GLADSTONE, MO. — The loss of a job frequently means a cutback on the food budget in the household affected, and more US households are facing such a situation now. As the coronavirus (COVID-19) pandemic struck the US economy, more than 22 million people filed for unemployment in the United States in the four-week period ended April 11, according to the US Department of Labor.
“People are running into that brick wall of budgetary constraints,” said Susan Schwallie, executive director of food and beverage consumption for the NPD Group, a market research and consumer insights company, in an April 17 webinar organized by the Center for Food Integrity, Gladstone.
People are using leftovers more, she said. They are avoiding food waste, which means an emphasis on frozen foods and shelf-stable foods. They are relying on staples. People either are making larger dishes to make sure they have enough leftovers, or they are more careful about how much food they make in order to avoid food waste.
Kevin Ryan, PhD, founder of Malachite Strategy and Research, a consulting firm that focuses on consumer packaged goods and foodservice, also spoke in the webinar.
He acknowledged people hurting financially will make value-driven purchase decisions. He added a bifurcation will exist because other people will be more affluent and have money to spend on food.
“I’m guessing we’re going to see more personalized nutrition, almost like Blue Apron 2.0,” Dr. Ryan said. “What is that going to look like?”
People have cut back on the number of their visits to grocery stores, he said. They want to avoid contact with other people and risk getting COVID-19. Instead of visiting four or five stores, they now look for a “one-stop shop.” Such a trend could be an opportunity for private label, Dr. Ryan said.
“If Walmart or Target plays their cards right, I think they could push their private label even more,” he said.
Restaurants continue to hurt financially since they may offer only delivery or carryout. Ms. Schwallie said weekly transactions at US restaurants were down 43% for the week ended April 10.
Dr. Ryan said some of the restaurant businesses, especially the smaller ones, will not survive.
“I wonder if six months from now, you’re going to see a number of restaurant groups, maybe even CPG (companies), that start gobbling up these smaller restaurants to do ghost kitchen-type production of meal kits,” he said.
Recovery for the restaurant industry and the US economy in general could take a while.
“This recovery is definitely going to occur in fits and starts,” Ms. Schwallie said. “It will be regional across the country. It will vary by categories. It will vary between what’s going on in grocery retail vs. foodservice. I expect to see the demand for in-home staples to continue because of the economic reality.”
If restaurants begin offering in-restaurant dining again, the number of COVID-19 cases potentially could increase enough to cause another lockdown, she said.
Dr. Ryan said the recovery might take over a year.
“I honestly think we’re going to be playing whack-a-mole with (COVID-19) for at least a year and half,” he said.