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Demand for some food and consumer goods surges 500% as Canadians stock up

Demand for some food and consumer goods surges 500% as Canadians stock up
Business
Food and consumer goods manufacturers reported a surge in demand in the last two weeks of March as home-bound Canadians rushed to grocery stores to stock up for an indefinite period of self-isolation to combat the spread of COVID-19.

Eighty per cent of manufacturers have increased production to deal with record order volumes of up to 500 per cent higher than usual, hitting an “all-time high,” according to a survey released Thursday by Food and Consumer Products of Canada, an industry group representing more than 100 food, beverage and consumer products companies.

The majority of manufacturers said orders increased between 50 and 100 per cent, while orders at least tripled for 30 per cent of respondents, while some producers reported increases of as much as 500 per cent, according to the survey.

Companies responded by ramping up production, with 70 per cent focusing on the most in-demand products. The hottest quarantine commodities include paper products, water, canned goods, rice, pasta, baby food, disinfectants and household cleaning products, baking supplies, milk, eggs and over-the-counter medicine.

FCPC members include global packaged goods giants such as Proctor & Gamble Inc. and Unilever Canada Inc., food stalwarts McCain Foods, Campbell’s and Kellogg, and smaller producers such as Happy Planet and Beyond Meat.

“It appears likely the COVID-19 pandemic will entail a prolonged period of uncertainty for Canadian businesses and consumers,” FCPC chief executive Michael Graydon said in a statement.

“Quantifying the profound impacts of COVID-19 on our production, supplies, and workplaces is critical to making smart preparations for continuing the smoothest possible operations to make the food, cleaning, household and health products Canadians need.”

Despite the rush, the vast majority of companies reported confidence in their ability to manage logistics, freight and supply. Eighty per cent reported normal or manageable pressure on warehouse and freight capacity.

Three quarters are confident in their raw material supply even if the current shopping trends continue for another two to five months. Only 5 per cent predict supply chain problems within a month, while 20 per cent aren’t projecting any issues.

FCPC sent the survey by email to executives from its approximately 100 members in the second half of March. More than 80 per cent responded.

A separate report by Dalhousie University and the University of Guelph notes that food prices will see some inflation due to more stringent safety measures and a cheap Canadian dollar.

The report authors said they expect food prices to rise 4 per cent this year, similar to their previous forecast in December.

Most grocers have also had to raise salaries of between 5 per cent to 15 per cent, to an estimated 250,000 employees across more than 5,000 stores since the start of the outbreak, which have added to their costs.

“The food retail and processing sectors are under extreme pressure to change food safety practices, to make customers feel safer. These new protocols will require more work and more staff,” wrote lead author Sylvain Charlebois in a report published Tuesday.

Sources say preliminary discussions have taken place between U.S. and Canadian government officials, but analysts are skeptical it will happen

Unemployment rate could hit 15 or even 20 per cent going through April

The requirement to write new legislation further complicates the Liberal’s massive wage subsidy program, which has already been criticized for its tardy rollout

Opinion: A new federal wage subsidy plan and real estate rent relief program would limit disruption, help jump-start the economy and avoid a financial crisis
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