The German foodservice sector has been hit hard by COVID-19, with sales down 50% to restaurants, airlines, caterers of public institutions like universities and schools in March 2020 compared to one year ago. April sales may drop 90%. According to a recent report by the United States Department of Agriculture (USDA), the outlook is grim, and U.S. exports of agricultural products destined to the German foodservice sector may suffer losses.
However, recently released data from the German Frozen Food Institute shows that the demand for frozen food in country has risen sharply, starting with the 11th week of this year onwards, sometimes even in the double-digit range, depending on the product group. The first analyses show that people have purchased frozen food more often and, at the same time, that spending per household increased during the COVID-19 crisis.
With the onset of the COVID-19 pandemic, the food industry has been largely successful in supplying retailers with food. In the first few two weeks of widespread quarantine, there was a surge in demand and some hoarding of durable foods, such as canned food, flour, and noodles. Despite some logistical challenges, the situation has mostly calmed down, with grocery retail shelves largely re-stocked and the food industry is optimistic that it will continue to fulfill consumer demand.
While the food industry successfully deals with the COVID-19 pandemic on food retail level, there is another challenge: the collapse in demand from the food service sector. Products such as pre-cut vegetables and fruits, sauces, condiments, dried products, certain cuts of meat, or fresh fish are facing a precipitous drop in demand. The U.S. specialists estimate that the restaurant sector will not recover quickly. “Early industry estimates indicate that sales from the food industry to food service dropped by 50% in March 2020 compared to March 2019 with projected sales for April down by 90% compared to last year. Besides the closure of restaurants, business is now nearly non-existent with caterers of airlines, trains, universities, schools, and daycares, although supply to hospitals and nursing homes continues,” states the report