Covid-19 challenges and responses for the food industry

February 2020

Covid-19 has disrupted normal business operations, and each industry faces its own challenges. As the control measures enter a new stage, many business leaders are asking: what can companies do to survive?

According to the Ministry of Commerce, restaurant and retail sales exceeded 1 trillion CNY during the 2019 Spring Festival holiday. PwC China estimates that this number could fall by 50-70% in 2020. The restaurant sector has been hit especially hard. 94% of restaurant companies surveyed by the China Cuisine Association reported a 70% or more decline in revenue during the 2020 holiday period compared to 2019, with 93% closing some or all of their shops. Covid-19 control measures restricted logistics, as well as the movement and employment of staff. The entire food industry is facing enormous challenges.

With the help of exceptional efforts from companies and support from the government, most agricultural product wholesale markets and supermarkets resumed normal operations after the holiday. Farmers, truck drivers, supermarket staff and food delivery drivers are all playing essential roles to support measures to control the Coronavirus. Many have heroically volunteered to provide food and shipping services for the most severely affected areas to ensure that people can eat three meals per day.

With most people avoiding restaurants and other public spaces, consumers are now preparing most of their meals at home. Supermarkets, hypermarkets and fresh grocery shops have been supplying even more food than usual. Online ordering and delivery was already popular for restaurant food and beverages, but now consumers are staying home and using ordering and delivery apps to buy an unprecedented amount of groceries. During the first two weeks of February, e-commerce platforms showed significant year-on-year increases in average daily sales of fruits, vegetables, prepared food, snacks, nuts and alcoholic drinks.

This article will look at the key challenges faced by the food industry, suggest some measures that companies can take towards overcoming those challenges, and share some examples of actions already taken.

Contact us

Samie Wan

China Food Supply and Integrity Services Leader, PwC China

Tel: +[852] 2289 2019

Wenjing Cao

Partner, Food Supply and Integrity Services, PwC China

Tel: +[86] (10) 6533 7026

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