Looks like covid-19 may have unintentionally launched this company and many other agro farms.
This fascinating article on how covid supply disruptions is directly influencing pricing and shortages and labor and how vertical farming smooths the whole process
This would explain why billions of investment capital are pouring into the sector.
GNPG right place right time
Most of agribusiness is already in a state of flux. COVID-19 is dramatically impacting key areas of the value chain in unimaginable ways.
With many aspects of agribusiness already in a state of flux, COVID-19 is dramatically impacting key areas of the value chain in unimaginable ways. Extraordinary changes in consumer behavior and unforeseen labor complications compound pressures on business leaders to keep the organization operating amid one of the most chaotic business environments in history.
How organizations pivot to address these unprecedented conditions will significantly shape what comes next. What changes will have lasting power? How can businesses be ready for the new normal that emerges post-crisis?
Off-the-shelf phenomena highlight consumer influence
A look at the shelves at any grocer starkly signals the marked fluctuations in buying behavior — of produce and meat in particular — that could be profound post-pandemic. These trends have the potential to accelerate food transformation, as well as shorten the supply chain to meet radically different consumer demand.
The numbers show just how real that potential is. According to IRI, fresh fruit and vegetables saw double-digit growth since the pandemic intensified. Sales for frozen fruits and vegetables increased more than 100% and shelf-stable vegetables more than 200%, as consumer interest in stocking up materialized.
Amid an incredibly fluid situation, COVID-19 is significantly disrupting other areas of the food chain. Dairy farmers with milk bound for processing plants and foodservice customers are asked to dump millions of gallons of milk as grocers struggle to keep shelves stocked. According to Nielsen data, milk sales increased nearly 53% for the week ended 21 March 2020, butter sales increased more than 127% and cheese was up more than 84%, compared to the same period a year earlier.
Fresh seafood consumption declined markedly as restaurants closed while demand for frozen and processed seafood products grew 70%. Meat consumption and buying behavior likewise saw dramatic changes as families moved from eating out to eating at home.
These new behaviors resulted in noticeable shifts in channel to market. Consumer demand for fresh, packaged beef at grocers for preparing meals at home, or for freezing, means a leading meat processor who supplies beef patties for the fast food industry must quickly shift operations to meet a different kind of market demand.
The ripple effect of changing consumer trends illustrates another supply and demand dilemma. A food processor of potatoes for french fries experiences a rapid drop in demand with restaurant closures. Now the company must quickly extend warehousing for their potatoes. Another fast food restaurant offering a popular lemonade suddenly has decreased demand for lemons. The lemon grower must find a solution for its surplus lemon supply.
A shift in consumer purchasing preferences toward cost and availability calls into question the mid-term demands for premium product categories such as alternative proteins and organic products. As massive increases in online grocery shopping and delivery continue, companies experience jumps in new customers that may or may not continue post-crisis.
From produce, to meat, comfort foods, alternative proteins and premium items, what food preferences will have staying power will hugely influence what products are on the shelf in the future. It remains to be seen how and at what rate these shifts will alter the food growing, producing, storing and delivery system. The ability to capture and utilize the right data to monitor product trends and their significance for a business, along with supply chain flexibility, are paramount to weathering fluid market conditions.
Working out labor issues
Virus protection. Social distancing. Travel restrictions. Rigorous cleaning. Employee illness. Unimaginable circumstances have cascaded for agribusinesses and hastened the need for more comprehensive risk assessment and contingency planning to safeguard employee health and safety and ensure a stable, proficient workforce.
Consider the following scenarios:
Beef, pork and poultry plants feed millions through a very manual, labor-intensive operation. As illness keeps workers off the job, production and output are jeopardized with delays and/or closings affecting millions of people reliant on a protein staple during a pandemic.
Warehouse workers accustomed to close interactions with each other and truckers must now social distance as they handle goods. Operations must be adjusted to accommodate safety requirements while maintaining efficiencies in this critical link of the supply chain.
Following the lead of employees in other industries, agribusiness workers consider walk-outs and demand clearer safety protocols and pay adjustments as they work with heightened health risks.
Cross-border travel constraints compounded by inter- and intrastate travel restrictions, put access to labor for growers at great risk. Social distancing in the fields has potential to significantly slow harvests for another highly skilled job function.
As unemployment hits historic levels, workers may be willing to step in to fill critical labor gaps, even if it means traveling to another state and learning new skills.
Can careful planning prevent any of these situations from happening? No. But what-if contingency planning in all areas of the operation can help businesses be better prepared for the unexpected. A review of technology and R&D investments may also be warranted as risk mitigation can often reside in automation solutions. Data analysis of unemployment hot spots could guide decisions about temporary, stop-gap workforce solutions where the need is greatest across the industry.
Resiliency matters now more than ever
COVID-19 is proving that agility and resiliency are essential to not only weathering the immediate storm but emerging from it in a better position to meet new consumer needs. Strategies that an organization uses to move through this acute reactionary environment can be built upon post-crisis to maintain momentum. As stability increases, opportunities to recover and safeguard the business for what’s next will abound. From supply chain, to contingency planning for workforce safety and security, product adjustment and risk management, increasing resiliency can help agribusinesses deal with the unknown and best react to consumer preferences.
What is changing the most for you? How can you take what you’re doing now to prepare for your greatest unknown?
The views reflected in this article are those of the author and do not necessarily reflect the views of Ernst & Young LLP or other members of the global EY organization.
Summary
Extraordinary changes in consumer behavior and unforeseen labor complications compound pressures on business leaders to keep the organization operating amid one of the most chaotic business environments in history.
How organizations pivot to address these unprecedented conditions will significantly shape what comes next. What changes will have lasting power? How can businesses be ready for the new normal that emerges post-crisis?
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