With its rich agricultural history, and as home to some of the most skilled farmers in the country, Maricopa County is one of the nation’s top food producers. While Maricopa’s agriculture industry is valued at $1.95 billion per year according to the City of Phoenix, the coronavirus has caused rapid surges and declines in demand, impacting various sectors of the food and beverage industry.
Grocery stores have seen heightened demand, creating pressure to meet the growing needs of consumers confined to their homes. Food and beverage distributors have faced a different reality, with their customers — such as restaurants, hotels and cruise lines — sharply reducing their demands for goods. Each shift has created its own challenges and opportunities.
Grocery Stores
In addition to addressing concerns for the health and safety of employees and customers, grocery stores have adapted to a growing demand for online order fulfillment as more consumers opt to stay home and have food delivered. This has created new challenges, as some grocers have tried partnering with third-party delivery services who have been enmeshed in labor disputes and sometimes unable to make timely deliveries. Some grocers have explored hiring their own shoppers and deliverers, but these services add costs to already slim margins and create new business processes to be managed.
Distributors
Distributors have had a different experience during the pandemic, undergoing a sharp decline in demand for goods as hotels, restaurants and other large-scale venues closed. Some distributors have evolved their business models to supply retail grocers, but doing so necessitates establishing new processes and changing product packaging to be suitable to individual consumers. Also, like restaurant owners, distributors have had to ride the wave of restaurants closing, then opening partially, then opening fully, then closing partially — a pattern that may continue indefinitely.
Perhaps the most essential mindset for food and beverage businesses is to look to the future and aim for flexibility.
Katie Scardello is senior vice president of Global Commercial Banking for Bank of America
[See “Considerations for the Food & Beverage Industry amidst a Global Pandemic” for an expanded discussion.]
