Farmer's Weekly (South Africa)
Impact of COVID-19 on SA’s food system and consumer behaviour
As the coronavirus disease (COVID-19) pandemic gears up to reveal its full strength in South Africa and around the world, life as we know it has already changed dramatically.
Among these changes is people’s consumption behaviour, mainly due to the continuing lockdowns in different countries negatively affecting people’s incomes. As such, consumers are starting to feel the economic effect, and are dramatically reducing discretionary spending in response.
Agricultural economists are thus posing questions about how the current pandemic will affect consumer behaviour, agriculture and the broader food system in the long run. Essentially, the crucial question is that when a vaccine and effective treatments are found, which changes in consumer, retail, food processing, and farming behaviour will persist post-pandemic? Changes in the agriculture value chain will be largely influenced in the consumption phase, which relates back to the production phase.
Addressing consumption, it is clear that consumer habits are adapting in real-time to the new environment and circumstances brought about by COVID-19. A recent global survey conducted by McKinsey & Company, which included South Africa, indicated that many consumers globally expected their incomes to decrease as a result of shutdowns currently in place in their respective countries. In South Africa, more than 60% of consumers expected decreased income, according to this survey.
The survey further indicated that the majority of consumers in South Africa (similar to most Australian, European, Korean, Japanese and Canadian consumers), were expecting to curb their spending going forward. They will only be spending on basic items such as essential groceries, household supplies, and personal-care items. Without a doubt, this contraction in spending power will affect the type and quantity of food products demanded by consumers.
All this should create an awareness for input providers (such as for seeds, fertilisers, mechanisation services, and livestock feed), as well as farmers, food processors and retailers, that pandemics such as this can dramatically change the food production system, disrupt supply chains, and change consumption trends. Such a realisation should lead to the development of contingency plans for operational disruptions in the ‘route’ to markets and supply chains.
While at a production level there is overwhelming evidence that disruptions have been minimal to non-existent since the enforcement of lockdown regulations, it is further up the supply chain where disruptions are being experienced. Therefore, strategies need to be prioritised that will increase resilience in the supply chain.
CREATING OPPORTUNITIES
Furthermore, this pandemic is providing opportunities for all agricultural value chain role players to stimulate the production, marketing, and consumption of nutritious and safe foods in line with new consumer trends, as poor diets are the leading cause of poor immunity in many people around the world.
Data also indicates that there will be a need for farmers post-COVID-19 to shift production to alternative protein categories, as the meat industry, especially beef producers, is facing some challenges.
Key role players in the agricultural value chain should use the pandemic as an impetus to advocate for policies that allow for the development of innovative measures to increase efforts to automate the entire food system. These innovations should address the flaws the current pandemic has revealed in the food system, including the supply chain disruptions mentioned.
South Africa will have to be proactive in this regard, and not wait for the technology and/or agritech measures to be developed elsewhere, to prevent importing a system that will not meet the specific needs of our agriculture sector.
Making our supply chains and food systems more robust and resilient to pandemics, and to enable them to keep up with consumption trends, will require the involvement of role players along the entire agriculture value chain.
So, in the longer run, the pandemic could also create opportunities for those ready to adapt to the changing realities.