Food wholesalers face challenges diverting supplies

27 March 2020

Wholesalers have warned food could go to waste as restaurants and bars close under the coronavirus lockdown.

James Bielby, chief executive of Federation of Wholesale Distributors, said many wholesalers had been left with unsold stock after hospitality customers closed their doors “with working capital tied up in stock with a short shelf life”.

“Suppliers are in a similar position, and challenges on packaging, labelling and formats make it hard to repurpose this product into retail, even if the opportunity was there,” he added. 

In order to solve the problem opportunities for wholesalers to divert excess stock to retailers, the NHS, vulnerable groups and the public are being explored.

“It’s a huge collaboration across the food industry supply chain and we’re looking at having a solution in place very quickly,” Bielby said. 

Richard Wilding, professor of supply chain management at Cranfield School of Management, said food was available but “it's just in the wrong place”. 

“Restaurants and bars aren't taking food supplies and that is having to be diverted to other supply chains. To switch the food to other supply chain channels, the biggest challenge is capacity – in terms of vehicles, drivers, warehousing, storage, and other logistics,” he said. 

After weeks of stockpiling, with an estimated £1bn worth of extra food in people's homes, Wilding warned panic buying could potentially increase levels of avoidable food waste at the end of the value chain.

“Food waste occurs anywhere along the supply chain and some of it is unavoidable.  Around one-third of food for human consumption gets lost or wasted globally, around 1.3bn tonnes a year. Most of this food waste occurs when it reaches consumers and what is happening with panic buying is a potential increase of avoidable waste at the end of the chain, after purchase.” 

Wilding’s warning comes as Ocado boss Stuart Rose urged shoppers to “show some restraint” when it comes to shopping for groceries.

He told BBC Radio 4: “There is no shortage of food. Nobody will starve. There is a £1bn more food in people’s larders than there was a couple of weeks ago. What are they doing with it? How much do you need to eat? How much do you need to store away?”

Meanwhile, Tesco has put an 80 item limit on online orders in order to “to increase the number of customers we [Tesco] can safely deliver to”.

It added: “We're at full capacity for the next few weeks and we ask those who are able to safely come to stores to do so, instead of shopping online.

“This will help us to free up more slots for the more vulnerable.”

Separately, the owner of Primark has said it is putting rent payments on hold as stores closures under the lockdown result in lost sales of £650m a month.

“To manage Primark stock we have also regrettably informed suppliers that we will stop placing new orders,” said Associated British Foods.

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