ food system was much talked about; supermarket ordering algorithms designed to keep shelves stocked with food (and fresh food) were affected by spikes in demand and required human intervention to set them straight. It feels a little bit too easy to talk about the ‘just in time’ food system in one phrase – it gives me the sense that I understand more than I do. So over the next few weeks I want to learn more about how food moves through supply chains, in particular from manufacturer to the supermarket shelves. How do systems of warehousing, shipping, haulage and transportation really work and what differences are there between sectors? How does demand from retail translate ‘back’ along the supply chain – how much stock do manufacturers make in advance? Why aren’t supply chains as visible as farms and retail in the public eye?

How can we ‘build back better’ and what’s the role of plant-based diets?

 

By Prof. Michael Winter

In July 2020, the UK Global Food Security Programme and the Biotechnology and Biological Sciences Research Council hosted a workshop with a range of stakeholders from across the UK food system. The workshop sought to determine the research and innovation needs and opportunities around ‘building back better’ through Covid, and how this might enhance the resilience of the UK food system to future shocks. I was one of the 54 on-line attendees, as were Expert Panel members Barbra Bray and Caroline Drummond. A report summarising the discussion is now available: Building back better for increased resilience of the UK food system to future shocks (2020). Workshop Report.

The Executive Summary highlighted the key findings as follows:

  • From an agricultural perspective, research into improving the UK’s soil health is crucial, alongside the development of enhanced climate models. Measures to address the UK’s ageing farmer base are also identified as important.
  • Local food production is a useful supplement to globalised supply and demand, alongside improved data sharing within supply chains and a greater ability of producers and manufacturers to ‘re-pivot’ their activities in a disruption scenario.
  • Expansion of plant-based protein and fruit and vegetable production in the UK through enhanced inter- and intra-crop species diversification is important, not only to reduce risk from disruption to supply but also to better ensure the UK can meet its nutritional needs in any future disruption scenario.
  • Understand the complex range of factors influencing nutrient uptake and consumer dietary choices and the potential for enhancing the nutritional value of foods. This is alongside the role of diet in COVID-19 related deaths and an underpinning need to improve overall dietary health.
  • At a supply chain level, there is a need to identify ways to buffer just-in-time systems against food shortages. Solutions should focus on adaptability, for example, by utilising emerging technologies, such as digital twins, which can help different supply chain actors react to a disruption in concert rather than isolation.
  • In order to facilitate a more resilient UK food system, stakeholders are clear that research and innovation needs to be interdisciplinary and international and that applied research must be adequately funded.
  • It is essential that any research and development opportunities are systemic. If implemented in a piecemeal fashion, resilience will not necessarily ensure that food is affordable, accessible, safe, healthy and produced in a way that underpins, and benefits from, a thriving natural environment. These areas must therefore be consciously enshrined in designs for food system resilience.

 

The prominence given to dietary change and plant-based foods is unsurprising, but I was interested to think about this in the context of the findings of the Peoples’ Climate Vote published on the 26th January 2021.

The People’s Climate Vote was based on 1.2 million respondents (although only 35% answered the policy questions I refer to below), spanning 50 countries, including the UK, and covering 56% of the world’s population. The survey identified six policy areas (energy, economy, transportation, farms and food, protecting people, and nature) each with three sub-options – giving a total of 18 policy possibilities. On average, respondents backed eight out of the 18 climate policies, and 97% supported at least one policy. The most popular of the 18 policy options, supported by 54% of respondents, was to conserve forests and land, while the least popular (35%) was the promotion of plant based diets. Of course, most reading this will immediately point to the fact that to conserve land requires dietary change: True! And others might suggest that the results would be different in countries such as the UK: possibly, but plant based diets did not make it in the top ten policy option preferences for high income countries, including the UK (there is no data for individual countries presented in the report).

