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Industry Insights: What does the future hold for food and drink after coronavirus?

In part two of this virtual roundtable discussion, our panel of food and drink experts look to the future, exploring how the sector will emerge from coronavirus and what lasting changes might result from the current crisis.

Sharing their insights are: John Sheaves, chief executive of Taste of the West; award-winning cheesemaker Mary Quicke, managing director of Quicke’s Traditional; Ruth Huxley, managing director of Cornwall Food & Drink and owner of the Great Cornish Food Store; John Farrand, managing director of the Guild of Fine Food; and Steve Ashworth, tax director at PKF Francis Clark and a passionate foodie.

Food and drink business leaders debate the impact of coronavirus
Clockwise from top left: John Sheaves, Taste of the West; Mary Quicke, Quicke’s Traditional; John Farrand, Guild of Fine Food; Ruth Huxley, Cornwall Food & Drink and the Great Cornish Food Store; Steve Ashworth, PKF Francis Clark

 

To read part one of the discussion, click here.

 

What will be the longer term legacy of coronavirus for the food and drink sector?

SA: We have hit the bottom of the curve and are starting to come out the other side, but it’s a steep climb. A lot of food related businesses are worried about when they will be able to reopen and how social distancing will still affect restaurants, pubs and hotels. There’s still a lot of uncertainty.

It’s going to be 12 months or more before things return to anything like normal for food and drink businesses – and the old normal won’t be the new normal. Businesses are going to have to look at how they interact with their customer base and think about whether ways of selling food are going to have to change. If we still have social distancing, a 12-cover restaurant isn’t going to be viable.

RH: The repercussions are going to be felt for a very long time. For starters, somehow we are going to have to pay for it.

This episode has brought out the very best and the very worst in people. I believe what goes around comes around, and the people who take a self-centred approach now will be out on a limb when the recovery comes. Cornwall is often described as a village, and we all need to be pulling together.

The marketplace isn’t going to suddenly return to normal when restrictions are eased

JF: Encouragingly, 95% of respondents to our Guild of Fine Food survey believe their business will survive the Covid-19 outbreak.

Word of mouth will help those businesses that are doing a good job and coming up with ideas or getting involved in projects to support their communities. I would love to think that this crisis will kick start our community spirit again.

JS: If we are going to continue with some kind of social distancing, as seems likely, it’s vital that the Government continues to support the food and drink sector. The marketplace isn’t going to suddenly return to normal when restrictions are eased. They will have to put more money in to support businesses through until 2021.

The Coronavirus Job Retention Scheme is working and we hope it will be extended. The business rates holiday is very welcome, but for a business with a £250,000 turnover, £10,000 off business rates is a drop in the ocean compared to the sales they would normally be getting in over the course of 12 months.

In the longer term, I think online is the new norm. During lockdown people have got used to working from home and online shopping, and they will be more open to doorstep deliveries in future. The industry needs to gear itself up to deliver that in a coordinated way.

 

Do you think we will change our eating and buying habits after coronavirus? Is there an opportunity for the sector to do things differently in future?

RH: We’re finding that people’s buying habits have changed. They are going much more for fresh, basic ingredients, because they are cooking at home, with a few more extravagant treats thrown in to keep spirits up. I don’t know if that will continue as life returns to normal, but I think we can assume that people aren’t going to revert automatically to their previous buying and travel habits.

I would like to think that people will use this time to reflect. I hope there will be some changes and that people will place a higher value on their food, and particularly local food production. A lot of things became very cheap, like flights and food, and we now have to question at what price that came. Do we want to replicate that or should we use this to reset and rethink what we value the most?

The opportunity is that people feel a closer relationship to food, farming and the landscape

JF: Many food and drink shops have had an enormous uplift in sales as a result of restaurants, bars and cafes being closed. People are treating themselves to premium food and drink to enjoy at home. I hope that continues but I do wonder whether they will cut back when there are inevitably redundancies and people start to feel the pinch.

Local food producers have made themselves more available direct to the consumer, in some cases cutting out the chain of wholesalers and retailers. That may be a trend that comes out of this, which is slightly worrying from a retail perspective.

If people are more considered about what they buy and see merit in supporting their community and local retailers, everyone in artisan food and drink will be a winner.

MQ: This is potentially going to go on for a long time, so I think people will pick up the habit of doing more online shopping. People may not be quite so willing to travel until we get a vaccine. And people may well feel poorer, so will they be going out for nice meals in restaurants? Groups of friends have started holding virtual dinner parties, cooking the same food in their own homes, and maybe that trend will continue.

What may also come out of this is that people are more appreciative of local food and drink. Will this be a turning point that makes us think more about our responsibility for the planet in our travel and food choices? The opportunity is that people feel a closer relationship to food, farming and the landscape – that’s what we’re hoping for.

JS: The big unknown is the food service trade because it relies on a degree of social interaction. For producers with secure supply chains into the major retailers, I think it will gradually get back to normal. There may be more innovation in terms of digital marketing to go direct to the consumer. Businesses are going to have to start looking at how they get to their marketplace. For example, we may see more dairy farmers vending fresh milk directly to local consumers.

 

How will this crisis impact on domestic supply and exports of food and drink?

JF: I’m hoping that people will reassess where our food comes from and choose to support seasonal, locally produced food and the shops that sell it. As a nation, we have decided we want to eat things all year round, so we import a lot of food we wouldn’t need to if we put more emphasis on seasonality. Perhaps if we ate things in season and supported our British farmers, we wouldn’t be unnecessarily moving food around the planet. But we have a big population to feed, so it’s a really big question to grapple with.

JS: To be able to maintain and build on our food and drink exporting is going to be incredibly difficult for the next 12 months or so. There’s doubt about the resilience of international supply chains because of Covid. One of the things we need to do as an industry in the South West is to build more resilient local supply chains in future.

We need to keep the money flowing through to local producers

MQ: While the pressure is on to feed the population, imported foods are probably less important, so our exports are much smaller at the moment.

RH: I think there will be changes. In Cornwall there are moves towards making sure the public sector is buying more local produce going forward, and that the buying process includes different criteria for evaluation. I think most countries will also put a different emphasis on their domestic food production. The local supply chain can adapt in a positive way – it has done in the past and it can again.

SA: We need to keep the money flowing through to local producers. If there isn’t an income stream for them now, will they be there for us on the other side of this crisis?

Any questions?

If you would like to discuss how coronavirus is affecting your business, please email Steve Ashworth: steve.ashworth@pkf-francisclark.co.uk.

Coronavirus updates

You can also find expert advice and useful information on sources of support in our Coronavirus Updates hub.

Food & Drink sector – specialist support

We have a specialist food & drink sector team and are here to advise and support you and your business. We have produced a brochure outlining some of the ways in which we can help.

FEATURING: Steve Ashworth
Before joining the Bristol office of PKF Francis Clark in July 2019, Steve started his career at HMRC over 30 years ago and then spent… read more
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