Restaurant closures and stay-at-home orders across the country are changing consumer spending on food in grocery stores and online.
The question is whether those new trends will continue, Matt Dusi, sector manager for fruits and vegetables with Wells Fargo, said in a conference call last month.
Over the last three years, purchases from the center aisles of grocery stores had been shrinking. But now there’s been a sudden resurgence in those purchases in the last month as people are going back to the basics, he said.
There have also been changes in the purchases of items from the perimeter of stores. Consumers had been moving to more exotic and organic produce. Now they’re going back to the staples, such as potatoes, apples and oranges. And they want those items in cellophane bags to limit how much they’ve been touched, he said.
Consumers were also moving to smaller packages of value-added products. Now they want products in bigger packages for fewer trips to the store, he said.
The situation has also brought changes for retailers, which were operating on a fine-tuned system to keep product on shelves while keeping delivery costs down. Now, some are buying all the food they can find, he said.
“It’s been very exciting in the produce sector the last four weeks,” he said.
People have been eating more fresh produce at home, he said.
“The big question going forward is will more people keep eating at home,” he said.
There has also been an explosion in E-commerce. People who weren’t tech-savvy are now learning, and E-commerce companies have millions of new customers, he said.
It’s hard to know how many customers will continue going that route, but the produce industry should be thinking about how it can benefit from E-commerce, he said.
The situation has also caused concern and changes on farms and in supply chains, he said.
One of the hottest topics is availability of labor. There have been some challenges in getting labor and some logistical issues, but labor does appear to be available, he said.
There are fewer COVID-19 infections in rural areas, and the U.S. State Department is processing H-2A guestworkers from Mexico. But the industry will be keeping an eye on whether Mexico closes its border, he said.
In addition to securing workers, the industry is focusing on safety in the field and in processing and on flexibility in food channels. Restaurant sales have collapsed, retail sales have exploded and companies are shifting product lines, he said.
On the trucking side, fuel prices have been declining and more trucks are available. But things have shifted, he said. Getting trucks and drivers takes a little time, and there is congestion at distribution centers, he said.
“What a wild and crazy month it’s been,” he said.