What do I conclude from this? Well two things to stimulate thought and perhaps some debate:

  1. Dietary choice is deep wired in people’s identity and selfhood, and even events as grave as the climate change emergency will not shift people’s thinking on food easily or quickly.
  2. Those promoting a very rapid transition in agriculture to organic or, so-called, agro-ecological systems, predicate their arguments on a significant reduction in animal-based food.

The tensions between these two observations are obvious. What is less clear is how such tensions are resolved. Maybe the forthcoming National Food Strategy will give some clear guidance on the balance between regulatory, market and behaviour changes that might be needed to secure both food and environmental security. One thing clear to me is that farming is largely in responsive mode in this debate. Farmers have the skills to manage the land and produce commodities, but precisely which commodities, and at what volume, is inevitably an outcome of markets and regulation. In other words, to end on a provocative note, promoting a wholesale transition to organic farming in advance of a clear sense of how food markets might change, seems rather curious. Farmers will respond to market and policy signals but what these will be, as we attempt to build back a better food system post-COVID, it’s too early to say. This is not to suggest that farmers and other players in the food system are merely passive. They are also players in the development of markets and regulations.

The Footballer and Food

 

By Prof. Michael Winter

I don’t often watch football. I used to enjoy playing but that was many years ago and somehow I just much prefer watching rugby these days, maybe because that’s a sport I never did play.  Be that as it may, on Sunday evening I did tune into BBC 1 and watch Manchester United take on Liverpool in the fourth round of the FA Cup.  And I was prompted to do so in part because I wanted to see Marcus Rashford MBE.  He did not disappoint, scoring one goal and making another with a superb pass. He is some player for sure. He is also perhaps the most prominent celebrity name in the Covid food story, leading fund raising efforts to support children in poverty with food; and at the same time taking on the Government over free school meals, most recently successfully challenging the quality of some food parcels.  In this respect, Rashford is following in the footsteps of other celebrities, notably Jamie Oliver who, as long ago as 2006, highlighted quality issues with regard to school canteens.  Back then, it was the Compass Group under fire and it so happens that the miscreant highlighted by Rashford over food parcels was Chartwells, a subsidiary of Compass.  Compass Group plc may not be a well-known name but they are a FTSE 100 company and a global player in catering.  As the Guardian points out:

Catering services are typically fragmented between many small providers, but Compass has profited from being one of the few catering companies with global scale and 550,000 employees. … The pandemic has also dented Compass’s profits as canteens in offices, hospitals and military bases have remained shut around the world. Compass’s earnings before tax fell by 85% in the year to 30 September 2020 to £210m.’[1]

There can be no doubt that the food parcel that caused such offence was sub-standard – the photograph went viral and does not need reproducing here – but I have just a little sympathy for companies, big or small, trying to adapt to fast changing policy demands.

I remember some academic colleagues back at the start of the pandemic writing to the Prime Minister suggesting that food rationing should be introduced, which I interpreted as headline- grabbing shorthand for more controls and a clear strategic policy within the food system. To me, and I would welcome feedback on this, the Marcus Rashford story highlights a failure of strategy within the inevitable policy intervention in the food system during this crisis.  We have a situation where Government has intervened massively in the economy to an extent unprecedented since the Second World War, but neither the institutional architecture nor the nature of the policy deliberation process comes anywhere near what was put in place around the food system in 1940.  And it was a very sophisticated, perhaps overly bureaucratic, set of interventions which certainly involved the farming and food industries directly in shaping and implementing policy.

I can’t resist just finishing on a footballing note. The football league was, of course, suspended from 1940 to 1945 but in the first season of its resumption in 1946/47 the champions were none other Liverpool and the runners up Manchester United!  Plus ça change!

