May 27, 2020
The shockwaves COVID-19 sent through the food supply chain are well documented. While grocery store shelves were empty, farmers across the country dumped milk, destroyed produce and even euthanized hogs. While the details of each sector’s woes are uniquely complicated, the fact is the virus drastically changed the supply chain. Will those changes stay in place? Beth Ford, CEO of Land O’ Lakes recently shared her thoughts on food production moving forward.
“What's interesting is that we're all eating at home now and so, we certainly have seen our retail business change fairly dramatically,” she told the Washington Post. “Over the last month, as we've seen states open up again our food service orders at this point for the month are almost at 98 to 99% of our original plan, which means that the pipeline is starting to be refilled again against food service demand.”
While she admits it's unclear whether that’s true consumer driven demand or filling the pipeline for future restaurant openings, it’s still an encouraging statistic.
How will this pandemic change the future of food? Ford isn’t sure but said one thing is clear: right now, we’re back to the basics.
“There was a real focus on innovation on differentiation and offers at retail,” she said. “Now we’re having a hard time keeping up with all of the demand for our butter-based business.”
It will be interesting to see how quickly the focus returns to differentiated products, Ford said. No matter what, it’s unlikely a manufacturing platform shift to turn plants that produce food service products into plants that make retail products until the future path of COVID is more understood, she added.
“Is demand going to normalize? We have seen elevated demand for our butter products or cheese products or putting everything at a level that more matches Mother's Day, Thanksgiving and Christmas. Will that stay with us when food service opens back up?” she wondered. “Straight up the reality is to change a manufacturing platform at scale to meet it is not an inexpensive endeavor, and it takes a while to do that. So, you're not gonna see an immediate [or dramatic] shift.”