How has the Pandemic affected the Food and Beverage Industry?

When a single event causes a pullback in per-capita GDP in more than 90% of the global economy, it’s kind of a big deal. That was certainly the case with the coronavirus pandemic, which began in earnest in the United States in March 2020. The resulting supply shortages, logistics disruptions, and lifestyle changes touched virtually every aspect of the economy, including – and perhaps especially – the food and beverage industry. Restaurants closed, supermarket shelves emptied, and workers stayed home. Food manufacturing plants were shuttered, on average, nearly eight days in 2020, ranking the industry roughly in the middle of the 20 subsectors tracked by the U.S. Census Bureau in terms of workdays lost. (Apparel manufacturing plants led the way, with average closures of more than 38 days.) For insight into the fallout from the pandemic, I spoke with Dennis Silva of food wholesaler Julius Silvert. What follows is an abridged version of our conversation. Questions and answers have been edited for clarity and conciseness. You can listen to the full interview – How the Food & Beverage Distribution Channel is Changing – on my Food and Beverage Talk podcast.

Guest Bio

Dennis Silva is the Chief Operating Officer of Julius Silvert, a fourth-generation specialty food wholesaler servicing the Atlantic and Northeast regions. Dennis has private equity, board of directors, C-suite, and management consulting experience. He possesses a track record of scaling new business segments while delivering multimillion-dollar profitability improvements.

Key Questions

• What’s changed since the pandemic?
• What’s caused the move away from the traditional nine-to-five job?
• Did the pandemic prompt people to reevaluate their positions in life?

The Pandemic has transformed the Food and Beverage Industry

Jacob: What’s changed since the pandemic?

Dennis: Food inflation certainly is top of mind. We have restaurants that have taken salad off the menu because romaine has quintupled in price. Labor coming out of the pandemic has been something that grocery stores, restaurants, and distributors all grapple with. So, in many cases we’re paying our most competitive labor rates across all positions – warehousing, truck driving, office staff, and sales. At the same time, in many instances, employees have reevaluated what’s important to them and it doesn’t always include that nine-to-five job and they’ll choose something different. In our industry, the estimate is 10% – one-tenth of the workforce is voluntarily leaving.

Labor coming out of the pandemic has been something that grocery stores, restaurants, and distributors all grapple with.

Jacob: Is a change in values responsible for this apparent movement away from the traditional nine-to-five job?

Dennis: Folks have more options now than they ever have had. Also, there’s major erosion from some industries to others. Coupled with that, I think there’s been a major what-do-I-want-in-life self-reflection process taking place. I’ve seen it with my own peers. I’ve seen folks leave a great-paying career within a great industry to take a step back and work part-time or as a consultant. Many people are working less by choice, and there’s nothing wrong with that.

Jacob: Was it the nature of the pandemic that prompted people to reevaluate their positions in life?

Dennis: During the pandemic, it was the doctors and nurses and certain others who were getting the credit for being on the front lines. Many of my colleagues in the food, restaurant, and grocery store subsectors were themselves maybe resentful that they were largely not recognized on the frontlines. They were in effect saying, “I still have to drive this truck to get this food to the grocery store to stock the shelves” but with little fanfare. Employees also are realizing what jobs can and cannot be done remotely. This has caused a new ripple within recruiting and within the workforce. We have a recruiting department here at Julius Silvert. There are plenty of roles that are onsite only, but people are saying they’re looking for a hybrid role. You can’t drive a truck from home.

Employees also are realizing what jobs can and cannot be done remotely.

Jacob: Not yet, but they’re working on it.

Dennis: Oh, sure. In fact, doing away with human overhead and having the algorithm pull the containers off the ships was the topic of a speech I gave recently. But there seems to have been a divide where folks have reevaluated what’s important for them. The fact remains that many food industry jobs just can’t be done from home. I believe in the office culture, but we’ve incorporated hybrid positions where we can. We’ve never had to do that before.

Takeaways 

• Food inflation and labor shortages are obstacles in the food and beverage industry. 
• Employees are rethinking their work–life priorities. 
• Hybrid and part-time working and working less by choice are the new normal.