How to respond tp COVID-19 in the fresh fruit and vegetables sector
Coronavirus (COVID-19) continues to impact activities around the world. The fresh fruit and vegetables industry is no exception. This study provides you with a step-by-step plan to help you deal with the COVID-19 situation in both the short and longer-term. It focusses on organisation, marketing, communication, logistics and planning.
Contents of this page
Focus on cash flow
Communicate with all your stakeholders
Keep everybody safe
The effect on the fresh fruit and vegetables sector
The crisis has had a huge impact on economies worldwide, and the demand for fresh fruit and vegetables has changed. In Europe, the market for healthy and less perishable fresh fruit and vegetables is still doing well. At the same time, anything out of the ordinary, such as exotic fruit, is seeing a decline in demand as restaurants have been hugely affected by the crisis. Supply chains also face various challenges. There are not enough workers to harvest crops, and international logistics have become inefficient and expensive.
As a result, the crisis has led to a much-needed reality check. It has shown us problems in our business as usual approach and emphasised linkages, risks, strengths and weaknesses. It is becoming clear that the way we produce, trade and organise our supply chains must change if we want to minimise the short-term consequences and prepare our business for the time after the crisis.
1. Focus on cash flow
In the short-term, it is all about the survival of your business. In this situation, all business activities should focus on financial liquidity. Your business may not survive if you run out of cash.
As operations and profits are slowing down, your suppliers will be pressing you more and more to pay them on time. They will also be focusing on their cash flow and looking for every possible way to ensure their own liquidity. Open and sincere communication with your suppliers will be key to solving this situation together.
However, you may have difficulties in operation and sales yourself. In the current situation, it can be a challenge to secure enough financing and cash flows for production, pre-harvest and post-harvest activities. If you are having difficulty buying inputs such as seeds, fertilisers and pesticides, this can also affect production. Shipping to your customers might not always be possible. If you do not ship, you cannot invoice, and you will not get paid. In other words, the pressure on your cash flow position will increase if the crisis continues.
2. Communicate with all your stakeholders
This crisis is having an impact on everybody in our industry, from seed suppliers to consumers and everyone in between, at home and abroad. In times of uncertainty, it is important to stay connected. Do not wait for others to contact you, contact them first. In these times, you need each other more than ever.
Communicating well with your customers is one of the most important things you can do right now. You can, of course, use social media, newsletters and other marketing tools to let your customers know that you have things under control. This can be as easy as posting a few photos online of your people picking fruit to show work is continuing.
It is even better to contact your customers directly. Call, send an email or instant message, or make an appointment for a video call. Video chat apps such as WhatsApp Video, Zoom, Facetime and Skype have made video communication a normal part of the conversation process, especially for long-distance communication.
Your customers will want to share their experiences and needs. Communicating your plans helps them feel connected to your business and calm in these uncertain times.
3. Stay informed
European markets are unstable and unpredictable. We see the impact of this pandemic on wholesale and direct markets. Countries such as Italy, Spain, the United Kingdom and France have been particularly affected by COVID-19. The shortage of labour and reduced mobility have greatly affected the fresh supply in many countries. Each country has responded differently, and nobody knows what this means for the fresh sector in the end.
Nowadays, most fresh products are sold by supermarkets. In many countries, restaurants are still closed, and the traditional wholesale sector has been greatly affected. There is also less demand for typical food service products, including all the exotics. Having access to a supermarket supply chain is thus more important than ever.
In these difficult times, consumers turn to affordable fresh fruit and vegetables with a good shelf life. Products still high in demand are healthy and everyday products, such as citrus fruit, apples, bananas and kiwis. Expensive and exotic fruits and vegetables are facing a very difficult market situation.
It is important to prepare yourself for market changes. You need to stay informed. You should follow the news and the measures taken in different markets, as well as those taken by trade organisations in your own country.
The Food and Agricultural Organisation of the United Nations (FAO) has assessed the risks and impact of COVID-19 on the global supply chain. They are very concerned about countries already affected by high levels of food insecurity.
4. Tackle logistics
Getting your products to your buyers has become extremely challenging. Exports of fresh fruit and vegetables have been facing serious difficulties due to flight restrictions in many countries. Depending on the country, air traffic has been moderately to significantly limited.
Traditionally, a lot of exotic fruit and vegetables are transported in the hold of passenger aircrafts. Globally, the capacity challenges in the airfreight market continue. There is limited cargo aircraft capacity, as most passenger flights are grounded. As a result, everybody is trying to get their products on the available cargo freighters, and airfreight costs have increased significantly. Not all routes are available.
Products that can be shipped by sea are also feeling the impact of the crisis. Security measures to stop the spread of COVID-19 have resulted in schedule changes and capacity issues. The export vessel capacity is still a lot lower than normal. Due to limited capacity, extra ocean freight surcharges apply on various ocean export trade lanes. There are peak season, equipment imbalance or congestion surcharges.
Even on the local and regional markets, travel restrictions make it difficult for growers to get their products to market.
In Europe, those selling everyday fruit and vegetables are working hard to maintain the supply under varying logistic circumstances. Fresh logistics within Europe are mostly still functioning. However, several supplying countries and destination countries have closed their borders, and service providers are understaffed. This can delay the shipments. Governments are looking at ways to help with shortages. They are looking at including so-called green lanes, to allow fresh produce to move quickly across European borders.
5. Keep everybody safe
If you are involved in growing fresh fruit and vegetables, going into full quarantine is usually not an option. Keeping workers and yourself healthy can be a challenge if the virus is active in your area.
Take appropriate measures to minimise the risk of COVID-19 and protect your workforce and yourself. Social distancing is important. This may mean a culture change within your company. Also, do not assume that you will not be affected. You need to have a plan in place for when or if it happens.
There are many websites with useful and practical tips about what actions to take to keep everybody safe on your farm and in your packhouse. Read Fruit Growers News’ article on ‘considerations for fruit, vegetable growers related to coronavirus