Dutch cartel watchdog Authority for Consumers and Markets (ACM) will, due to the corona crisis, monitor competition in the Netherlands less strictly. ACM director Martijn Snoep explains: “For example, supermarkets want to know if they can keep each other informed. We are faced with those kinds of questions”. This offers opportunities for groundbreaking cooperation in food deliveries.
With this approach, supermarkets are allowed to inform each other about how much inventory they have, says ACM. Logistics service providers are allowed to cooperate in the distribution of food. Branches may make agreements with each other about the smooth handling of debtors. Pharmaceutical wholesalers may inform each other about the quantities they sell. That is good news.
Resilient food supply chains
Food production and distribution (FMCG) is resilient. Food chains are able to switch quickly and efficiently in the event of an emergency. If production or business locations are also affected, the companies are confident that production can be moved to other locations quickly with their business continuity plans. The condition is that partners in the supply chain share data. With all GS1 standards, data exchange is a breeze. Even Dutch ACM is now giving more room for this.
Cooperation between food retail and wholesale
Essential for resilience this is sharing inventory and distribution capacities between FMCG retail ‘at home’ and FMCG wholesale ‘out of home’. Together with their suppliers, they can easily cope with volatile demand. This was shown in the past few days. The FMCG sector, and the transporters, go above and beyond. Top sport with 50 percent more turnover in the stores. How long can this be sustained? We have no idea how many weeks or months the crisis will last?
Dutch industry organization CBL rightly requests measures for smooth retail distribution. Remove restrictions on driving, shopping and window times. Allow night deliveries. Exempt local vehicle restrictions. Organize a flexible deployment of additional personnel. The food industry knows better than anyone what is needed.
Calamities mainly lead to a shift in demand between commercial distribution channels. We no longer eat outside, at the office or on the road. We eat old-fashioned cozy home again. The share of ‘out of home’ in the Netherlands is about 35 percent of the FMCG market. The turnover here has fallen for 80 to 90 percent from one day to the next. Turnover in the stores for the ‘at home’ consumer market rose by 50 percent.
Consumers hoard a moment until they see that the store shelves are full every day (or their own kitchen is full). My store looked well-stocked again today; full shelves. However, the extra demand remains as long as we are having home-arrest. I anticipate that these weeks retailers will change their shelf space plans and store layout to make more room for fresh food. There is literally no room in the stores for the extra turnover today. UK supermarkets decided to drastically cut product ranges.
There is a new problem with the Corona crisis. Not everyone wants or dares to go to the stores anymore. Ordering online and having it delivered at home is a solution. However, online deliveries are now also failing; there is simply not enough capacity.
Why don’t we use the capabilities of the foodservice wholesalers now? Dutch CBL also calls for this: ‘Make self-service wholesalers temporarily open to consumers’. Plenty of warehouse capacity here. Dutch foodservice suppliers Makro and Sligo opened their cash-and-carry stores for consumers.
Delivering to consumers does not have to be a problem. Service providers such as TringTring, Ebakkie, Foodlogica, Dockrs, and Fietskoeriers are eager to help. This also offers opportunities for shops and restaurants that want to continue to serve their local customers; our ‘local heroes’. It is also an opportunity to experiment with light and electric city logistics.
Now is a unique moment time to work together in the food supply chain.
Walther Ploos van Amstel.