Supermarket supply chains laid bare: why empty shelves were only the start

The fragility of our food and drink supply chains has been laid bare thanks to the coronavirus pandemic.

The unforgettable images of empty supermarket shelves when coronavirus first hit the UK showed just how vulnerable our supply chains are to even slight fluctuations in supply and demand.

It might be easier to get hold of baked beans and flour now, but the disruption isn't over. Just last week, Marmite said its supplies have been hit by a lack of yeast, while soy sauce is in short supply due to a shortage of bottles, and 30 food and drink bodies have warned that COVID-19 has laid bare 'inherent weaknesses' in the resilience of the UK food supply chain.

We've heard assurances that there are no serious underlying food shortages in the UK, but there's no doubt that the spread of coronavirus has had an impact - and there may be more volatility to come.

Here, Which? explores how UK food supply chains work and explain some simple changes you can make to help support UK farmers.

• Find out more: the latest coronavirus news and advice from Which?

Did stockpiling cause supply chain problems?

The coronavirus outbreak was initially characterised by unprecedented retail demand, with shoppers buying more of certain product types than usual.

While panic-buying wasn't quite as widespread or extreme as you might have presumed, the fact that nearly everyone bought a little bit more than usual put supermarkets' 'just-in-time' supply chains under huge strain.

Designed with maximum efficiency in mind and characterised by frequent orders, small lead times and low levels of stock, the current system means that most supply chains contain around four weeks' worth of stock - or, for some fresh products, as little as 24 hours' worth.

Supermarkets themselves store barely anything beyond what you see on the shelves. This ultra-lean system keeps prices low, but is vulnerable to systemic shocks.

Supermarkets tried to meet demand by simplifying their product ranges, employing more staff, rationing quantities and changing opening hours to allow time to restock. Other tactics included working with smaller producers and allowing suppliers to deliver directly to stores.

Meanwhile, the UK government classed all food logistics and retail employees as key workers, enabling them to keep working once the country went into lockdown. Initial worries about absentee rates due to workers falling sick or who were self-isolating didn't seriously materialise, thanks in part to huge recruitment drives.

But empty shelves were just one manifestation of the COVID-19 impact. While retail demand soared, food service demand plummeted as restaurants and cafes were closed.

• Find out more: coronavirus supermarkets latest: what you need to know about how supermarkets are adapting

Why restaurants closing was so devastating

You might think the spare capacity on one side could help meet increased demand on the other, but it hasn't been that simple.

Milk originally destined for coffee shops has been poured down the drain and steaks earmarked for restaurants has been flogged at knockdown prices.

The effects of coronavirus are being felt in manufacturing and distribution, too. Workers being off sick or self-isolating can slow production - some factories are opening seven days a week to compensate - while social distancing is affecting the way that factories and even transport operates, with lorry drivers unable to share cabs.

Flour has been one of the hardest products to find in shops during the pandemic, but there's never actually been a shortage - the trouble has been repackaging catering-sized sacks into smaller bags. Phil Bicknell of the Agriculture and Horticulture Development Board told us of a supplier who couldn't offer a 1.5kg bag of flour, but could easily supply a tonne.

Another example is beef. While there's been an oversupply of fancy steaks, shoppers have been increasingly demanding mince - probably because it's seen as a good-value family staple. This has led to a so-called 'carcass imbalance' for UK beef farmers, meaning the demand for the mix of cuts is out of proportion with the animal's carcass.

It has also prompted some supermarkets to switch from UK to Polish beef in a bid to maintain supply - and there are fears that the sheep and lamb industry could be similarly hit, as around 60% of higher-value cuts - think racks and fillets - would usually have been sold to restaurants or export markets.

So, what does this mean for you? Traditionally pricey cuts of meat could be cheaper than normal and the provenance of your food could be different. If you're concerned about country of origin, check the small print on the packaging to be sure.

• Find out more: 11 popular food assurance labels and what they mean

Video: three simple swaps you can make to support the supply chain

Could fruit and veg be left to rot?

Labour is a huge concern for UK fruit and vegetable farmers right now. Around 70,000 seasonal pickers are needed, 99% of whom would usually be migrant workers from the EU, but only around a third have arrived. According to Cranfield University's Michael Bourlakis, the double whammy of Brexit and coronavirus is to blame.

While some growers have chartered planes to fly in workers from Romania, the 14-day quarantine for people arriving from overseas could cause further issues.

