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A radical change

The pandemic has created new business opportunities, ranging from online grocery deliveries to meal kits to ghost kitchens, where  grocery retailers prep and deliver complete meals.  | Getty Images

COVID-19 has changed how people eat and shop for food, and there could be more change to come.

Dr. Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University, said food has been a complicated and complex issue during the pandemic.

People hoarded some foods, turned to buying others online and decided to grow their own. They learned to make bread. They learned how quickly food could run out. They learned that blowing out candles on a birthday cake wasn’t exactly safe.

Charlebois said people are still nervous about the virus.

“Forty-eight percent of Canadians are just waiting it out,” he said to an online bison conference in December. “They have changed their behaviour. They’re not going to the grocery store as often.”

They’re not going to restaurants at all, in many cases, either because provincial restrictions mean they can’t or they’re just too afraid.

“This fear is absolutely real for many, many Canadians,” Charlebois said.

But people need to eat.

Working from home has allowed many to save money on costs, such as commuting, and this is likely to continue. Charlebois said 23 percent of employers surveyed said they were thinking of allowing staff to work at home the majority of the time.

An interesting result of this has been the move toward meal kits and the blurring of the line between food service and retail.

The meal kit market was worth about $5 million 10 years ago and is now worth about $350 million, he said.

Various retailers are opening so-called ghost kitchens where they put together full meals and deliver them to homes.

Loblaw, through its PC Chef, does the same and can recreate meals from restaurants.

“Loblaw is no longer a grocer. It is a food broker,” Charlebois said. “That’s what COVID is doing, so no matter what you do in the supply chain you can redefine your business.”

On the other side of the equation, many restaurants are now retailing.

“Rules that did exist before COVID no longer apply, which is pretty exciting when you think about it,” he said.

Farmers are able to participate in the shift through direct sales or farmers’ markets. One of the lab’s surveys found that nearly five percent of Canadians had bought from a farmer directly in the last six months.

In Quebec, some producers are working together to sell direct to consumers. For example, cheese makers and meat processors are offering packages of their products.

Online sales have moved more into perishable food items from the non-perishable.

In the last six months, 16.5 percent of Canadians bought meat products online.

“I never would have thought a year ago that 16.5 percent of Canadians would have bought meat on line. Ever,” Charlebois said. “Whether or not it’s going to stick I don’t know.”

Retailers are investing billions into better ecommerce systems, however, and that indicates that online groceries are here to stay.

All this points to the supply chain that took a hit early on in the pandemic when consumers were faced with empty shelves. The entire system is re-evaluating how it operates, he said.

“Global supply chains are actually quite vulnerable and there will be more momentum to address this issue,” Charlebois said.

He expects supply chains to become more democratized because everyone wants access to consumers.

“COVID is actually bringing you an opportunity to control a little bit more and rethink your entire supply chain,” he said.

Finally, he said retailers are dropping products that don’t perform well. The average store carries 35,000 to 39,000 SKUs (stock keeping units).

“My guess is that the number of food products carried by the average grocery store will probably be reduced by 20 to 25 percent over the next couple years,” he said.

Ecommerce means the Canadian market is “over-stored” as well and about 350 grocery stores are expected to close in the next few years.

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