Latin America's food industry reacts to COVID-19 crisis: 'Our operations are indispensable to food security'

By Niamh Michail contact

- Last updated on GMT

© GettyImages/monkeybusinessimages
© GettyImages/monkeybusinessimages

Related tags: COVID-19, Retailers, Food security, Supply chain

Brazil's Marfrig pledges to keep all its meat plants operating; Mercado Libre cuts commission for non-perishable food products; Ambev brewery is now producing alcohol gel. We take a look at how the food industry is responding to the coronavirus outbreak in Latin America.

Meat producer Marfrig has plants in Brazil, Argentina, Uruguay, Chile and the United States that are currently operating at full swing. It said it would work tirelessly to keep them open, ensuring that local and export markets are not short of meat.

Our operations are indispensable to the food security of Brazilians and millions of people in more than 100 countries and - therefore - we will keep our units on during the crisis caused by the COVID-19 pandemic,” ​the company said.

Although the coronavirus outbreak presented extreme challenges, Marfrig, which counts 30,000 employees, said it would continue to operate its production and distribution units to guarantee the supply of “an essential product for most consumers”.

“We will do this with the utmost responsibility, placing the health and safety of all those who work with us and continuously monitoring the conditions of our units. To this end, Marfrig will continue to strictly follow all protocols stipulated by the health authorities of the countries where it operates,” ​it said.

Grupo Bimbo taking 'all measures necessary'

In Mexico, Grupo Bimbo also reiterated its commitment to maintain the availability of its products.

To achieve this, we are taking all the necessary measures that allow us to ensure the supply chain in our operations, as well as providing our collaborators with safe workspaces," ​it said.

The company, which purports to be the biggest baker in the world, has strengthened hygiene in its factories with access filters that take workers’ temperatures and has ramped up the frequency of facility sanitization, for instance.

Mexican trade association ConMéxico, which groups 42 of the country’s leading CPG manufacturers, said its members were working to ensure the supply of food products, particularly long shelf-life and pantry goods.

“This allows smart purchases, rationally take advantage of the goods purchased to avoid waste, while providing nutritional options for proper nutrition at home,” ​it said.

PepsiCo, Kellogg announce extra hires to meet new demand

While some CPG companies have been forced to lay off staff due to the viral outbreak, which the World Health Organization declared a global pandemic, others are taking on extra workers.

In the UK, Kellogg is recruiting workers to meet demand for cereal products while PepsiCo ​announced plans to hire 6,000 new workers over the "coming months​" to meet the extra retail demand for shelf-stable food products due to the Covid-19 outbreak.

It also announced compensation packages to more than 90,000 staff at its food and beverage divisions across North America, although this is understood to apply to US workers only.

Ambev produces hand sanitizer

Other companies are diverting resources to meet the unexpected spike in demand for specific products. Brazilian beer giant Ambev, for instance, has converted one of its breweries in Rio de Janeiro state to alcohol gel production, manufacturing half a million bottles that will be distributed to public hospitals.

"The demand for alcohol gel continues to grow and there is already a shortage on the market,"​ Ambev explained.

Mercado Libre lowers commission

As governments across Latin America enforce quarantine measures or strongly advise the public to avoid all non-essential out-of-home movement, demand for online groceries has skyrocketed.

Argentinian e-commerce giant Mercado Libre has lowered the commissions for the online sale of basic products.

“On Mercado Libre, we decided to lower commissions to 100% for sellers who have products of this nature. The reduction will impact the commissions of more than 252,000 basic cleaning, personal hygiene and non-perishable food products in more than 21,000 sellers, from March 17 to 31​,” said the firm in a statement.

It also said it was also monitoring the prices of in-demand items such as alcohol gel and face masks to prevent some sellers charging unfairly high prices.

Rappi sees ‘significant increase’ in demand

Delivery companies across the region are also seeing a significant uptick in demand as house-bound consumers stock up on supermarket and pharmacy products through their smartphones.

Colombian startup Rappi, which operates across nine Latin American countries and has around 200,000 delivery people, said it has seen a 30% increase in deliveries in the first two months of 2020 compared with the last two months of 2019.

We noticed a significant increase in the number of supermarket orders, which we believe is a response from users concerned with uncertainties and quarantine measures being taken in different cities​,” the company said in a statement last week.

Uruguayan delivery company PedidosYa, which operates across Latin America, echoed this, saying orders for products from supermarkets and pharmacies have risen while restaurant orders – as of last week - were stable.

In Brazil, James Delivery, owned by Grupo Pão de Açúcar (GPA), a subsidiary of French retail giant Casino, is offering free delivery in a bid to encourage the public to stay at home.

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