In a bid to tackle the shortfall, industry bosses and the government have launched the Pick for Britain recruitment campaign, which is being backed by the Prince of Wales and advertised by ITV and Waitrose. 

However, despite tens of thousands of people expressing an interest in roles, the number actually taking up an offer by the end of April was low. The government declined to share vacancy numbers with Which?, saying it was 'commercially sensitive'.

The Department for Environment, Food and Rural Affairs (Defra) did tell us that the majority of roles for the early part of the harvest season had been filled, but questions remain over who will pick later in the year.

Issues including farm locations and caring responsibilities are believed to have held back possible employees. A spokesperson for seasonal labour provider Hops said the length of the contracts is another issue: some farms require a commitment of six months or more, which is putting off eligible furloughed candidates hoping to return to their usual jobs sooner than that. 

Then there's the nature of the work itself: it's hard physical labour, the hours are long and the pay relatively low (around £9-£11 an hour). Even once pickers are recruited, social distancing for teams who usually arrive in minibuses and share dormitories or caravans will be a significant challenge.

Unless these problems are solved, we risk UK-grown food rotting in the fields, and strains on supply and prices further down the line, not to mention huge financial stresses for farmers.

• Find out more: latest coronavirus food and eating advice

How much food do we import?

The UK is far from self-sufficient when it comes to food production: we import about 47% of the food we eat, with most coming from the EU (28%), followed by Africa, Asia, North America and South America (4% each).

Where our food comes from:

The three highest-value types of food and drink imported into the UK are fruit and vegetables, meat, and beverages - and even the food we produce here is often dependent on international supply chains of fertiliser, seeds and animal feed.

• Find out more: trade deals and how they affect you

Border controls and quarantines fuel volatility

Internationally, the situation is even more finely balanced, with volatility also caused by border closures, port quarantines, travel restrictions and trade embargoes.

This led the Food and Agriculture Organization of the United Nations to issue a warning shot at the end of March for countries to think carefully about their actions, saying: 'As countries move to enact measures aiming to halt the accelerating COVID-19 pandemic, care must be taken to minimise potential impacts on the food supply or unintended consequences on global trade and food security.' 

Initial delays at border controls prompted the EU to introduce 'green lanes' to help ensure the smooth flow of goods. It also issued a target of 15 minutes for border crossings, suspended freight restrictions and reduced paperwork for lorry drivers.

City University Professor of food policy, Tim Lang, said 'internationally, the future was uncertain and different countries' actions - from lockdowns and restrictions on movement to tariffs - had knock-on effects globally, potentially causing more problems to supply chains'.

Why you could end up paying more for lettuce

Spain, which supplies 60% of the UK's imported lettuce, uses Algerian and Moroccan labour to harvest much of its salad, meaning supply is affected not just by Spain's restrictions on movement, but also those of its North African neighbours. 

The price of Spanish-grown lettuce has already increased, according to analyst Mintec, not helped by an increased demand for salad from health-conscious consumers during lockdown and extreme weather earlier this year.

For British consumers of lettuce, transport costs also mean prices could rise.With the virus rolling across the world at different speeds there are a lot of unknowns. It only takes one country to start banning the export of food - prompting others to retaliate - for the whole system to be at risk.

• Find out more: shoppers spend more on groceries since lockdown - but have prices gone up?

How your cuppa could be affected

It's not just lettuce. The effects of the pandemic are being felt across many different types of food and drink. Tea and coffee are a good example.

Logistics and workforces have been disrupted across the coffee-producing areas of Africa and South America. Lockdowns in Brazil, Colombia and Peru mean coffee farmers are dealing with reduced worker numbers and transport disruption.

Kenya has closed its borders, which means Ethiopian coffee farmers are being forced to find new shipping routes.

With coffee shops and restaurants closed across the world, the market for roasted coffee has been affected. This has serious knock-on effects - it can slow production and harm future purchasing in the chain. It can also affect the already fragile lines of credit and payment.

Fundamentally, if coffee producers can't sell their crops to those who would usually buy them, they'll no longer have a market for their coffee.

Meanwhile, supplies of tea have been similarly affected due to lockdowns in Kenya and India. Pickings of Assam and Darjeeling have already been lost and further harvesting looks under threat.

While supply in the UK appears unaffected so far, some more specialist types of tea and coffee may start becoming harder to find in the months ahead.

• Find out more: the best coffee machines for 2020

Will prices go up?

