The 2019–20 coronavirus pandemic affects the global food industry as governments close down restaurants and bars to slow the spread of the virus. Across the world, restaurants’ daily traffic dropped precipitously compared to the same period in 2019. Closures of restaurants caused a ripple effect among related industries such as food production, liquor, wine, and beer production, food and beverage shipping, fishing, and farming.
Global food security expert Peter Alexander of the University of Edinburgh said that the free-market, just-in-time logistical systems common in industrialized areas are very good at dealing with disruptions in one place or sudden shortages of one commodity but are more vulnerable to systemic shock because there is no slack in the system and no supply reserves to fall back on.
In many places there was panic buying with resulting shortages. There were some supply chain disruptions for some products; for instance, many hand pumps for hand sanitizer bottles are imported into the US from China and were in shorter supply. For most food products in the US normal resupply happened, but panic buying causing empty shelves contributed to consumers’ impulse to stock up and hoard. A US food retail trade group advised retailers to accelerate ordering and consider rationing in order to prevent empty shelves. Food retailers were “among the most affected by the coronavirus, but one of the few businesses that might actually benefit,” at least in the short term according to the television channel Cheddar. Some areas saw price gouging.
The 2020 coronavirus pandemic impacted the US restaurant industry via government closures, resulting in layoffs of workers and loss of income for restaurants and owners. It impacted retail groceries with panic buying noted as early as March 2 in some areas.
According to NPR’s Yuki Noguchi, “Just about every restaurant nationwide has been hit hard at once, making this disaster unique. Industry experts warned that many small businesses would not be able to recover from closures without help from the government. Impact on the greater economy was as of March 17 expected to be large as Americans have in recent years spent more at restaurants than at grocery stores. Lester Jones, chief economist of the National Beer Wholesalers Association, said “This is a very significant and traumatic event for the restaurants, bars, taverns and the industry in general.” Chris Swonger, CED of the Distilled Spirits Council of the United States, said “The impact on our industry is going to be really, really difficult. It’s going to be a real challenge economically for not only the distillers of the United States, but certainly small businesses, restaurants, and bars.
On March 20, The New York Times reported that industry analysts were predicting that two-thirds of restaurants would not survive, and as many as 75% of independents. On March 26, 11 percent of restaurants anticipated permanently closing within the next 30 days.
The US restaurant industry was projected at $899 billion in sales for 2020 by the National Restaurant Association, the main trade association for the industry in the United States. An estimated 99% of companies in the industry are family-owned small businesses with fewer than 50 employees. The industry as a whole as of February 2020 employed more than 15 million people, representing 10% of the workforce directly. It is the nation’s second largest private employer and the third largest employer overall. It indirectly employed close to another 10% when dependent businesses such as food producers, trucking, and delivery services were factored in, according to Ohio restaurateur Britney Ruby Miller. In Delaware and Massachusetts, one in ten workers is employed in the restaurant industry. In North Carolina, 11% of workers are employed by the industry.
Forbes reported on March 19 estimated the job losses in the restaurant industry to be in the millions. The National Restaurant Association estimated probable job losses to be five to seven million. Industry experts on March 18 forecasted $225 billion in direct losses and a full economic impact of $675 billion because of additional revenues generated elsewhere in the economy when customers patronize restaurants.Multiple state and local governments offered relief packages for workers and restaurants.