The following entry comes from the desk of Intertek Alchemy’s own VP of Consulting, Jeff Chilton.
2020 in Review
Certainly, any plans for clear vision at the start of 2020 came to an abrupt end quickly. The year started with division and fighting regarding the impeachment process. It soon became evident the world faced a new major threat with Coronavirus. As an official pandemic was declared in March, things changed rapidly and dramatically. Economic volatility became rampant. Tens of thousands of people died while hundreds of thousands became infected. Fear and panic ensued. Life as we had always known it ceased to exist. Restaurants, movie theaters, churches, and places of common congregation closed. The vulnerabilities of the food industry, set in its primitive ways of design for decades, became glaringly evident contributing to the problem.
Caught in a catch-22 between being critical essential workers needed to produce products to keep grocery store shelves stocked while working in poorly designed plants that packed workers into production lines and break rooms like sardines, the food industry was hit hard with illnesses and deaths. Along with health care workers and truck drivers, food industry workers were hailed as heroes to keep the country fed and supplied while risking their own lives and those of their families. Food companies responded quickly to promote employee screening, masks, social distancing, installing partitions between workers, reinforcing handwashing, cleaning and sanitizing procedures, and COVID-19 testing. Production schedules and shifts were staggered to reduce people on site. It was the best that could be done in the short term but far from all that needs to be done long term.
Companies realized their Crisis Management and Emergency Plans were woefully inadequate to address a pandemic threat of this magnitude. Sub-committees for Maintenance, Engineering, Operations, Sanitation, Human Resources, and others were formed to manage various aspects of the response. Companies spent hundreds of millions of dollars and countless hours to protect their workers, mitigate losses, and keep supply chains filled. One major food company reported spending $540 million this year during the pandemic for protective measures for employees and additional team member pay and benefits.
In addition to managing internally, the industry was routinely bombarded with new information almost daily from the CDC, OSHA, Trade Associations, WHO, and other sources recommending new requirements. OSHA mandated companies develop Infectious Diseases Preparedness and Response Plans as a new regulatory requirement. Companies had to learn new information, develop plans, and train their employees continually throughout the year.
Adaptability to change also became a major requirement even for the basic survival of companies and individuals. Food service sales to restaurants plummeted by more than 60% while demand for retail products at grocery stores increased proportionately. Companies had to adapt quickly to change products and packaging designs along with sales and marketing channels to evolve and survive. As individuals, we had to adapt to work from home positions where possible to limit exposure and risk.
The other major lesson learned for the food industry was a vulnerability in supply chains. Product shortages routinely occurred due to the inability of vendors to provide raw materials, transportation issues, and employee staffing shortages. Companies that relied on single suppliers were hit hardest. We quickly learned that greater depth is needed in our supply chains to have multiple vendors to source raw materials from and greater breadth throughout the supply chain.
Beyond the pandemic, 2020 was also a difficult and divisive year due to the presidential election and numerous high profile racial incidents that provoked violence and rioting. The high emotional toll of the pandemic, economic uncertainty, politics, and racism have been traumatic to many. No doubt, 2020 will be remembered as one of the most difficult and challenging years of our lifetime.
What’s on the horizon?
As we look ahead into 2021, there is still a great deal of uncertainty in the future. Fortunately, there is always hope on the horizon as well. The first quarter of 2021 will still definitely be difficult. As we now approach 300,000 deaths and 16 million cases in the US and 1.6 million deaths and 70 million cases worldwide, we know COVID-19 is not going away any time soon. The wide distribution of a vaccine starting in Q1 will be a big help. Healthcare workers and food industry workers will receive priority to receive the vaccine first. Hopefully, this will significantly reduce the number of cases and deaths. I will make a stern point that even a vaccine is not a silver bullet. There will always be another pandemic and potential mutation of COVID-19 that we have to be prepared for. The long-term work of plant redesign, supply chain improvements, and improved worker practices must continue full force.
The presidential inauguration in January will also bring significant change to the country, hopefully in a positive way. A transition to a democratic administration will undoubtedly bring greater regulatory requirements from numerous agencies that companies will have to deal with adding more costs and burdens to the industry. By the second half of 2021, things should start to stabilize to understand the current environment by then to begin growing and thriving again.
At the end of the day, my best advice and encouragement is to simply be a good human. Love, help, and support one another. For many, a change in value systems to emphasize the importance of family, health, and faith is by far the most important lesson learned this year. Do your part to do the best you can for your family, those within your circle of influence, and the world in general. We will get through this together and look forward to a brighter 2021 full of greater hope. Best wishes for a happy holiday season and a blessed New Year!