Market wipe8 December 2020
In this special report, John Munroe presents the latest studies from both WHO and GlobalData, charting the Covid-19 crisis and what kind of impact it has had on food systems, labour relations and markets across the globe. Plus, how sudden restrictions have drastically altered the behaviour and habits of consumers.
The Covid-19 pandemic has led to a dramatic loss of human life worldwide and presents an unprecedented challenge to public health, food systems and the world of work. The economic and social disruption caused by the pandemic is devastating: tens of millions of people are at risk of falling into extreme poverty, while the number of undernourished, currently estimated at nearly 690 million, could increase by up to 132 million by the end of the year.
Millions of enterprises face an existential threat. Nearly half of the world’s 3.3 billion global workforce are at risk of losing their livelihoods. Informal economy workers are particularly vulnerable because the majority lack social protection and access to quality healthcare, and have lost access to productive assets. Without the means of earning an income during lockdowns, many are unable to feed themselves and their families. For most, no income means no food, or, at best, less nutritious food.
The pandemic has been affecting the entire food system and has laid bare its fragility. Border closures, trade restrictions and confinement measures have been preventing farmers from accessing markets for both buying and selling goods, and agricultural workers from harvesting crops, thus disrupting domestic and international food supply chains and reducing access to healthy, safe and diverse diets. The pandemic has decimated jobs and placed millions of livelihoods at risk. As breadwinners lose jobs, fall ill and die, the food security and nutrition of millions of women and men are under threat, with those in lowincome countries – particularly the most marginalised populations, which includes small-scale farmers and indigenous peoples – being hardest hit.
Millions of agricultural workers – waged and selfemployed –regularly face high levels of working poverty, malnutrition and poor health, and suffer from a lack of safety and labour protection, as well as other types of abuse. With low and irregular incomes and a lack of social support, many of them are spurred to continue working, often in unsafe conditions, thus exposing themselves and their families to additional risks. Further, when experiencing income losses, they may resort to negative coping strategies, such as distress sale of assets, predatory loans or child labour. Migrant agricultural workers are particularly vulnerable because they face risks in their transport, working and living conditions, and struggle to access support measures put in place by governments. Guaranteeing the safety and health of all agri-food workers – from primary producers to those involved in food processing, transport and retail, including street food vendors – as well as better incomes and protection, will be critical to saving lives and protecting public health, people’s livelihoods and food security.
In the Covid-19 crisis, food security, public health and employment and labour issues – in particular workers’ health and safety – converge. Adhering to workplace safety and health practices and ensuring access to decent work and the protection of labour rights in all industries will be crucial in addressing the human dimension of the crisis. Immediate and purposeful action to save lives and livelihoods should include extending social protection towards universal health coverage and income support for those most affected. These include workers in the informal economy and in poorly protected and low-paid jobs, including youth, older workers and migrants.
Particular attention must be paid to the situation of women, who are over-represented in low-paid jobs and care roles. Different forms of support are key, including cash transfers, child allowances and healthy school meals, shelter and food relief initiatives, support for employment retention and recovery, and financial relief for businesses, including micro, small and medium-sized enterprises. In designing and implementing such measures it is essential that governments work closely with employers and workers.
The number of undernourished people, which could increase by up to another 132 million by the end of 2020.
Fear for humanity
Countries dealing with existing humanitarian crises or emergencies are particularly exposed to the effects of Covid-19. Responding swiftly to the pandemic, while ensuring that humanitarian and recovery assistance reaches those most in need, is critical. Now is the time for global solidarity and support, especially with the most vulnerable in our societies, and particularly in the emerging and developing world. Only together can we overcome the intertwined health and social and economic impacts of the pandemic, and prevent its escalation into a protracted humanitarian and food security catastrophe, with the potential loss of already achieved development gains.
We must recognise this opportunity to build back better, as noted in the UN’s policy brief, ‘The impact of Covid-19 on food security and nutrition’, issued in June. It shows that, as a global population, we are committed to pooling our expertise and experience to support countries in their crisis response measures and efforts to achieve the sustainable development goals. We need to develop long-term sustainable strategies to address the challenges facing the health and agri-food sectors. Priority should be given to addressing underlying food security and malnutrition challenges, tackling rural poverty – in particular, through more and better jobs in the rural economy – extending social protection to all, facilitating safe migration pathways and promoting the formalisation of the informal economy. The world must rethink the future of its environment and tackle climate change and environmental degradation with ambition and urgency. Only then can it protect the health, livelihoods, food security and nutrition of all people, and ensure that the ‘new normal’ is a better one.
