Great pain caused by COVID-19 for food producers

The COVID-19 pandemic has hit the food industry in the Netherlands very hard. Many food producers suffering from the coronary measures have experienced a sharp drop in sales, production, exports and profits in the first half of 2020. According to a survey among members of the Federation of Dutch Food Industry (FNLI) and affiliated branch organizations.

Of the participating companies, 60% experienced a slight to strong decrease in turnover compared to the first half of 2019. For just over a quarter (26%) of the companies, the loss of turnover was 20% or more. At the same time, some companies also benefited: a quarter recorded an increase in turnover of up to 20%.

More losers than winners among the companies

Turnover losses are greatest for the companies that deliver to the out of home channel. They have seen their turnover drop by up to 70% compared to the same period last year. This does not only concern producers who supply restaurants, but also caterers at offices, educational and care institutions, pump shops, kiosks or food service companies such as aviation. 78% of these companies experienced a decline in turnover, with 17% even seeing their turnover fall by more than half. 

The provisional expectation for the entire calendar year 2020 compared to 2019 is that sales for these companies will fall by 20 to 25%. This does not yet include the effects of the second 'lockdown'. The expectation is that this - in addition to further turnover losses - will also lead to a decrease in employment in certain sectors within the food industry.

The picture for companies that (mainly) supply supermarkets and specialty stores is more positive. Of those surveyed, 48% saw a slight increase in turnover in the first half of 2020. Nevertheless, 37% of the companies that (mainly) supply retail suffered a loss of turnover. For a significant part of those companies, this drop in turnover was between 20 and 50%. This effect does not focus on specific product categories within retail.

The report is available digitally via www.fnli.nl.