What about the impact of the COVID-19 on the members of the Agoria Food Technology Club and their Business development activities and Sales?
On April 2nd, 2020, The International Food Policy Research Institute (IFPRI) published some information on the disruption of the food supply chain. The last 2 weeks we have collected the feedback of almost all our members but also some of our keynote guest speakers from Dan
one, Barry Callebaut or Lantmännen-Unibake
Global trends as of begin April: Business as usual but for how long?
- No supply chain major issues, but the risks are very high from end-April and May, especially for components from France/Italy/Spain (Tier 2/3/4 suppliers). Delivery terms up to + 4-6 weeks delayed
- Some local suppliers (in Flanders), among other things, continues to operate.
- PCB's and other electronic components from Asia are back on track
- Food companies continue to produce but supply of some components like packaging could be a problem (e.g. a Belgian Dairy company has buffer of 15 days packaging, after that.....) or transport costs (e.g. flight costs increase up to 300%).
The absenteeism rate of 15-20% is still manageable, but if remain so, it will be a problem.
- Need to rethink the logistic supply-chain.
Current & Strategic projects: keep on going but prospecting new projects is very difficult
- Offers are still being sent by the sales teams to current customers. Prospection to new customers are very difficult .
- For some members: Order book are full until end September or until end December
- Investments: strategic: just keep going. Not strategic: parked
- Difference between listed companies and the others.
- The companies with a digital infrastructure with added value will be the winners.
- Focus on online production line changeovers in order to reduce the reject rate!
- Remote Maintenance solutions
Despite this, we received some good news!
- A 1st "remote sales contract" has been signed by a Club member with a new customer they met in one of our previous event.
- We connected a Club member with a major Belgian Bakery Ingredient company and has been invited to send an RFQ.
- and a 3rd member member is waiting for a final signature for a 1st test project with another European leader in frozen bakeries.
What will happens when business will restart?
- There will be questions on the project management prioritization. How to manage the funnel because all projects will need to go back in line with timing? quid penalties?
What about travel in the EU for Technical, Business Development&Sales teams, etc.?
- Companies will need to assure their workers that all necessary measures on the workplace have been taken. There is a need to fear down for theirs workers!
And what from our previous keynote guest speakers like e.g. Barry-Callebaut , Danone, Lantmännen-Unibake?
- Barry Callebaut:
- production ongoing for customers such as Nestle, Unilever , Mondelez, etc. Starbucks goes back to high volumes.
- “Gourmet business” in decline.
- Consumer behavior changes: focus on pre-baked products
- Online websites for bakeries etc. like Bakeronline in conjunction with Puratos, which specializes in bakery and confectionery ingredients, launch a free service to help bakers set up an online webshop.
- absenteeism on production lines was 30% mid-March and but now back to 7-8%
- Danone products are on Premium categories and is expecting a sales decrease of consumer’s purchasing power in a few months. They will focus on the Hard Discounters like Aldi, Lidl dairy products.
- Increase of the product diversification but with less SKU’s (Stock Keeping Units)
- Frozen bakery products through their foodservice have a serious impact on Belgian plants (Londerzeel, Brussels & Mouscron) and the French pastries goes mainly to retailservice have less impact.
- No raw materials deliveries issues? No production stop but some concerns for their French workers (50% in Mouscron plant) as the containment rules in France are stronger.
- The main concern from now on is the production planning as the products have specific shelf life. Working with scenario’s “What if...?"