 

[1] https://www.theguardian.com/business/2021/jan/12/school-dinners-row-shines-light-on-role-of-catering-firms-chartwells-compass

 

Covid Food Business Barometer – summary of results from a short survey in late 2020

 

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 – 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 ‘Covid’ to ‘Brexit’, 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   

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 we’ve said, these results aren’t 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 don’t want to under emphasise the pressures and challenges that food businesses face – 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 it’s 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.  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 shouldn’t forget the times when businesses feel able to cope with the rapidly changing world. It’s not easy to get prepared or to adapt. It’s 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 won’t 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 – given the likely consequences of these economic impacts on cash flow and savings.

 

Table 2. Results of Economic Impacts of Covid Questions  

How much have…changed in last 6 months compared to pre-Covid % (mean) How much do you expect…to 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 – 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 – 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 ‘other’ 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 .

The Plight of Wholesalers

 

By Prof. Michael Winter

I suppose it is hardly surprising that most media attention on food throughout the panic has tended to focus predominantly on the retail and hospitality sectors. After all, that is where millions of people have felt the changes in our food system most keenly. However, at our January Expert Panel meeting, attention was drawn to the plight of wholesalers, especially with regard to the speed with which the rules on lockdown restrictions changed in early January. To be specific, the Government maintained ‘a back to school come what may’ policy until, that is, they suddenly dropped it! Let James Bielby the Chief Executive of the Federation of Wholesale Distributors take up the story:

‘Before Christmas, the government were adamant schools would stay open on the basis they were low risk. Schools placed orders for food from their wholesale partners in preparation before going off on two weeks’ holiday. Stock was ordered in accordingly by wholesalers ready for shipment in January. … Then the new lockdown was announced by Boris Johnson, taking effect at midnight on 5 January. Schools closed, hospitality largely shut down. Remember, we had Brexit stockpile, Christmas stock which was impossible to sell and now orders placed for and by education. All of that stock suddenly redundant. How much? £12 million of excess stock, all of it created by misinformation and planning failure by the government. Schools sent back orders placed before Christmas. The treasury announced a support package, but of course there was nothing for wholesale.’ [1]

These are hard-hitting words. I am told that the number of pupils in school, due to a broadening of the definition of essential workers, is greater during this lockdown. I telephoned the Norse Group, the largest commercial Local Authority Trading Company in the UK, responsible for supplying many schools, and they assured me that they were still providing schools with food though, of course, at reduced levels.  It is not clear whether the £12m excess stock referred to in the Wholesale News on the 14th January factors in some continuing supply of school or not.  Perhaps someone reading this can provide us with more detail.  These comments are not in any way designed to detract from the central thrust of the wholesalers’ concerns. In any case, this is far from the end of the wholesalers’ complaints.  In addition to the surplus stock issue, there is the issue of free school meal packs ‘which were keeping wholesalers afloat in the absence of any government support’. Criticism of the quality of some of these packs led to another media feeding frenzy:

‘… the government did another U-turn today (14 January) and changed the Department for Education guidance on free school meals and reintroduced the voucher scheme. Government by headline. No strategy or consistency. Just following the news, not leading it. … There’s a lot more excess stock in wholesale now, after schools cancelled the food parcels in their droves. Supply orders have been made by wholesalers for the next few weeks to supply FSM. … And where can the vouchers be redeemed? Supermarkets! That’s the biggest irony of all. The government has today handed wholesale trade directly to the supermarkets – just to chase a headline.’ [2]

 So this is much more than just a story about losers within the food system as a result of pandemic restrictions, it is also about shifts of power and market share within supply chains.  The boundaries between different players in the food chain are being disrupted and blurred. Not all of this churn derives solely from the pandemic. For example, some supermarkets had already moved into the wholesale sector, with so-called hybrid wholesalers, the Co-op and Morrison’s, growing their market share within wholesale from 6.5% in 2018 to 9.2% in 2020:

‘The Co-op provides wholesale services to the fifteen independent regional co-operative societies, as well as to Nisa and Costcutter – in addition to its own retail estate. Meanwhile, Morrison’s supplies Amazon and McColl’s. Lumina Intelligence estimates that both operators will see wholesale turnover increase by around 15% in 2020.’ [3]