Meanwhile, as the UK faces a ‘second wave’ of the virus, there are rising concerns around how Covid-19 is impacting the UK’s coffee and tea shops – with big names such as Costa and Pret-a-Manger announcing plans to cut more than 1,500 and 3,000 jobs, respectively. The sector has shrunk, according to GllobalData, from £6.6bn in 2019 to a Covid-19- adjusted forecast of £5.4bn by the end of 2020 – equating to a shocking 18% loss.
Lucy Ambler, consumer analyst at GlobalData, said, “The UK Government’s lockdown, and the announcements to ‘work from home if you can’, will produce further blows to an already struggling sector that is lacking the usual ‘lunchtime rush’ from office workers.
“GlobalData’s Consumer Intelligence Centre’s latest figures note a 52% reduction in the number of people eating out for their midday meal compared to pre- Covid. As travel restrictions continue to tighten across the country, consumers are adopting increasingly cautious behaviour in traditionally busy areas, where many coffee/tea shops are located. The even tighter lockdown restrictions may increase this downward trend.”
Simple but effective steps, such as better advertising, additional safety measures and implementing technological innovations like apps that allow consumers to order from their tables, may increase footfall by reassuring safety. With a worsening economic situation on the horizon, businesses also need to take an immediate, active response to encourage customers to return after the latest lockdown has abated.
Ambler continued: “Bolting down the hatches and hoping to ride out the storm is no longer an attractive option, and actively implementing value-focused approaches is imperative – particularly now the ‘Eat out to help out’ scheme has come to a close. Pret-a- Manger’s promising £20/month subscription service, for example, has seen a positive response thus far – as has Starbucks’s revamped ‘star’ reward system, which is advertised as giving better value for money. Reward schemes are nothing new, but it just might be the ticket that keeps the trade coming amid stricter lockdowns.”
While supporting local businesses has become more important for many people since Covid-19 emerged, it is not looking like the coffee and tea shop sector forecasts will pick up in the coming months. GlobalData reports the arrival of the ‘new normal’, wherein one in five are aiming to continue to work from home, while 52% aspire to cook more at home.” Ambler concluded with a further warning for the hot beverages sector, “The pandemic’s widespread knock-on effects are evolving long-term consumer behaviour, and so, coffee culture as we know it must meet these changing preferences – whether this is by tapping into online delivery services or at-home subscriptions. Either way, it appears the UK’s ‘café culture’ evolution out of the shops and into our homes is here to stay.”
The reduction in the number of people eating out for their midday meal compared to pre- Covid times.
Safety of childhood
While coffee sales are down, the breakfast cereals category is expected to grow in 2020, as volumes and values exceeded the predicted growth for the year. Annual breakfast cereal sales valued $10.8bn in the US in 2019, and this was previously expected to increase to $10.9bn in 2020, GlobalData has reported. But, following Covid-19-related disruptions, the projected figure for 2020 is now closer to $12.1bn, an increase of 12%. By comparison, volumes are expected to grow by 5%. Increased time at home, concerns over health and longing for childhood certainties are behind the changes in consumer behaviour, according to the analytics company.
Ryan Whittaker, consumer analyst at GlobalData, said, “With so many people now working from home instead of commuting, many consumers are no longer eating on-the-go or foodservice breakfasts. Instead, many consumers are falling back on a mixture of comforting and healthier options at home. Anxieties caused by uncertainty around the pandemic have produced a tendency to fall back on familiar branded products, especially ones that remind the consumer of their childhood.
“To many US consumers, breakfast cereals offer a way for them to impose order and familiarity on the day. For many, this can mean a moment of indulgence, revisiting a favourite from their childhood, or opting for a healthier option. The reduced demand for out-of-home consumption, reduced need to commute and heightened focus on health has convinced Americans to return to breakfast cereals in the morning.”
GlobalData’s Covid-19 recovery tracker consumer survey, dated 21 September 2020, found that 65% of US consumers said that how familiar, trustworthy or risk-free a product feels always or often influences their product choice.
Whittaker added, “The US breakfast cereal category is well positioned to benefit during the pandemic. Consumers want to purchase specialised items to aid their immune systems, to treat themselves or to recapture a sense of familiarity, and these products easily become staples for the daily routine during lockdown.”