Covid-19 And The Impact On The Food Industry



It is an undeniable fact that the COVID-19 pandemic has had severe reverberations in almost every industry in today’s world. Although it has been going on for close to 15 months now, the pandemic is nowhere near coming to an end, still raging strong in India in waves. Due to this, the food industry has undergone some drastic changes in the last year, most of which have deeply impacted most players in the industry. This article takes a look at the impacts that the COVID-19 pandemic has had on the food industry, and how Himalayan Natives has tackled these issues to emerge as a top FMCG player.

Supply Chain & Logistics

Food supply chains (or any supply chains for that matter) are an intrinsically interconnected system that relies on every single gear in the machine to operate smoothly. The pandemic has put constraints on nearly every piece of this machine, starting from the source to the last mile of the journey. With most of the country’s states on immediate lockdown, movement between and within states was extremely restricted. This impacted the supply chain at every level, and also had major implications on other factors such as labor and product prices.

Typically, most players in the food industry have multiple sourcing partners and often from far-off states, all that rely on a smooth-flowing supply chain to ensure the timely manufacture and distribution of food products. This is especially true for the FMCG industry as they see a large movement of goods on a daily basis. When the pandemic initially hit and the central government imposed strict lockdowns, the entire flow of logistics in the country was severely crippled and many food brands saw their supply numbers dwindle with inconsistencies both in the timely availability of raw materials and shortages in labor. Additionally, courier services were deeply affected by the restrictions on movement, which impacted the last-mile delivery services for most companies and negatively affected their ability to fulfill orders.

How We Tackled This

Himalayan Natives was quick to navigate these problems and took several measures to ensure production was not inhibited:

1. We immediately moved to sourcing partners that were either local or in neighboring states in order to ensure we received our products on time and our production      continued smoothly.
2. We added multiple SKUs to our product range that were easier to procure and had longer shelf lives that would insure them against untimely movement of goods.
3. At a time when courier services were severely impacted by the lockdown restrictions, we modeled unique strategies, such as opening smaller delivery hubs in various cities to ensure last-mile deliveries were conducted in a timely manner to meet customer demand. As a food brand, this was our priority as a means of uplifting the community and growing as an industry leader.

Availability of Labor

The Indian food industry relies on seasonal workers for the bulk of its labor force. The lockdown restrictions posed several problems for workers who traveled across the country for labor jobs. Due to the lockdown and its implications, many companies abruptly halted production operations without clear communication to their workers and employees, and several of them began to cut the salaries/wages of workers given the sudden disruption in the flow of goods. Uncertainty regarding the availability of work in the future was another factor that negatively impacted the lives of workers.

How We Tackled This

At Himalayan Natives, we recognize that the pandemic has led to the rise of a lot of fear amongst workers and uncertainty regarding the future. To tackle this, we took certain steps:

• We made sure to clearly communicate with our workers that we would support them during these turbulent times and that their jobs were safe. Guaranteeing job security was a priority for Himalayan Natives because our workers have always been one of our most important assets and we did everything possible to ensure that the sudden disruption of the pandemic did not impact their ability to earn a living.
• We made provisions for stay for our out-of-state workers to ensure that their safety was not compromised due to travel and they were able to continue working in our facilities.

Health and Sanitation

The pandemic introduced a lot of fear amongst the general public around sanitation practices being used in manufacturing facilities for food companies. At every level, from the laborers working on the fields to workers in the manufacturing plants/factories to the traders and retailers handling last-mile stages of the food distribution system, the level of sanitation and health of workers has been a cause of concern during the pandemic. A lot of these processes require workers to work in close proximity and involve them physically handling food products at various stages of the manufacturing process. The pandemic has forced these industries to implement social distancing practices and heightened sanitation measures, which has reduced the efficiency of production.

