COVID-19 continues to impact near term foodservice recovery

Disruptions related to COVID-19 will slow foodservice recovery throughout much of the world in 2021, with sales and foot-traffic still well-below pre-pandemic levels, according to a new report from Rabobank.

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eric1513 | Bigstock.com
eric1513 | Bigstock.com

Disruptions related to COVID-19 will slow foodservice recovery throughout much of the world in 2021, with sales and foot-traffic still well-below pre-pandemic levels, according to a new report from Rabobank.

China could be the best indicator of how quickly and to what extend the foodservice industry will recover after COVID-19, given that the country is ahead of the curve globally for virus containment, the report noted.  

What is next for foodservice?

If the spread of COVID-19 continues to subside, foodservice recovery will shift from near term to strategic planning over the next six to 12 months. The pace of revenue recovery, government stimulus, key cost drivers and cash flow challenges could also impact recovery.

Smaller operators will have to innovate to survive in this challenging operating environment.

“Many of these operators may not survive the current disruptions, leading to a materially different industry landscape compared to pre-COVID. However, the final number of closures could be lower than what was originally feared as new capital steps-in to take advantage of new opportunities,” Maria Castroviejo, Senior Analyst – Consumer Foods, Rabobank, said in a statement.

Will accelerated trends continue?

The COVID-19 global pandemic accelerated several consumer trends, including delivery, remote workspaces for many and sustainability. Many of these trends are expected to continue post-pandemic, which could reshape the future of foodservice.

Sustainability, in particular, could result in some of the greatest transformational changes in the coming years.  Long associated only with environmental issues, sustainability has transformed into a catch-all term that also encompasses animal welfare, social and other issues.

“COVID has forced many companies, particularly smaller ones, to delay or defer some of their sustainability initiatives. Survival indeed comes first; however, we firmly believe that sustainability remains near/at top-of-mind. In fact, pressure from consumers, regulators, management and investors returned in 2H 2020 and has, if anything, accelerated announcements and targets related to sustainable packaging,” the report said.

View our continuing coverage of the novel coronavirus (COVID-19) pandemic.

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