And, of course, those more traditional wholesalers supplying retail have seen increased demand whilst those focussing on hospitality and catering for institutions such as schools are really suffering.  Some wholesalers have offset losses by finding new routes to market:

‘JJ Foodservice launched JJ Home in July 2020, signalling the permanent addition of its DTC (Direct to Consumer) service – initially introduced as a stop gap – to the wholesaler’s portfolio. JJ’s has also invested in smaller delivery vans to negotiate tighter London streets and most recently has launched a “Christmas at Home Essentials range” for its consumer customers.  Similarly, Bidfood has formalised its DTC business “Bidfood at Home” and has plans for national roll out. Meanwhile, Brakes has launched its “Food Shop” venture which has been selling direct to consumer since March 2020.’ [4]

The fact that some wholesalers have come up with innovative partial solutions, to the challenges they face is not surprising. It is equally unsurprising that some have been unable to do so, given the heterogeneity of the sector.  The fact that wholesalers are not included in this year’s hospitality support measures suggests the Government does not grasp the diversity of the sector either, nor its importance in a system that, despite initial fears, has largely maintained food supplies during the pandemic. It is hard to avoid a sense that a rather crude politics is at play here. Most food wholesalers are not household names in the way that major retailers and hospitality brands are and their pleas do not easily find ready media coverage. And if this appears to be a criticism only of government let me finish by turning the spotlight on my own sector of academia.  The Web of Science is one of the leading on-line bibliographic indexes covering academic publications from across the world. I did a search for all publications with the words ‘food’ and ‘wholesale’ in the title over the last twenty years. The search came up with 27 ‘hits’. Substituting ‘retail’ for ‘wholesale’ gave 842 publications. For not the first time in this project I find myself wondering why so much public, policy and scientific attention is given to food production (farming) and to food retail (consumption), but so very little to the complex system that ties these two together.

 

[1] Bielby: ‘Government by headline’ twists the knife in wholesalers’ backs – FWD

[2] ibid

[3] Growth In Wholesale Sector Slows As Pandemic Leads To Polarisation And Change | KamCity

[4] ibid

A New Consumer World View?

 

By Steve Guilbert

About this time last year, in amongst the usual ubiquitous year-end top ten lists and articles about trends we should be looking out for in 2020, were reports of an outbreak of a mysterious illness in a Chinese city.   As we entered the New Year and decade no-one could have predicted just how truly extraordinary, challenging and transformative 2020 would turn out to be.  This year will teach us many valuable lessons but surely in the top 10 of any 2020 takeaways is the maxim that predicting the future is a fool’s errand.

Yet as we draw near to another New Year, in the media and blogosphere predictions again proliferate about what we’ll be wearing, driving, reading, watching as well as eating and drinking in 2021 and beyond.[1]  Most are mildly diverting clickbait but some offer real industry insight about how habits and attitudes have changed over this past year, how likely these changes are to be permanent, and the extent to which they might now be considered, to use a much repeated phrase, the new normal.

A good example of the latter, that’s been recently published and picked-up by a number of news sites, is the Waitrose and Partners Food and Drink 2021 Report.  It’s short, concise, full of fascinating insight, and brimming with consumer survey data on what and how we buy, and our changed attitudes to food: where it comes from, how we cook it, and how important it is to our health and well-being.

 

Some Stats for Starters

Let’s have a few interesting stats for starters.  You’re probably familiar with the ‘mega-trend’ that is home pickling and preserving (searches on Waitrose.com for ‘pickling’ up 222%) but perhaps less so with the return of oxtail (sales up 258%) and the home working associated trend for slow-cooked meat.  Clams, cockles, mussels and oysters are reportedly back too with sales of British seafood up 200% over the last six months, while the popularity of Asian store cupboard essentials like Japanese Rice Vinegar (up 180%) and Chinese Rice Vinegar (up 194%) represents something of a new trend.  UK social media mentions of pulses are up an incredible 600% (although presumably from a fairly low base?), while the desire for barista quality coffee at home has seen a 64% increase in sales of ‘bean to cup’ coffee machines.[2] 

What factors can explain this ostensibly random assortment of individual trends?  The Waitrose and Partners report identifies a number key structural shifts in consumer attitudes and behaviour that have occurred over the course 2020.  The first of these concerns cooking.

