With re-openings, on-line shopping and home delivery, logistics are an immense challenge

Fiera Milano, Rho
17-21.05.2021

News

With re-openings, on-line shopping and home delivery, logistics are an immense challenge

There has never been a shortage of anything on grocery store shelves during the emergency. But now, food logistics have to be reorganised with a view to making permanent changes: from the boom in e-commerce to new out-of-home models.

Food logistics have passed the Covid test. At no time during the acute lockdown phase was there a lack of products in the shops that stayed open, not even those products that are not strictly necessary. This is a result that is not to be taken for granted and we have the entire supply chain to thank, from warehouse workers to haulage companies, from shelf stackers to pickers, to load and route planners. It has, however, been achieved by sacrificing efficiency. On the one hand, the temporary "disappearance" of many recipients of goods, abroad and in Italy - individual operators but especially the entire Ho.Re.Ca. sector - on the other, the growth in demand for numerous products combined with the simultaneous collapse of others (e.g.: eggs +45%, fresh milk -25%) led to an explosion of empty journeys.

Food logistics need to redesign their networks. The Ho.Re.Ca. sector will probably not be a destination like it was before the crisis for some time to come. Delivery points will be reduced as will work for those who were specialised in serving this sector, such as the beverage logistics industry. Shopping in local stores will probably be encouraged in the retail sector, respecting the distancing and sanitisation regulations. And the attempt to shift supermarket and multi-category shopping towards e-commerce and home delivery could be limited by logistics platforms: there would not be enough pickers and carriers to handle the increase in orders.

 

"As far as the out-of-home sector is concerned, a first impression seems to suggest that the fear generated by the emergency will be with us for quite some time and that many people will avoid eating out for a while, even when they can" - says Marco Comelli - Secretary General of OITA - Osservatorio Interdisciplinare Trasporto Alimenti. “It is still too soon to outline a direction but it seems realistic to imagine that a significant number of bars and restaurants simply won’t open up again and this will require extensive reorganisation of our routes. It will become harder to optimise them to avoid empty return trips the way we did in the past and this, along with other safety measures that we are going to have to adopt, will probably increase costs”.

 

In recent weeks that has been a lot of talk about home delivery as a solution to the problem but according to Comelli: “It looks unlikely that the home delivery service will be able to completely fill the gap. The size of a home delivery runs from about thirty to fifty percent of a typical business delivery and is more complex. For instance, you have to maintain a temperature of around 76°C to prevent bacterial reactivation, if it drops too low, or continued cooking, if it rises too high. And the more complex the dish the stricter the conditions become. This influences costs, not to mention the fact that one of the main reasons for eating out is, obviously, the social aspect, which is lost by eating at home”.

 

“In supermarkets too, measures to ensure social distancing seem to be hard to apply. There has been talk of wider aisles and one-way systems in supermarkets but this would have a big impact on the number of customers allowed in store at the same time. Purchasing habits would be affected too (if I’ve forgotten a product, I am more likely to do without than go all the way around the supermarket again to get it). As far as restaurants are concerned, the idea of the ghost kitchen is starting to gain popularity. This sort of remote kitchen would centralise certain functions, reducing costs, and could be the answer to the need to make smaller restaurants economically sustainable”.

 

It is unlikely that new long-term trends will emerge during a disaster of any kind but emergencies often have the power to reinforce trends that are already underway. This is the case of caterers who don’t offer an eat-in service but operate through deliveries. The phenomenon took off in around 2014-2015 with the boom in food delivery services and has already generated subcategories based on the operational and business model. We talk about a cloud kitchen when a property developer creates a co-working space equipped for two or more restaurateurs who undertake to work for one or more delivery platforms, each with its own sign. The term ghost kitchen is preferred when a restaurateur creates where they supply their own labels/signs to delivery platforms or use their own delivery service. A dark kitchen, on the other hand, is managed by a traditional restaurateur who dedicates a specific space to a delivery service, like during lockdown, while in a virtual kitchen, an established brand or sign enters a market where it is not already present by means of a franchise agreement. What will restaurants be like post-Covid? No one knows but these examples of new concepts will definitely have their own space and the reorganisation of food logistics will have to take them into consideration.