How We Tackled This

However, Himalayan Natives did not see a dip in productivity despite these added safety concerns due to several measures we took:

• As a food business, maintaining sanitation is one of our top priorities, and therefore from the very beginning of the pandemic, sanitation measures such as mandatory masks and social distancing were strictly enforced in our production facilities.
• The entire operations team was under quarantine to avoid any outside contact, and this helped us reduce any health risks to our workers and ensure hygienic means of production. We provided all of our workers with health insurance and paid for their vaccinations to ensure their health and safety.
• The practice of wearing gloves and hairnets has always been enforced at our facilities, even before the pandemic, and these became an added layer of safety.
• Our entire production facility was and is sanitized every 4 hours on a daily basis, and there is an extremely limited entry/exit of non-essential personnel to reduce any risks.

Fear of the Unknown

A major effect of the onset of the pandemic was consumer panic - the sudden imposition of lockdowns and restrictions in movements prompted panicked buyers to stockpile essential commodities, which further deepened the gap between demand and supply. There were times during the initial 21-day lockdown when grocery stores saw empty shelves and an ever-increasing demand for food and hygiene products, with no guarantee of these commodities being restocked in a timely manner. Additionally, for many players in the industry, uncertainty about the future and how to navigate the completely unfamiliar situation of a pandemic was a large detriment to their operations. This truly was “Survival of the fittest”, and a test of the ability of industry players to innovate and grow despite the pandemic’s effects.

How We Tackled This

Not surprisingly, Himalayan Natives also faced these concerns at the very beginning. However, rather than giving in to fear and uncertainty, we immediately sprung into action to adjust our operations according to the new circumstances:

• The initial pandemic period saw a major gap between demand and supply of protective equipment such as masks and sanitizers. In an effort to bridge this gap, Himalayan Natives began the production of masks and sanitizers, which also greatly aided our operations as a supplementary business that supported our workers/employees and the community.
• The prompt addition of more SKUs also helped us gauge the market needs in terms of food supply to cater to consumer needs while adjusting for supply chain constraints.  This helped Himalayan Natives to grow our business at a time when many players had to close up shop.

The Shift Towards Digital

One of the biggest changes that India has seen in the past year and a half is the movement of retail activities to digitally adaptive platforms. With the constant worry of infection exposure in public places in the back of people’s minds, retail activities have seen a shift towards being conducted in a digital means - activities such as contactless payment, online food delivery, and scheduled grocery deliveries that almost completely eliminate any risk of contracting the virus. These activities have begun to define the norm of commercial enterprises, and in recent months have been a factor of differentiation between those who were left behind and those that adapted.

As of 2019, online retail accounted for less than 1% of total grocery sales in India. However, this has changed with the pandemic, and those companies that were able to adapt their retail activities and processes to digital means have been able to survive the worst of the effects on the food industry.

How We Tackled This

Making quick decisions such as almost completely shifting to an online platform and streamlining the transaction methods have led to our continued success despite the challenges posed by the pandemic:

• Initially, the Himalayan Natives website was purely an informational site, however we quickly updated it to serve as an ecommerce platform to facilitate easier transactions for our consumers.
• We also began operating on online marketplaces such as Big Basket, Amazon, Paytm, and others in order to ensure that the demand for food products was adequately met without negatively impacting sales numbers or safety protocols.
• During the last 15 months, Himalayan Natives sales in India have increased 500% digitally, helping us to establish ourselves as a formidable FMCG player in the food industry.

Conclusion

This pandemic has been a true testament to the resilience of people, healthcare infrastructure, supply chain efficiencies in every industry, and our society in general. While it has highlighted many problems in the daily operations of economic activities, it has also allowed many companies and industries to adapt, overcome and innovate in a way that paves the direction for how we operate in the future. Many industry players have used this opportunity to change the way they operate - shifting towards digital platforms, streamlining their supply chains to be more impregnable, and generally charting a new course for their future. Himalayan Natives is a company that has proven its ability to overcome any obstacles and is constantly preparing for ways to thrive in and give support to the industry that it is a part of. While this pandemic continues to rage on and affect all aspects of commercial living, Himalayan Natives strives to navigate these challenges successfully and build a better future.