 

Cooking

The pandemic, the report argues, has permanently changed our relationship with food, with cooking and eating assuming a more central and meaningful place in our lives.  This was found to be particularly the case for those working from home, three-quarters of which stated that cooking dinner provided the break between ‘working time’ and ‘home time’, in effect punctuating the day in a similar but more positive way to the commute.  63% of working-from-homers also reported that mealtimes have become more of an event, a sentiment shared by three-quarters of young professionals who found that the ritual of preparing something to eat had taken on an increased importance.  Moreover, we are apparently also more organised as a nation with 53% of us now carefully planning meals and writing shopping lists and 66% of us now more watchful of waste.

 

Shopping

Not surprisingly, another one of the fundamental ‘seismic’ shifts in consumer behaviour caused by COVID and highlighted in this report concerns how, where, and when we shop for food.   The pandemic, it confirms, caused an unprecedented surge in online food shopping, with a quarter of us buying food online for the first time and three quarters of us now doing at least some of our grocery shopping online (up from 61% a year ago).  As a result of this online surge Waitrose.com has trebled its size and now accounts for nearly 20% of the total business (up from 5% last year).

But it’s not just how, but how often we food shop that’s also changed, with many people rediscovering the benefits of the less frequent food shop.  57%, for example, reported food shopping once a week or fortnight in 2020 compared with 39% in 2016.  This year may also have witnessed some of the final nails in the coffin of cash with Waitrose reporting that it accounted for only 10% of in-store transactions during COVID (down from 22% pre-COVID).  With reduced fears of transmission risk use of cash may well bounce back to pre-COVID levels but many of the other significant shifts in shopping habits look likely to be more permanent with 60% of survey respondents saying the changes they made during COVID will stick long-term.

 

Attitudes to Food and Farming

If our behaviour has changed significantly, so has our attitude to food.  The pandemic has focused minds on the things that matter and we have, the report suggests, ‘a new appreciation for the food we buy and how we buy it’.  It found, for example, that 57% of us value food more now than we did pre-COVID.  As has been mentioned in some of our previous posts, one of the key things it seems we have come to value when it comes to food is familiarity, comfort and nostalgia, manifest in things like increased sales of traditional favourites and efforts to be more self-sufficient (four in ten of us, for example, grew our own food during the long lockdown), and less wasteful (seven in ten homeworkers sometimes ate last night’s leftovers for lunch).

We also seem to have an increased appreciation for the people who produce and supply our food.  70% of us now value the role of supermarket workers more than we did at the start of 2020, while 74% of people want to see more food businesses in the UK express their support for local British producers – although shoppers themselves seem a little less enthusiastic to buy local British produce directly with only 44% saying they’d consider subscribing to a service that sent fresh produce directly from farm to door.

 

Health and Well-being 

Nevertheless, the importance of ‘localness’, community and neighbourhood have all emerged as strong themes over the pandemic.  60% of those who got involved in their local communities over lockdown, for example, said they intend to carry on, a figure that rises to 70% among the 35-44 age group.

Even more local still, maintaining our own physical and mental wellbeing has, the report suggests, been paramount over the pandemic and led to a ‘permanent readjustment in many people’s psyches’.  53% of us, it claims, feel the pandemic has acted as a reset button in our busy lives.  60% of respondents, for example, have been trying harder to keep themselves physically heathy during the pandemic.  On waitrose.com portion size searches are up 57%, high fibre recipes 230%, high protein recipes 330%, and Mediterranean meal plans up a colossal 630%.