This volatility in our finely tuned supply chains is likely to have an impact on price. Generally speaking, tight supply generally means prices rise - but it's not always that simple as food prices are also affected by currency movements, oil prices and environmental factors.

Michael Bourlakis told Which?: 'Price is very difficult to predict right now. It's not just about availability of products, but also other factors - weather, harvest and extra costs in supply chain associated with different routes. But these could be offset by the fuel price drop.'

Most experts agree that changes in price are unpredictable and UK consumers so far have been sheltered from dramatic changes. However, according to market analyst firm Mintec, there are already plenty of examples of price changes of food staples trading internationally. 

Italian-grown rice is one example. Italian rice makes up 11% of UK rice imports. Trade prices soared by 37% between mid-March and early April after Thailand and Vietnam suspended rice exports to try to ensure domestic supply. Logistical problems in Europe and consumer stockpiling of rice also contributed to the increase.

Price fluctuations in food commodities such as these don't necessarily translate into immediate differences on UK supermarket shelves. Sometimes it takes time for the change to trickle down the supply chain, and other times suppliers and retailers absorb the extra cost. Other factors, such as oil prices dropping at the moment, may balance out increases elsewhere in the chain.

While UK supermarket shoppers haven't seen any significant rises yet, it's possible that prices could fluctuate in the coming months.

• Find out more: exclusive Which? research reveals the cheapest UK supermarket each month

What's next?

At the time of publishing, coronavirus cases were still rising in many parts of Central and South America. Africa hadn't, at least so far, been hit as hard as many feared. Of course, the impact of outbreaks in these regions remains to be seen.

Meanwhile, the UK workforce is being encouraged to return under social distancing rules. And talks are continuing between the UK and the EU and US on post-Brexit trade deals.

And experts have warned increased food fraud is a risk if prices for staple products rise and under-pressure retailers look to make fast decisions on new suppliers.

While the future is unclear, it's worth remembering our supply chains have weathered the storm so far. The COVID-19 pandemic has shone a spotlight on the vulnerability of our supply chains - and in the longer term, it's likely to increase pressure on companies and governments to strengthen them.

• Find out more: basic food standards under threat from US trade deal

Which? calls for action

In recent decades the food system has gone through a number of crises, from BSE to the horsemeat scandal. These highlighted how complex - and vulnerable - supply chains can be, and we are seeing this again now.

Responsibilities for food are spread across a range of government departments with different goals. The problems some vulnerable people are finding getting basic food supplies is an immediate example of where this causes problems. But the same applies to future trade policy - and trade deals - which have the potential to shape our food choices.

From tackling obesity and climate change to basic food security, it's essential that the UK reshapes post-EU food policy in a way that protects consumer interests. You should still be able to buy UK-produced food and have confidence that imported products meet UK standards.

Sue Davies, Which? head of consumer protection and food policy, says: 'This crisis reinforces the importance of building a resilient, sustainable food system that meets consumers' expectations.

'Which? has long called for a national food strategy that applies across government. The government has now committed to this so we will be working to make sure that it is robust and has consumer interests at its heart.

• Sign our petition to protect UK food standards

What you can do to help supply chains

1. Minimise waste Plan meals, write a shopping list, use a freezer, and get creative with substituting ingredients that aren't easily available when cooking from recipes.
2. Shop locally Support local suppliers and independent shops where you can. Sometimes these types of businesses don't have the buying power or the infrastructure to shore up their supply chains as easily as the bigger supermarkets.
3. Be flexible: Look at current prices and be prepared to abandon preconceptions of what's affordable. Be open to different cuts of meat, different styles of packaging and new sizes of products. For example, steak or premium fish could be cheaper than you expect.
4. Get planting If you have a garden, start growing fruit and vegetables. It's good for your mental and physical health and will give you a ready supply if certain types of fruit or veg are harder to come by than usual later this year. You can plant lettuce, carrots, turnips, radishes and dwarf French beans in July.
5. Hit the chippy With restaurants and cafes closed, 80-100,000 tonnes of potato sales a month are being lost to UK consumers. If your local chip shop is open, get ordering (as part of a balanced diet, of course).
6. Think seasonal Look for fruit and vegetables that are in season in the UK - in late June and July this will include strawberries, blueberries, raspberries, peas and leeks. You'll be supporting UK farmers, reducing food miles and probably getting better value for money to boot.
7. Don't panic-buy We all saw the problems this created at the start of the outbreak. While tempting, it only leads to bigger issues for everyone in the longer term.