Food and Beverage

 

National Beer Wholesalers Association  

Lester Jones, Chief Economist

Around the country, COVID-19 has let loose disproportionate impacts on local communities and their beer markets. In aggregate, the US beer market looks pretty much like it has in any other year, with slight declines in total volumes sold and continued long run declines in per capita consumption. However, the illusion of stability is far from the truth.  

Year-to-date June 2020, draft beer (beer keg) volumes are down over 44 percent from the same period one year ago. 

Hidden beneath the stability in the aggregate data are dramatic changes in where, what, and how consumers purchase beer. Stay at home orders and remote work has left many urban beer markets deserted with tens of thousands of bars, taverns, event venues, and restaurants empty and on the verge of bankruptcy.  

For beer distributors supporting these urban markets, this represents the loss of tens of thousands of key accounts that move large volumes of product that over-index in draft (keg) beer. On the other hand, suburban beer distributors have enjoyed growing volumes as more consumers purchase from grocery stores and other off premise beer retailers that over index in packaged bottle and can beer.  

The disproportionate impacts continue into the beer retail landscape as many chain-owned retailers have fared better relative to independent retailers as consumer limit the duration and frequency of shopping trips.  

 

FMI – the Food Industry Association  

Andy Harig, Vice President – Tax, Trade, Sustainability & Policy Development

FMI’s members represent the full breadth of the food manufacturing, wholesale, and retail industries.  Nothing has ever tested them like COVID-19. 

Coronavirus-related restrictions forced restaurants to significantly alter, and in some cases cease, their operations.  This placed unprecedented stress on the U.S. food and consumer goods supply and posed challenges that led the entire supply chain to innovate at a speed unheard of under normal conditions. Food manufacturers and retailers were essential to keeping families fed and supplied with products to run their households. 

The pandemic brought technology innovations like online sales, home delivery and “click-and-collect” options.  Online sales increases by retailers exceeded an average of 300% in the first months of the pandemic, according to FMI research.  In October of 2020, online purchases accounted for an incredible 37.2% of shopping spend (as a percentage of total grocery spending), up from only 8% in July (FMI U.S. Grocery Shopper Trends Tracker, Oct. 1-9, 2020).  This growth was made possible by significant investments in online resources brought into service at breakneck speed. The industry expects online sales to remain a strong part of overall grocery spend.  

Consumer spending up 25% from February to March. Most food retailers (61%) said the local and national economies had positive impacts on their businesses, even if the new dynamics stretched their capabilities like never before. 

The combination of increased consumer demand, technology investments and absences related to quarantines, childcare needs and illness led to a significant expansion of the industry’s workforce.  This included store-level associates like checkers, online order fulfillment personnel and tech positions.  Members of the industry supported new and existing employees with hundreds of millions of dollars in bonuses, increased pay, time off, PPE and significant investments in training and education.   

FMI member companies remain dedicated to protecting their associates, customers, and public health and took several steps to do so. These include:  

  • Installing plexiglass protective barriers at check-out stands (when possible)  
  • Producing signage and other reminders of social distancing requirements 
  • Providing personal protective equipment (PPE) 
  • Spending thousands of hours on CDC-recommended cleaning and sanitization with EPA-approved disinfectants 

These efforts are consistent with, and often in addition to local, state, and federal guidance that evolved constantly. Expenses associated with these efforts are likely to continue even after the pandemic is quelled. 

Several COVID-19 vaccines are now ready.  As the process of inoculating citizens begins, the industry is preparing to continue our role as a health and well-being destination and to play a role in offering COVID-19 vaccines through our store pharmacies.  Even after the challenges of keeping shelves stocked and Americans fed over the past year, this may be our most important mission. 

These unprecedented times have tested supply chains, processes and relationships built over decades; but the U.S. food system has proven to be incredibly resilient. FMI’s member companies are beginning 2021 more focused and efficient than ever before.