Of course, visitors to waitrose.com are a long way from being representative of the UK population as a whole, and while the research that informs this report was not undertaken exclusively with Waitrose shoppers it clearly should be read as an interesting portrait of a certain privileged demographic.  The picture it paints of ‘our’ changed food attitudes and behaviours and our experience of the pandemic could not contrast more shockingly with the picture painted by another recently published report from the Social Market Foundation, which finds that one in four children, 3 million in total, have faced some form of food deprivation in the six months following lockdown, and  that 16% of parents said that their children made do with smaller portions, had to skip meals or went a day without eating between March and September.

 

A New Consumer Worldview?

The Waitrose report confidently proclaims that from the disruption and uncertainty of COVID-19 comes the ‘emergence of a new consumer worldview’.  Our daily rituals, and attitudes to supermarkets and the way we shop have all been fundamentally reshaped, it suggests, and what’s more, ‘these changes are here to stay’.

I’m not sure about the emergence of a new food ‘consumer’ worldview.  With the report’s references to localness, participation, community, health and well-being it sounds a lot like people are thinking and behaving more like the engaged and proactive food ‘citizen’ espoused by April Rinne of the World Economic Forum in a recent Forbes article, than it does the ‘passive, just-buy-this’ consumer.

Given the year we’ve had, and the uncertainly that still, at the time of writing, lies ahead in 2021, I’m not sure either that I’d be as confident in my predictions for the future.  For the food system, things will never quite be the same again for sure, but the scale and permanence of these changes still remains to be seen.  Predicting the future is a fool’s errand and none of us really knows what the long-term looks like.  What perhaps we can say, however, and to quote a sage member of our own Expert Panel, is that while we don’t know what the long-term looks like, ‘we know it’s closer than it used to be’!

 

[1]  See for example:

https://www.foodmatters.co.uk/podcasts/the-future-of-food-a-look-at-consumer-trends-with-wgsn/

https://www.bidfood.co.uk/podcast/trends/food-and-drink-trends-for-2021-social-trends/

https://www.foodbusinessnews.net/articles/14778-what-well-be-eating-in-2021-according-to-robots

[2]  All sales figures are compared with the same period the previous year, unless otherwise stated.

The Impact of Covid-19 on the UK Fresh Food Supply Chain – A Summary

Assorted peppers on a supermarket shelf

 

By Prof. Michael Winter

Research results from other projects on the impact of COVID are beginning to emerge and this month I am highlighting a paper led by some Exeter colleagues based in the Business School here at the University, Rebecca Mitchell and Roger Maull, working in collaboration with researchers from the University of Lincoln. The full paper The impact of COVID-19 on the UK fresh food supply chain can be viewed and downloaded at: https://arxiv.org/abs/2006.00279

The researchers reviewed secondary data on retail demand (using Kantar data) and conducted interviews with 23 organisations associated with the UK fruit and vegetable food supply market, as well as running four video workshops with 80 organisations representing 50% of the UK fresh produce community.   The three main questions are:

  1. What was the change in retail demand for fruit and vegetables resulting from COVID-19?
  2. What was the impact on UK suppliers of fruit and vegetables?
  3. What types of innovation are emerging within supermarket coordinated supply chains of fruit and vegetables?

 

Some headline findings are as follows (but do check out the paper for the full details):

Research Question 1: Change in Demand

  • The 12 weeks from 27th January 2020, compared to 2019, saw retail in the sector increase by 11% by value and 12% by volume.
  • In the 4 weeks following shut down of the food service sector, retail sales of the same lines increased by 14% by value and 13% by volume.
  • There was considerable variability across products. For example canned tomatoes, had an uplift by value relative to the same period in 2019 of 103% at the peak of w/e 15th March, and saw week-on-week uplift in sales volume exceed 22% for 3 weeks in a row. Over the 12-week period, the total volume of fresh vegetables sold was 11% higher than the same period in 2019, with carrots showing a 12% increase but broccoli having the same demand. 

