KANSAS CITY — The coronavirus (COVID-19) has resulted in historic stock market plunges and volatility, unprecedented “stay-at-home” directives, and food manufacturing and logistics challenges as demand shifts from foodservice to at-home meals, and it’s still too soon to tell what the full impact will be.
The pandemic also has brought out the best and, unfortunately, the worst in people. The best includes many reports of people helping people, businesses working together that may not have before amid demand shifts, and companies paying employees during shutdowns and giving raises to those working extra. The worst includes a new round of scams and, to a lesser extent, panic buying when food and home supplies are adequate and grocery stores are open.
A consumer run on many food staples and toilet paper (collectively dubbed “the toilet paper effect”) struck grocery stores and other food outlets. Ironically perhaps, the greatest panic buying occurred prior to most of the “stay-at-home” directives, which already have begun to subside in some areas while others remain in full force as states varied in their orders.
Perhaps even more ironically, there isn’t and never was going to be (as part of this pandemic) a shortage of food in the United States. Consumers themselves created the shortages as food manufacturers struggled to keep up with deliveries and grocery stores fought a losing battle to restock shelves. Related to the panic buying was the never-before-seen sudden and massive shift from eating away from home due to the closings of schools, restaurants (except for carryout and drive-thru), bars and travel restrictions to at-home eating that challenged food manufacturers and logistics. The food was there but it wasn’t necessarily packaged for or directed to grocery stores.
The key food staples that were snatched up included pasta, pasta sauces, canned tomatoes, rice, dry beans, potatoes, bread, flour, sugar, eggs, milk, yogurt, soup and peanut butter, as well as chips and applies.
Orange juice, which has fought a losing demand battle since the low-carb craze several years ago, also flew out of grocery coolers because of its healthy vitamin C content, which doesn’t necessarily provide any benefit in fighting COVID-19. ICE Futures US orange juice futures shot up nearly 30% since March 11, although prices still were below year-ago levels.
Prices of potatoes sold to retailers rose 25% to 35% in a week as shipments were unable to keep up with demand. Fresh apple sales were reported to be up 40%, but price increases were limited because of a large Washington crop last year. Flour millers and bread bakers quickly responded to empty store shelves by boosting production, while adjustments for several of the other items involved shifting production or delivery from foodservice to retail when possible. Egg prices more than doubled.
Anecdotally, there was a change in food stocks on grocery shelves already last week. One Kansas City area grocery store was missing only flour, bleach, hand sanitizers and toilet paper. Other food items that had been lacking (listed above) only a week earlier were available, but generally the lower-priced house brands were gone while some higher-priced name brands still were available. Eggs were amply stocked, but at $2.59 a dozen compared with 99¢ a dozen a couple weeks earlier. Business was steady and customers were walking out with several bags rather than just one or two items.
It’s hard to forecast what lies ahead as the world is in totally uncharted territory (i.e. the stock market rose sharply after initial jobless claims for the week ended March 21 were an astounding 3.28 million, 4.7 times the prior record set in 1982).
“Asian markets show how quickly e-commerce can stabilize after initial spikes” as COVID-19 cases declined in China, Hong Kong and South Korea, Euromonitor International said in its “Coronavirus: Weekly Price and Availability Insights” for the Feb. 24 to March 15 period based on nearly a million daily data points from Via, its global e-commerce product and price monitoring platform, and other data collectors. The report suggested consumers would increase spending in physical stores with e-commerce still significant as the situation improves.
Many expect the hoarding, or increased buying at retail, to largely offset reduced foodservice business, and both will balance out once the pandemic fears subside. Some forecast a longer-term dent in food (and certain nonfood) items due to lost jobs and reduced wealth as the result of COVID-19. Others, however, see possible increases as people hit restaurants with pent-up eating out demand while extra sacks of sugar and flour sit on pantry shelves.
One thing is sure, there is enough food now and there will be afterwards.