How has Ireland’s food supply chain coped with Covid and what’s next?
High demand for groceries set to continue as bars and restaurants restricted to takeaway
With social and family gatherings being restricted, the traditional family Christmas may witness a change not only in terms of party size but in what food and drink consumers will demand. Photograph: iStock
The Irish supply-chain profession is well regarded internationally and is accustomed to dealing with seasonal surges. But the demand experienced in retail and other areas during the pandemic was unprecedented and the speed and flexibility to which the Irish food and drinks industry responded has been remarkable, highlighting the resilience of the supply chain. Representatives from Ulster University’s food and drink development centre explain how this was achieved:
“Disruption occurred right across this supply chain with farmers, processors, distributors, retailers and consumers alike having to adapt to surges in demand. The pandemic caused unusual market conditions with food producers and retailers called upon to support the economy to cope with emergency-induced changes in demand.
“We believe the Irish food supply chain has done exceptionally well despite notable disruptions across the supply chain. For farmers and producers, the lockdown presented challenges around the availability of the labour supply and materials. For distributors, limitations in air travel and cargo, and delays on road transport due to border checks presented challenges in getting fresh produce to market; while for retailers issues relating to seismic shifts in consumer demand and stock-outs have been well documented throughout the media. By prioritising planning, placing focus on online operations and implementing store restrictions on consumers stockpiling key items, retailers managed to quickly rectify the issue of stock-outs. Covid has also left grocery shoppers with the challenge of navigating a new “normal grocery shop”. As consumers entered lockdown we witnessed a shift away from food service with consumers placing a focus on provisioning their household and recreating the restaurant experience at home.
“Currently with Level 5 restrictions across Ireland until at least December 1st, it is likely that we will continue to see disruptions across the food and drinks supply chain. As bars and restaurants are restricted to serving takeaway food or delivery, demands on grocery retailers will continue. The potential continued closure of the hospitality industry may mean an oversupply of stock to food service, meaning issues around food waste or the cost of food being sold at reduced price or on discount. Also, with social and family gatherings being restricted, what we know as a traditional family Christmas may witness a change not only in terms of party size but in what food and drink consumers will demand. Will consumers want to dine out on Christmas this year? Who knows. But while we may see a reduction in the volume of food purchased over that period, equally we may notice that those consumers, not having to cater for larger families, may make more higher-value luxury purchases as a treat to get them through a Covid Christmas should the restrictions continue.
“The UK’s decision to leave the European Union will have wide-ranging effects for the supply chain and will have implications for the Republic of Ireland given the number of established trade deals with Northern Ireland. We are likely to see increased costs due to trade barriers or tariffs across the supply chain getting passed on to the customer, meaning a likelihood of reduced sales turnoverand disruption to existing supplier relationships – with agreements or contracts between North and South needing to be renegotiated to allow for additional costs within the supply chain and potential logistics complications. And we may see declines in customer service levels, where increases in delivery and shipping costs may mean “next day or expedited delivery” will experience delays, longer lead in times and increased costs.
“Over the next few months, food retailers and manufacturers will have an important role to play in the health and wellbeing of the nation. There is a strong link between food and mood. During turbulent times, consumers seek reassurance from familiar brands they trust. Supply chains must remain resilient, meaning that retailers will need to work closely with their suppliers to ensure that those key, familiar and popular brands that consumers trust and value will not see interrupted supplies. Longer term impacts of Covid may include the promotion of a healthier lifestyle, thus brands that accentuate health and emotional wellbeing look set to benefit.”
Written by Dr Lynsey Hollywood, Dr Trevor Cadden, Prof Barry Quinn, Prof Paul Humphreys, Prof Geoff Simmons