The impact of COVID-19 on the food, supplement, and CPG industries can’t be understated, with changes in consumer behavior and disrupted supply chains. At-home consumption has gone up while out-of-home consumption has slowed to a standstill.
With mixed reports on how the industry is faring, we decided to reach out to our customer base – food and supplement manufacturers, brand owners, packaging companies, brokers and distributors, and retailers – to gain a clearer picture.
We Surveyed Customers to Understand COVID-19’s impact
For this study, TraceGains account executives and customer success representatives contacted TraceGains customers between March 16, 2020, and April 20, 2020, to determine how the pandemic has impacted their businesses. Marking March 11, the day the World Health Organization (WHO) declared the coronavirus outbreak a pandemic, as the critical date after which significant lifestyle changes occurred.
60% of respondents’ businesses are performing better due to the outbreak.
13% of respondents said COVID-19 is harming their business.
27% reported no measurable impact on their operations.
100% of dietary supplements respondents are experiencing a positive business impact.
90% of respondents experiencing a negative business impact, serve restaurants, schools, and other foodservice businesses.
80% of respondents experiencing a positive impact directly or indirectly serve grocery and retail businesses.
The Impact of COVID-19
At least one company reported both good and bad news. While the massive surge in orders is exciting, higher demand has placed tremendous strain on plant operations. The additional ingredients required to meet increased demand can be difficult to source.
Dietary supplements manufacturers have seen soaring demand over the last four to six weeks. It’s not surprising given a recent report by Tastewise, which found that “consumers have been increasingly looking for food and beverage options that offer functional benefits during the past year, and interest has risen even more during the pandemic.”
Also, retail companies are thriving, with one TraceGains retail customer seeing 40% business growth over the last 30 days.
The businesses experiencing a negative impact from COVID-19 are primarily in food service to restaurants, schools, and other companies deemed non-essential during the crisis. These companies have had to make tough decisions like shutting down plants, laying off workers, and reducing employee pay and hours.
TraceGains Solutions to Navigate COVID-19
TraceGains has several solutions that are enabling companies to navigate the current threat. From mitigating supply chain disruption to protecting the business from risk, TraceGains can help companies to emerge from the pandemic stronger.
Faster Sourcing: Supplier Management now includes Market Hub, a powerful sourcing directory at no additional cost for unlimited users. Market Hub usage has accelerated during the current threat, with customers relying on it for alternative sourcing. With 30,000 supplier locations, 250,000 items, and more than 1.5 million supplier-provided documents to expedite qualification, Market Hub is not just for ingredients; you can source cleaning and sanitizing products, packaging, labels, etc.
Virtual Audits: With the FDA’s announcement to reduce remote inspections, virtual/desk audits are essential. Supplier Management’s automatic risk assessment can focus resources on your highest risks. The automated collection of documents and data through TraceGains Network lays the foundation for a virtual audit, and our Audit Management product can assist in many additional ways.
Risk Management: Shortages and disruptions open a vacuum for bad actors. Smart Alerts solution not only monitors global problems like fraud, adulteration, and import refusals; you can connect alerts directly to your items and ingredients to automate supply chain risk management.
Want to learn more? Please check out our infographic outlining solutions to help navigate COVID-19 here.