06 January 2021, 08:39 AM
  • We review how the Covid-19 pandemic reshaped the food and drink sector in 2020
2020: a look back at the year for food and drink

‘Vegan’ was once again the word on the fine food sector’s lips at the start of 2020. Veganuary welcomed a record-breaking 400,000 vegan-curious and flexitarians into its fold, and a number of new product launches were unveiled, making it easier than ever for retailers to cater to their rising numbers. Meanwhile, the government awarded £1bn to town centres across the country as part of its Future High Streets Fund.

The UK’s organic market reached a value of £2.45bn, up 4.5% from the previous year, as organic produce became more relevant to shoppers seeking out ways to reduce their environmental impact. Indies were found to defy 2019’s dreadful retail figures, which had it dubbed “the worst year on record”. However, job cuts were on the cards at Tesco’s bakeries as the retailer cut the amount of baking from scratch.

The Coronavirus pandemic well and truly arrived in the UK, and the impacts on the food and drink sector started becoming clear. Panic buying left many supermarket shelves empty, trade shows were postponed and the UK finally went into a full lockdown on 16th March. It wasn’t all bad news though – consumers began to explore local food retailers, which went above and beyond to serve their communities.

The entire dairy supply chain called for government support to save the industry from “irreversible damage”. Dairy farmers and cheesemakers faced financial pressure due to the closure of restaurants and cafés, with some being forced to dispose of milk or cheese. But elsewhere, online retail sales were rocketing. Online shops, digital support hubs and other schemes sprung up to boost indie retailers, and those that adapted early saw green shoots in their businesses.

Ministers responded to the dairy sector’s call for support by launching a hardship fund. Help came from inside the sector too – cheesemaker Shepherds Purse launched a new Feta-style cheese, Fettle, in order to support sheep milk producers through the pandemic, while Waitrose produced a selection box to ensure small producers could reach customers. Meanwhile, research began into how the lockdown was changing eating and shopping habits, with The Vegan Society finding that Brits were cutting down on meat and dairy, while official figures showed a record proportion of food sales took place online in May.

Although consumer confidence in the UK was at an all-time low thanks to Covid-19, a shift to local shopping was becoming apparent. Research by IGD found that younger shoppers were visiting butchers, fishmongers and grocers more often, while older consumers relied on online services. For producers and manufacturers, the government announced a “bounce back” plan designed to help the food and drink industry’s Covid recovery.

The easing of lockdown restrictions led to a rise in retail footfall and a return of consumer confidence. In a boon to the fine food industry, the Farmer Favourability Survey revealed that public support for farmers was at a record high due to their response to Covid – and the government agreed to set up a Trade and Agriculture Commission to support British food standards through future trade deals. Elsewhere, Feltham’s Farm scooped the Best British Cheese at the inaugural Virtual Cheese Awards.

Farm shops around the UK participated in the government’s Eat Out to Help Out scheme in order to boost sales at local eateries and revive the economy, which had just fallen into a recession for the first time in 11 years. However, as local lockdown restrictions were put into place, shopper confidence began to show regional differences.

The popularity of online retail continued to grow as the UK approached Christmas, with data from OnePoll showing that 77% of people now do at least some of their grocery shopping online. Meanwhile, the debate around Britain’s future food standards continued – but support for farmers remained high. Research commissioned by Waitrose revealed an exciting rise in demand for locally produced food, with nearly three quarters of consumers wanting to see more retailers source from British farmers.

Retail footfall was back on the decline, despite the boost from Eat Out to Help Out over the summer. But while small businesses urged the government to provide more economic support, wholesalers said the entire supply chain was at risk of collapsing if they didn’t receive help.

Despite a month-long lockdown in England, grocery sales exploded in the run-up to Christmas. Research by Kantar revealed record spending of £10.9bn over the month as restaurants and pubs closed, leading more consumers to cook meals at home. It came as the government announced that consumers could form “Christmas bubbles” over a five-day period in December.

Brexit took the spotlight off Covid-19 as the end of the transition period approached on 31st December. While the majority of food and drink businesses were still unclear what impact Brexit would have on their businesses, the sector sought to prepare for increased disruption in the new year, whatever the outcome.

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