Chaos Follows Crisis: What We Can Expect

April 30, 2020

Chaos Follows Crisis: What We Can Expect

by  

Steve Hixon


Innovation
The European Black Death (1347-1351), the Spanish Flu (1918 – 1919) and the Stock Market Crash (1929)1. What do these three historical events have in common?  They ignited crisis, they abruptly changed daily routines, they created a “new normal.”

Unfortunately, history is repeating itself with the COVID-19 pandemic. In the wake of each historical crisis, panic and hysteria set in and dazed consumers were left to contemplate the question: what now?

As this current pandemic continues, the shock might dissipate, but the impact of the crisis will only intensify. If you are a leader in the meat industry, the most difficult stages have just started to emerge: Crisis will devolve into volatility, instability and chaos. Trend thought leader Jeremy Gutsche speaks about path dependency2, which is essentially doing things the way you’ve always done them. Thanks to COVID-19, our path dependency over the previous 10 years has essentially been wiped out. You have only two choices: throw in the towel or adapt, evolve, innovate and embrace chaos as an opportunity.

The COVID-19 crisis has consumed the U.S. for approximately six weeks now and will likely continue for another four to six weeks. As quarantine orders are lifted gradually across states, chaos is bound to follow. Within Georgia, one of the first states to re-open its economy, chaos has already begun. Based on social chatter, a percentage of the population will jump back into what was once normal life and others will wait and see. So, if you are a meat producer trying to continue supplying your customers, what should you expect?

If we have learned anything from the last few crisis events, chaos will endure for at least the next six months, if not a year to 18 months. No matter your political affiliation or preferred news source, COVID-19 will be no different.

What we can count on is those who innovate, thrive and operate will force shifts in the meat industry to deliver on the new buying habits, spending capability and preferred purchase methods of tomorrow’s “post-pandemic” consumer.

Here are ways to re-think what you know about consumers and operations that can help you seize opportunities and excel while others are scrambling:

Consumers

  • Millennials, the largest living generation, were driving early pandemic meat buying. More than half of Americans under the age of 45 (Millennials are 24-39) have lost their job, been put on leave or had hours cut due to COVID-19.
  • What mark is this pandemic going to leave on the generation that saw empty meat cases for the first time ever?  During the Great Depression, my grandparents hoarded products, a behavior that stayed with them for decades. I recall having a freezer full of meat and yes, a shelf full of toilet paper (1-ply at that). I also remember being told, “Stevie, finish what’s on your plate before leaving the table.” This makes a lasting impression that you do not waste and you value what you have. I believe Millennials will carry some of these same traits long after this health crisis is over.
  • Takeaway: Produce meat products that will allow Millennials to stock up. If you can produce multi-species products (i.e., beef, pork, chicken), get creative. Consider producing multi-protein perforated packs. I can hear plant operators saying, “You can’t produce poultry in a beef plant.” True today, but what can you do to change that? (GM was not setup to build ventilators but began making them in record time to address the critical shortage when COVID-19 hit.)

Retailers

  • Retailers are going to continue to struggle with inventory; however, we in the meat industry have an ally no other department has: the butcher or meat merchandiser. The number one trusted individual in the grocery store is the meat manager. Leverage that!
  • Takeaway: I am not suggesting we reinstate swinging beef, but we could potentially solve plant personnel challenges by changing the break and packing primal cuts or even quarters. Raw material can be shipped to retailers, where the butcher cuts and packs back of house. Sounds old school, but it re-establishes communication between the consumer and the butcher. Retailers can truly educate again, customize cuts and deepen trust with the consumer. You may ask, “Where can we source skilled butcher labor?” Get creative and seek out restaurant chefs, tap into culinary schools and possibly processing facilities.

Processors

  • It’s no surprise that one of the top topics at most food and meat industry events is Human Resources and Worker Retention. COVID-19’s impact on worker retention and future recruitment may create an issue for plant operations.
  • Takeaway: If shipping bulk to retailers is not possible, then consider automation. Engineering automation throughout a plant would not only aid worker shortages but would also enhance food security measures. Imagine, after the harvest, a production line converted to bulk pack, portion control, sliced, diced, etc., touchless automated packaging (TAP). If you, the processor, do not integrate automation, the retailer will find a way to make it happen. Who is going to be first?

Foodservice

  • Foodservice is tricky. There’s no guarantee consumers will rush back to their favorite restaurant or sit in a coffee shop for hours attempting to work (Panera Bread, anyone?). Look, we’re all dying to go back to our pre-COVID life, but not so fast…
  • Unfortunately, many smaller establishments will not return and some of our favorite national chains could also close. But we may see more niche players who serve smaller menus or use mobile platforms (i.e., food trucks or rotating cuisine provided at bars). Ultimately, my guess is people will have limited spending power and be hesitant to sit in close restaurant quarters. But there is opportunity.
  • Takeaway: Take out will be revolutionized. Along with innovative ways to seat consumers at least six feet from one another, we will see a push to attract more “order online for pick-up” orders and develop more robust delivery solutions. How can the meat industry support the potential “new normal” dinner experience? If there are fewer patrons, foodservice will need to look at portion size to counter this decrease. This will extend meat selections and provide a meat item solution to help stabilize profits. Consider partnering with restaurants who can turn their kitchen into a butcher shop to create alternate meat outlets for consumers and new profit centers for foodservice operators.

If history tells us anything, we are adaptable, we can pivot when faced with adversity and we have identified strategic and innovative solutions to address our “#newnormal.” We will do it again.

1 11 ways pandemics have changed the course of human history, Business Insider, March 2020
2 TREND HUNTER, Innovating Through Chaos, 2020
3 Data for Progress: The Staggering Economic Impact of the Coronavirus Pandemic, April 2020

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