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    ReFED'S COVID-19 U.S. Food System Review

    From empty grocery store shelves to restaurant closures to new safety precautions and more, COVID-19 has created huge shifts in food access, food security, and food waste. And with job losses and unemployment numbers rising to historic levels, these shifts will continue far into the future and potentially result in permanent changes.

    To learn more about the impact of the pandemic on our food system, ReFED conducted a review of food businesses, food recovery organizations (FROs), and others. Our goal was to understand the changes occurring throughout the food system as a result of COVID-19, as well as what needs to be done to overcome pandemic-related barriers that have made it difficult to distribute excess food to the growing number who need it. 

    The review consisted of a qualitative survey (80+ respondents), supplemented with more than 20 individual or group meetings and stakeholder webinars. We also examined the media landscape for relevant coverage.

    The results provide overall themes, plus a deeper look at how specific food businesses, service providers, and others have adjusted their operations to address the crisis.

    (When sharing these results, please cite “ReFED’s COVID-19 U.S. Food System Review.” For media inquiries, please contact Melody Serafino at [email protected])

    FOOD SYSTEM FINDINGS

    Farms
    • Growers and producers are experiencing increased immediate and short-term waste because of restaurant and foodservice closures, cruise line and airline cancellations, etc. (in the millions of pounds for large farmers), which were the primary outlets for many current yields. This will be an ongoing challenge, as cows keep producing milk and produce that has already been planted continues to grow.
    • The sector is seeing a rise in e-commerce, as farmers and consumers look for alternative channels of distribution and access.
    • Farmworkers have been classified as “essential” due to their critical role in the supply chain, but many farms are experiencing labor shortages during peak planting season due to challenges with international travel and the risk of exposure to COVID-19, potentially leading to future food shortages in specific commodities. 
    Processors
    • Large, non-perishable brands are experiencing 2-3x demand from grocery retail clients, while also experiencing significant less demand from restaurant outlets.
    • Perishable supply chains are experiencing huge losses, some in the billions of dollars, due to losing restaurant and foodservice outlets.
    • Companies are experiencing disrupted operations and production due to social distancing measures.
    • Some, like breweries, are stopping or shifting production for emergency commodities such as hand sanitizer.
    • Upcyclers are experiencing input shortages if/when the processors stop or change production lines.
    Distributors
    • Distributors are housing large amounts of surplus due to cancelled orders.
    • Distributors that mainly served the food service industry are quickly trying to establish retail channels.
    Restaurants/Foodservice Companies
    • Restaurants and foodservice companies are experiencing one-time surpluses from shelter-in-place orders, where food is donated, preserved, or wasted.
    • Food businesses are shifting to delivery or take-out only models; although many are seeing drops in total production, waste amounts are varied or not yet known. Food waste increases with lower production volume.
    • Some food businesses are shifting to “community kitchen” models, serving or packaging meals for free or for donation to affected individuals and communities.
    • Restaurants and other businesses in many states have been ordered to close and may not be able to continue operations when they are allowed to re-open. Mass closures are considered likely.
    • The drop in restaurant dining is likely to eventually hamper demand for high-end and exotic products that consumers tend not to cook at home.
    Retailers
    • Grocery stores are experiencing demand surges, leading to a lower volume of immediate donations to partner food banks.
      • The volatility of retail sales will also make it difficult to forecast, likely leading to increased waste at retail over the coming months.
      • Grocers are exploring new purchasing and procurement routes, such as from foodservice companies or direct from the farm.
    • Online outlets (e-commerce delivery, meal kits, etc.) are experiencing drastic spikes in demand as consumers stay home.
    • Grocers are struggling to fulfill orders for curbside pick-up and delivery, largely due to labor constraints.
    Consumers
    • Hoarding could likely lead to increased waste at home, as consumers are outside of their regular routines and likely not managing the additional food well. In addition, residential food scraps will increase due to more frequent cooking at home (e.g. inedible parts, unconsumed leftovers).
    Food Donation Recipients 
    • Food banks and other donation recipients are seeing sporadic and drastic peaks in donations from closing businesses, but overall seeing a decline in consistent donations from food businesses facing significant increases in demand.
    • Inconsistency (e.g. peaks from restaurant closures) is a huge challenge, as food banks are struggling to retain staff and volunteers, provide storage and transportation needs, and meet huge increases in demand driven by rising unemployment and school closures.

    CHALLENGES IN ADAPTING TO COVID-19

    Our qualitative survey ranked challenges caused by COVID-19:

    Explanation of Terms:
    • Labor: Too few people for food preparation, sorting, packaging, transportation, etc.
    • Cold storage: Insufficient refrigerator capacity (e.g., warehouses, walk-ins, etc.)
    • Food Transport: Inability to move food to food banks and pantries (generally large-format) and/or deliver food to eaters (generally small-format)
    • Coordination: Lack of information on what should be done with surplus food, when, where, and by whom
    • Food Shortages: Insufficient supply of the right foods to meet demand (noting also that there is a surplus of certain “wrong” types of food, as is common)
    • Funding: Insufficient money to meet demand for food
    IMPLICATIONS ON FOOD SYSTEM FUNDING
    • The survey identified more than $19 million in funding needs just from those solutions providers that responded. The primary areas of need identified by these organizations include resources to enact new safety measures to protect against COVID-19 infection, hire more drivers, establish “rapid response” services, conduct direct distribution to those in need, and build new partnerships to facilitate their outreach.
    • Initial responses from capital providers indicate that they anticipate their 2020 funding to stay the same or increase and do not expect any reductions in allocating funding due to COVID-19.
    • Many funders have already provided additional  funding to existing organizations in their portfolio, as well as invested in new organizations doing COVID-19 response work.
    OTHER LEARNINGS
    • Balancing National and Local Solutions - Food systems are global by nature, but manifest very locally, especially in the last mile of distribution to consumers, whether through food businesses or food donation organizations. Support is needed to both improve efficiency in the global supply chain, but also hyper-locally to ensure distribution to end users, in many cases through community-based organizations. 
    • Matching Needs with Available Resources - We have seen similarities between most urgent needs and resources others have available (e.g. food surplus and food shortages, cold storage and transportation, etc.). Increased connectivity will help these needs and resources to be matched, both on a national and local level. 
    • Maintaining Labor within the Food System - Every sector is experiencing labor and volunteer shortages. It is imperative that labor remains in the food system, as much as operation measures allow, to ensure immediate distribution and long-term sustainability of supply chains. 
    • The Future Food System - While immediate needs require our full attention, as the food system moves toward a future beyond COVID-19, there is a need for purposeful and thoughtful reevaluation to build in resiliency for future potential crises. 
    REFED’S RESPONSE TO COVID-19
    • Food Recovery - Collecting and sharing food recovery resources on our website, including building out our Innovator Database with new recovery organizations.
    • Funding - Analyzing and consolidating high priority funding opportunities for capital providers.
    • Best Practices - Hosting discussions with food systems players on innovative and scalable pandemic-related best practices across the sector.
    • Communications - Proactively sharing resources, stories, and more through our outreach channels.
    • Future Food System Analysis - Collecting insights and learnings to help inform our perspective on a resilient food system for the future. 

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    Photo by Richard Burlton on Unsplash

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