How is the food industry stacking up against other industries in the age of COVID-19? News + Record Publisher and Editor Bill Horner III talked this week with Hank Cardello, a Governors Club resident who writes about food policy for Forbes magazine. Cardello is the director of the Obesity Solutions Initiative for the Hudson Institute and the CFO of 27° North, a company which helps corporations identify profit and market opportunities while solving major social problems. The firm offers a range of speaking, advisory, workshop and consulting services to the food industry, government agencies, public health organizations and associations.
The transcript of this interview was edited for length and clarity.
Let’s start with the impact from COVID-19 on the food industry, and your insights about supply and demand for food. How is the virus making a difference in the industry?
First of all, the food’s there. So I don’t think we’re going to see any kind of major shortages in supply, I think, except possibly meat and chicken. Supply might be a little constrained just because you can’t just press a button and crank out those products.
But for the most part, I think there’s plenty of food. I think my issue has been more of the fact that some people in the food industry have said, “Well, this is a demand problem rather than a supply problem.” And people are a little panicked and they don’t know what the public policy is in grocery stores, and you see empty shelves…
I think the industry needs to step up and be a little bit more proactive and coming up with some alternatives to distribution centers, where they could open up more avenues for consumers to buy these products. The fact that we have a hand sanitizer and a toilet paper problem from consumer products…to me, this is insane. So I prefer philosophically for industries or companies to step up when they see problems and own it and then go fix them, rather than say “It’s a demand problem,” and stop with that.
What the food industry needs to do is to get all these executives together on TV and in full-page ads and say, “America, don’t worry, we’ve got your back, you’ll have your food.” Nobody’s done that yet. That was a huge missed opportunity for the industry.
I wanted to ask you about the article you wrote in Forbes magazine, because you did touch on that subject, that need for the industry to make a statement about how it will respond…what kind of response have you heard either anecdotally or directly from the industry as a response to what you wrote?
Overwhelmingly, the comments I’ve gotten out of folks I know in industry, including some other trade association folks, is that they felt it was right on.
The point is that I’m not a critic here — I look for a solution. And so overall, the industry folks get it. I always work to be objective when I highlight some issues, or come up with prescriptions, which I think is important. So overall, the response has been yeah, this is pretty much right on.
You mentioned in that article about some of the videos that have gone viral, showing people fighting in stores over toilet paper and paper towels. We have some social media groups in Chatham County where people are posting about which retailers have toilet paper, and when shipments come in, etc. My wife and I went to our favorite grocery store after church on Sunday and they had no meat, no chicken, and absolutely no paper products like paper towels and toilet paper. I’ve never seen the inventory so picked over, even in the worst snowstorms. What’s your message to people who are going to stores and seeing what they’re seeing? How do you comfort them?
Well, again, I think the industry needs to step up. One of my recommendations is literally for suppliers to do what Verizon did — they took out a full page ad in the Wall Street Journal telling customers how they’re going to help and make it clear what they’re doing to help. (Verizon announced it will waive late fees and overage charges for 60 days from March 16 to May 13 for customers who are unable to pay as a result of economic hardship due to the pandemic, and that it won’t terminate service to those customers.) The industry needs to do little things like that, and make it clear what they’re doing in response.
As I’ve said, the food industry and different associations, such as the chicken and the meat associations, the packaged goods crowd — I really feel they need to step up. The industry needs to get up and make a statement like that on TV, in social media and full page ads so that the consumers can calm down and not do these rushes on the grocery stores which creates panic buying and out-of-stocks.
Some of the panic is driven by what’s being said on social media, and some of the confusion in messaging from politicians and some health officials. There have been a lot of contradictory statements; some officials downplay the seriousness of the pandemic, and at the same time some of the worst-case scenarios are absolutely frightening. What kind of advice do you, as someone who’s trying to follow this situation, have for people insofar as how they’re gauging and filtering the news they’re hearing?
That’s a challenging questions. My belief is, first of all, that in a public health crisis, I’m going to listen to the public health experts on this one and take the politics out of it.
Looking around the world, when you see what has happened in a number of places (with the exponential growth of positive tests for COVID-19) and where it’s about to still happen, and if you look at the Johns Hopkins tracking data of the virus from the days from inception, and how many cases and things like that, it’s clear we’re now leading the world on an ugly trend. And to me, that suggests that we all know we were a little late responding. OK, so fine; let’s move on. How do we how do we fix problems now?
And I think right now, the public health people — in a perfect world — they would shut everything down. So you have to get realistic and say, “OK, well, how do you mitigate it as good as you can?”
I think their advice is sound; they’re trying to limit the number of people who are exposed because they don’t have the equipment to deal with all the people who may end up hospitalized. They talk about the curves and the humps on the curves and things like that; their biggest concern is the medical system being overwhelmed.
And, you know, we may not prevent everybody from getting this. But if you overwhelm the medical system, then you double or triple the number of fatalities. And so to me, that’s sage advice (for everyone to shelter in place).
We need more guidance before we’re too quick to open things up and have public gatherings and large crowds. I just don’t think we’re ready for that. I know we want to, and I know we want to get our economy healthy, etc. But I think first things first, because the economy will be really taking a hit if we have even more cases because that’ll lower confidence while everyone’s hunkered down even more. So again, I’m 100 percent behind knowledgeable public health types on this one.
We’re going to emerge from this at some point. How will the food industry look like and what do you think positive will change as the result of all this?
I’ve been thinking a lot about that. First of all, what I see when I’ve talked to a number of the companies is that there’s been some analysis that show that companies that totally cut their costs and get rid of labor and all that suffer more than companies which manage their costs a little bit but still focus on their R&D (research and development) and their branding and their positioning.
I think coming out of this, there will be a heightened interest in health and wellness among consumers. So it’s already increasing; that trend is up. It’ll be even magnified coming out of this. So I think the food industry needs to pay attention to that and make sure they’re totally aligned and recognize that their product portfolios need to shift to healthier offerings.
I also think food safety will be top of mind coming out of this. People in the consumer segment don’t all think alike; I think the foodies will always be the foodies and they want exotic ingredients from all over the world. But I anticipate that there might be some hesitation about using ingredients from other countries for a while — say, imports from Asia. Not that they’re any more dangerous, but I think psychologically there might be some hesitation at least for the more mainstream consumers.
But overall, I do see health and wellness cranking up, and I think that sustainability is on a trajectory that’s going to continue increasing, so companies that pay attention to that will grow.
Any final thoughts?
I think with Chatham County, the good news is when you look at your grocery store options right around here, they’re well run, and everything I’m gathering from the grocery side is that they’re trying to stock their shelves as quickly as possible.
I’m not concerned about running out of food. So I think people need to not worry about that: there will be food. I suspect there will continue to be intermittent problems with things like hand sanitizers, and even silly things like toilet paper. And you mentioned meat and chicken…we’re going to see some ins and outs on these kinds of products.
But for the most part, I don’t think people have to worry. I don’t think they have to worry about their food supply. So if there’s a message, it’s this: there’s ample food out there.