Research Question 2: Impact on Suppliers

This section in the paper is quite short and I was left wanting more!  Here is a direct quotation indicating the importance of the analysis:

‘One of our interviewees, who source fresh produce internationally, reported that for the first 18 days of the epidemic, orders were running at 120% and then suddenly “dropped to zero”. They noted that their supermarket buyers had left the algorithms that control order replenishment to operate without human intervention, which resulted in supermarkets seeing increased waste as supply exceeded demand. Buyers then began to intervene, manually adjusting the previously automated orders. This had an enormous knock-on effect for the supplier, who ultimately decided not to trust the order pattern of their customer, to make adjustments based on experience and eventually “ran our own plan”. They noted that “whilst supermarket ordering systems are brilliant in normal phase, they didn’t compensate well for large variations emerging because of COVID-19”. The interviewee concluded that their waste bill was twice its normal level, and that profitability would be reduced accordingly. This was not an isolated example. An important issue for our supply chain partners was the “chaos” caused by this algorithmic ordering. Most large retailers use these algorithmic replenishment models and supermarket processes strictly control modifications to subsequent orders, but these huge weekly spikes led to a gross perturbation….’

Research Question 3: Innovation  

This issue is the leading motivation for these particular researchers. Again let me quote directly from the paper:

‘In some instances there was evidence that suppliers were able to adapt rapidly to changing market conditions – these were predominantly situations in which suppliers were already focused on the retail sector, and were primarily dealing with uplift in demand. Suppliers usually dealing with the service sector coped better in situations in which there were not significant capital assets (such as packaging equipment) required in order to enable them to switch product line (e.g. to create smaller volume packages to deliver to retail rather than wholesale) or channel (e.g. responding to increased demand from online retailers, or delivering direct to consumers via “veg boxes”). In situations where this was not possible the role of convening groups, representative bodies and levy boards has been visibly important. For example in early May, building on their open-access analysis of potato markets, AHDB launched “The Potato Portal” as a mechanism by which to connect potato growers with wholesale buyers (AHDB, 2020c).’

But overall they conclude that the system is stuck in a rigidity trap, unable to exploit more radical innovations such as more localised supply chains and industrial robotics.

Lockdown 2.0

Hand written 'Closed Sign' in shop window

 

By Tim Wilkinson

In the second national lockdown we saw food service and hospitality businesses restricted to takeaway only. The only option to ‘eat out’ was at outdoor street food markets, who could continue trading. A poll of 242 food business operators during the week of the announcement of the lockdown found support for the measures was divided (41% supported, 43% did not support, 16% undecided). In late October, business groups warned of the potentially devastating effects on hospitality and food service sector, emphasising the need for business aid and the prospect of a loss of 750,000 jobs. With bars, cafes, pubs and restaurants only able to offer takeaway, staff have been laid off and some hospitality workers are facing homelessness as a result. Although the extension of the furlough scheme has helped to retain staff in some cases, it may not be enough to keep businesses trading, for instance, where mandated closure and negative cash flow has caused a build-up of rent arrears.

Closure of hospitality businesses in lockdown 2 has also put pressure on suppliers and wholesalers serving the food service sector. Although schools, care homes and hospitals still need supplies, without food service customers, industry leaders warned that some wholesale businesses will become unsustainable. Strains on supply chains prompted reflections on the resilience of the food system and the ongoing pressures of the pandemic were found to be impacting some food exports, such as Scottish red meat and offal (which has fallen 8% according to levy board Quality Meat Scotland).

We have now heard that that the tiered system will return and I expect that the impacts of the second national lockdown will become clearer over the next month or so. November and December are of course a crucial trading period for many food businesses, and the altered system of restrictions will shape the strategies businesses can use to resume trading and recover.

