The COVID-19 originates from China and then spread to high-income countries such as Italy, Iran, UAE, the US. Now, it has spread all across the globe including low-income developing countries of South Asia, Africa, and Latin America, where the supply chain of food was already weak. As per the United Nations, there were 820 million people suffering from hunger, two billion people are malnourished and 700 million people are living in the poverty line even before the COVID-19 pandemic. The people in these countries are more vulnerable to the COVID-19 pandemic due to malnourishment. Moreover, during the Ebola crises in Africa, food production plummeted by 12%. In countries like Liberia, around half of the farmers were not able to cultivate crops. Similar circumstances can be witnessed now all across the globe. The downfall in food production is expected to increase the cost of food products also.
Besides, the demands of food products are also shrinking globally especially beverages. During the first weeks of lockdown, panic buying of all food & beverage products was witnessed however due to the closing of schools, and restaurants, the consumption of dairy products has decreased drastically. In the US, the biggest buyer of the milk is the National School Lunch Program however they are not buying anything as the schools are closed during the lockdown. Similarly, as per the Gujarat Cooperative Milk Marketing Federation which is the largest dairy in India operating under ‘Amul’ brands has stated that the milk consumption has decreased by 25% in March 2020 due to nationwide lockdown.
The sale of alcohol was also decreased in the first quarter of 2020. Anheuser-Busch InBev, the largest alcohol company in the World has reported a decline of 5.8% in revenue, and volume declined by 9.3%. The earning of the company declined by 13.7% to $3.9 billion in the first quarter of 2020 and the margin decreased by 3.3% and reached 35.9%. The company also expects that the second quarter of 2020 will be worse than the preceding one. As in April, the company has registered a downfall of 32% in its volumes. In Mexico, the company has to stop its famous beer brand ‘Corona’ as the government put alcohol into non-essential businesses during the lockdown.
Some of the other major food and beverage companies getting affected due to COVID-19 pandemic include Bunge Ltd., Danone S.A., Diageo plc, Groupe Lactalis, Heineken Holding N.V., JBS S.A., Mondelez International, Inc., Nestlé S.A., PepsiCo Inc., the Archer Daniels Midland Co., The Coca-Cola Co., The Kraft Heinz Co., Tyson Foods, Inc., and Wilmar International Ltd.
