Closures of foodservice outlets around Denmark due to COVID-19-related quarantine measures have led to repercussions for the Danish food value chain. While demand for premium meat cuts normally sold directly to restaurants is impacted, the sector is observing an uptick in purchases of rye bread for at-home consumption. The Danish Food and Drink Federation reports that these changes in the demands have “turned everything upside down” for the local industry.
According to Leif Nielsen, Director at Danish Food and Drink Federation and Board Member of Danish Food Cluster, shifts in the Danes’ shopping habits during the coronavirus lockdown has had a visible impact, especially on one part of the industry. “We are seeing a remarkable change in the restaurant business. All the food we as consumers used to eat and socialize around at the restaurants is decreasingly produced and sold.”
But it is not only the restaurants themselves that suffer from the crisis. The whole value chain connected to the restaurants and cafés is affected by the lockdown of the country, Nielsen stresses.
“The majority of Danes do not buy the more expensive cuts of meat and fish which are normally primarily sold B2B to restaurants. This means that the suppliers of for instance these types of cuts are also very affected by the closed restaurants,” he says.
“As an increased number of people are working from home these days, we are not eating the warm lunch dishes that we used to get served in the canteens of our workplaces. There is instead now an increased demand for rye bread and leverpostej (Liver pâté) in Danish homes,” he explains.
“Retail shops are increasing their sales, especially on their web shops and on to-go and delivery services. But unfortunately, takeaway and delivery services do not make it up for the restaurants and cafés,” he adds.
Nielsen further pointed out that even while Danes are ordering more takeaway food than before, it does not compare to the sales they would have had if they could open up as usual.
All industries are currently affected by the present condition of both Denmark and the rest of the world. Tourism is down and many companies are hit hard by the mandatory closings. According to Nielsen, however, the food industry generally “may not be hit as hard” by the pandemic.This echoes a similar sentiment from the World Food Programme (WFP). However, the organization notes that this could change for the worse – and soon – if anxiety-driven panic by major food importers is hastened.
“The food industry is not very cyclical as food is something that we all need and thereby there will always be a demand. We see a change in which foods are demanded, but looking at the industry in general, we are not as affected as some other industries unfortunately are,” says Nielsen.
The case might not be the same for other businesses across Europe. The EU’s dairy and livestock sectors have previously spoken out about “deteriorating” market conditions. Earlier this month, producers and their cooperatives demanded urgent action from the European Commission (EC), including calls for “extraordinary measures” to mitigate the crisis emerging within the agri-food industry.
Despite a downswing for Danish restaurant businesses, Nielsen remains positive that there is hope for the restaurants and cafés on the other side of the crisis. “When the country opens up again, we will most likely see that the general public will slowly start seeking the socialization that comes with going out and enjoying a meal in a restaurant, but it will be a gradual process.”
Government aid
Many new initiatives have been implemented in order to try and secure the industry – both during and after the crisis. Aid packages provided by the Danish government are noted by Nielsen as being significantly helpful for some companies, while some have also taken further initiatives and measures to adapt to the changing economic climate.
“We see a lot of food companies and restaurants doing their best to secure their employees and making sure they have the necessary sanitary measures that can help them avoid contamination. That is a fundamental step in the right direction towards an opening of the country,” Nielsen concludes.
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