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The Impact of COVID-19 on Foodservice Now and in the Future

Its Impact Has Been Felt by Everyone in Foodservice

From changes in sanitation practices to a shift toward delivery-only for many operators, the effects of the pandemic are taking hold.  Some segments are suffering more than others such as fine dining, casual dining, mid-scale, C&U and B&I. However, QSR and Healthcare have seen fewer setbacks compared to other channels.1
Once the pandemic passes and foodservice re-opens, it will be interesting to see what behaviors and activities operators continue to embrace. It will take time to unlearn the cautious practices we’re all implementing. How long will the echoes of this period be felt? We’re learning from other countries that it’s not like a switch being turned, it’s a measured, cautious reemergence.

What We’re Seeing Within Foodservice Segments
  • Across all foodservice: 30% of restaurants have closed completely, 65% are still open for take-out and delivery, and only 5% are totally open including dine-in.2

  • 63% have cut staff. On average, 45% of FS staff have been laid off and/or furloughed.1

  • The majority of cuts are in Fine Dining, Casual Dining, Mid-Scale, C&U and B&I.  The segments that have been least affected are QSR and Healthcare.2

  • 52% of C&U operators have had to let go of more than 75% of their staff2

  • 64% of B&I operators have decreased purchase volume.2

The weighted average sales decline across all segments is -65%. Average decreases by segment since COVID-19 include:2

Healthcare & K-12 specifically need:
- All hands-on-deck with an influx of patients and food-insecure children to feed.2
- Grab ‘n go items that can be easily and safely shared are needed.

  • Limited service is narrowing their menus to transition to takeout/delivery.2

  • 44% of FSRs are seeking more disposable packaging and utensils for their operations.2

What We Anticipate for the Future 

While we don’t have a crystal ball, based on conversations with operators, consumers and plenty of research, we do have some inclination of what might be in the cards as we get through this.

Operator Behaviors

  • Segment Shifts and Recovery
    - Clearly there have been certain segments that have been extremely hard hit by this pandemic. We see both short-term and longer-term segment impacts as a result. While some of these segments will recover faster, others, like Cruise Lines, will take longer to rebuild consumer confidence.

The K-12 and C&U segments are also largely shut down for the remainder of this school year. While they should see full recovery, the forced on-line learning environment could result in expanded use. The impact on enrollment is unknown.
B&I has been another hard-hit segment. With millions of office workers settling into working from home, this trend, which was already growing, may accelerate and impact B&I segment volume accordingly.3

  • New and Expanded Sanitization Practices
    - Food safety and sanitization are now top of mind for consumers visiting restaurants and therefore also a top priority for operators.3

  • New and Expanded Sanitization Practices
    - Food safety and sanitization are now top of mind for consumers visiting restaurants and therefore also a top priority for operators.3

  • New Investment in Take-out, Drive-through and Delivery Units
    - New units being built will be more likely to include a drive-through, designated take-out/curb-side service, and a separate kitchen operation to support off-premise eating. Operators will invest more going forward to ensure they are better positioned to weather another similar crisis event.3

Banking on Optimism
Undoubtedly, COVID-19 will change foodservice for some time to come. As it relates to businesses rebounding, 65% of operators are worried, but think we will get through this. 22% are cautiously optimistic we will emerge stronger, and unfortunately, 13% say they won’t survive.2

Be sure to be reaching out to your manufacturer partners for special promotions and discounts. Smucker Away From Home is here for you with convenient, portion-controlled products to help with the shift to take-out and delivery. 70% of guests say customization4 is an important consideration, so maintaining the same level of quality experience will be key during these challenging times. 

Get the Portion Control Rebate: Save up to $5 per case

1 - IFMA, Refusing to Shutdown Webinar, April 3, 2020
2- Datassential, COVID-19 Report 8: The Operator Story, April 3, 2020
3 – IFMA, Looking Forward to Our New Normal, March 31, 2020
4 - https://www.smuckerawayfromhome.com/trends/Breakfast-Handhelds
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