Demand for fresh and frozen food
– Over the two weeks pre-lockdown: volumes were well above Christmas levels. This created significant pressure on cold chain staffing and equipment levels, but businesses did an excellent job of adapting and worked flat out to meet the increased demand.
– This week, we have already seen the picture changing. Demand from food service has gone down significantly, and retail demand has calmed back to more usual levels too.
– The next few weeks: although there are many unknowns that make accurate predictions hard, the expectation is a slowing down of demand for fresh and frozen food through the cold chain. Food service demand is expected to basically disappear temporarily, retailers are expected to simplify the lines they stock and their supply chains. In the public sector, while hospitals’ demand is expected to increase, demand from other sectors such as schools will go down significantly.
The major short-terms challenges for cold chain businesses:
– We expect continued inflow into storage from food growers, processers and imports, but demand from customers will be lower. As a consequence, cold stores will get full.
– Navigating through this period of reduced customer demand, supporting employees as much as possible while keeping businesses viable and in a position to scale back up at the appropriate moment. Some businesses will be able to repurpose their fleets and employees for last mile delivery, but opportunities to do this will be limited.
But the sector will bounce back after this exceptional and temporary period of challenge – all the fundamentals that made the cold chain so strong in 2019 are still there.
Important questions on which the Cold Chain Federation is currently seeking clarity from Government:
– Can businesses rotate furloughed workers? To help treat employees fairly and also to keep operations running if people working need time off for sickness or to self-isolate.
– The business rates holiday and grants Government have announced for leisure, retail and food service businesses don’t apply for the rest of the food chain. Cold Chain Federation is asking Government to apply these measures to food logistics too.
New Government measures and advice for cold chain firms to note – see www.coldchainfederation.org.uk for more information:
– Government has extended driver hours, place from 23rd March to 21st April
– HGV, car and van MOTs are to be extended
– Public Health England says Covid 19 is highly unlikely to be transmitted via food and risk of transmission of the virus via packaging is very low.
– Government says existing food premises’ good hygiene practice are sufficient at this time.
– Government’s advice on competition law is that co-operation will be tolerated for retailers and logistics businesses, for measures designed to help tackle coronavirus challenges.
Cold Chain Federation events
The Cold Chain AGM and lunch in May will be run as a virtual AGM, with the lunch postponed.
The Cold Chain Energy Summit on 18th June is likely to run as a virtual conference, we will make a firm announcement on this in the coming weeks.