 

Two National Lockdowns Compared

Like the first lockdown, it has been suggested there may be some benefits for local and independent food shops. Delivery of local food, through start-ups like Farmdrop, also look likely to continue. Garden centres staying open might also have supported speciality food, especially in the run up to Christmas. Research from Springboard, found that, 63% of people will spend more in local shops in the run up to Christmas 2020, while 36% will spend more on food compared to last year. We know some independent food businesses who made agile responses to increased demand for takeaways and home delivery benefitted during the first lockdown. But we heard from our Expert Panel this month that with larger and global businesses now well prepared for delivery and click and collect, competition will be higher. The pressures of lockdown 2 on independents may be harsher.

Similar, although not identical, to the first lockdown, there was a dash to stock-up ahead of the November lockdown; queues and shortages of some products were reported. However, this time the rush was not just to purchase food to eat at home, but to restaurants, and pubs, and for non-food retail shopping.  High-street footfall was up, at least in post-Covid terms (although it was still 28% down compared with last year, according Springboard data cited by the Financial Times). There was some stockpiling of products like sugar, flour and pasta. For instance, sugar sales were 74% higher than the same week in 2019. Once again, purchase of familiar foods is expected to grow in the lockdown and Premier Foods (makers of Mr Kipling cakes, Bisto gravy, Ambrosia and Bird’s custard) are expecting increased sales. So it looks like lockdowns are continuing to fuel a diet of familiarity and comfort.

Compared to the first national lockdown, many food businesses had better systems in place for managing demand this time. Supermarkets were better prepared to manage customer flows, operating traffic light systems or marshals in an extension of existing customer management arrangements developed over the summer/early autumn. While there was some panic buying prior to the lockdown, I haven’t found reports of long queues for supermarkets during the lockdown. Perhaps a combination of supermarkets messaging (for customers to shop alone) and online delivery options lowered footfall in supermarket stores.[1] Jo Whitfield, Chief Executive of the Co-Op said that consumers are spending more on ‘top-up shops’, which have come to complement a shift to ‘big shops’ and online orders, developed in the first lockdown. So more frequent, but shorter shopping trips, may also be spreading footfall in lockdown 2 as customer behaviour adapts.

There has also been continued evolution of customer management, such as the launch of Marks and Spencer’s Book and Shop system, a virtual queueing system where you can book a shopping slot and avoid queuing outside. Waitrose and Sainsbury’s are also trialling similar systems, so customers may see more of this next year. Being so new, virtual queuing probably didn’t have much of an effect on lockdown supermarket use, but may become more apparent in the context of ongoing restrictions. In the first national lockdown supermarket ranges were reduced and rationalised.  Even in June ranges were down 9% compared to pre-Covid. But recent research by Assosia found that the numbers of stock keeping units and promotions in nearly all supermarkets has all but returned to pre-pandemic levels. Supermarket supply chains seem to have been better prepared and adapted to Covid restrictions in lockdown 2.

The second lockdown has seen the benefits of the development of the at home market for meal kits – which allow customers to cook or reheat restaurant food at home. Global companies such as the Mindful Chef, Gousto and Hello Fresh have seen soaring subscribers. But local alternatives have also emerged, such as Prepped (there are of course many others) which delivers meal kits from multiple restaurants (in Cambridge and Saffron Walden areas) without a subscription. In 14 interviews with restaurants, an Evening Standard article gives reports from businesses that the market for online sales is becoming saturated and a strong sense of the precarious financial position that some businesses, who are making up for sales with meal kits, are in.

The tiered system will reopen much of the economy, but the survival of many food businesses is still in question. As Covid restrictions change food businesses and consumers are trying to keep up. We will have to see how the renewed tiered system affects the way we make, sell, buy and eat food.

 

[1] If anyone could point me to any supermarket footfall data for lockdown 2, I would be very interested to know whether numbers have dropped, or whether footfall had spread more evenly across the day, lessening customer pressure.