AgriNovus Indiana released a new study Thursday that found aggregate losses from the global pandemic cost Indiana food producers an estimated $500 million and highlighted a food chain going through disruption and evolution at the same time.
Developed in partnership with researchers at Purdue University and the food and agribusiness strategy team at EY-Parthenon, the research report, “Resilience through Disruption” provides a comprehensive analysis of Indiana’s food supply chain, features insights from Indiana producers and makes five recommendations to reduce fragility and improve future resilience of the state’s food supply chain.
Key findings from the report include:
- Aggregate losses attributed to the pandemic across major commodities produced in Indiana (corn, soybeans, hogs, dairy and eggs) are estimated at more than $500 million;
- During the spring lock-downs, food-away-from-home spending in Indiana fell by over 60 percent, and remains down by over double-digits from January 2020; and
- The increasing complexity in food retail continues to grow – in the 1960s the average grocery store offered 6,000 products – today, that number is more than 33,000.
The five key recommendations defined in the research are:
- Implement transparency and traceability – Consumers, customers, processors and manufacturers increasingly require transparency, and companies need the ability to see real-time information about their supply chains.
- Increase collaboration – To meet evolving consumer needs for nutrition, affordability, sustainability and transparency, food companies need to collaborate between buyers and suppliers to measure and manage risk.
- Build last-mile agility – A balance of efficiency with robustness must exist in the food supply chain to plan for systemic disruption. Manufacturers should consider inventory holding arrangements with adjacent chain participants to build disruption buffers.
- Reexamine customer segmentation – Consumers are changing the way they shop, the products they purchase and the attributes they prioritize. Companies need to focus on key purchase criteria, shopping behavior and generational differences.
- Invest in the future – Changes in labor availability and consumer demands offer enormous opportunities for investment, and Indiana has the infrastructure, knowledge and skilled labor to compete for venture capital funding in food and agriculture.
This follows the release of an AgriNovus-commissioned study, Innovative Agbioscience in Indiana: 2020 Assessment, that found Indiana’s agbioscience innovation economy directly contributes more than $39 billion to the state’s economy.
Source: AgriNovus Indiana
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