Analysis

Solutions to COVID-19 supermarket supply problems

1st April 2020
Alex Lynn

Empty supermarket shelves have become a common sight in recent weeks, as the world continues to deal with the fallout from the Covid-19 pandemic and worries about food shortages continue. Supermarkets are struggling to cope with surging demand stemming from panic buying, with customers stripping shelves bare within hours of supermarkets opening.

Although many in the industry expect shopping patterns to eventually return to normal, former Sainsbury's CEO Justin King recently told Channel 4 that empty supermarket shelves could persist for several months, with supermarkets struggling to overcome logistical problems.

The coronavirus pandemic has highlighted wider concerns about the security of the notoriously complex supply chains that modern supermarkets rely on. There are several middlemen standing in between the farmer and the consumer, each adding inefficiencies and wastage to the process. Food often travels a long way to reach consumers.

Half of the food consumed in the UK comes from abroad, with 30% coming from the European Union, with staples such as flour and lamb often travelling thousands of miles to reach supermarkets. In the USA, most fresh produce is grown in California and can take two weeks to reach consumers, requiring multiple forms of transportation and going via large, centralised facilities that are prone to contamination.

This issue is compounded by the ‘just in time’ delivery model used by almost all major supermarkets. Rather than using large stock rooms, supermarkets now rely on suppliers to send items directly to distribution centres, which are then put straight onto the shelves.

This means that if there are any problems with deliveries or surges in demand, there is no back up stock. This is exactly what many shoppers across the world are currently experiencing - the food supply is there; it's just not getting to the supermarkets quickly enough.

The solution to this problem is complex and will require a multifaceted approach to ensure that supermarkets can remain fully stocked, while also remaining competitive. One aspect of a solution could be vertical farming, a technique where crops are grown indoors in stacked trays under controlled conditions including hydroponic nutrient supply and LED lighting designed to deliver the exact light spectrum needed for photosynthesis.

Vertical farming can produce crop yields hundreds of times higher than the same amount of horizontal agricultural land with much quicker growing periods and because it doesn't require arable land to grow crops, vertical farms can be set up right next to urban population centres. For example, New Jersey start-up AeroFarms currently operates America's largest vertical farm, producing 2 million lbs a year of fresh produce in a 70,000 square foot facility in Newark, with fresh produce reaching supermarket shelves in New York City within a day of harvest. The recent IDTechEx report ‘Vertical Farming 2020-2030', provides an in-depth discussion of the technologies and markets behind vertical farming.

Although there are many legitimate concerns about the sustainability and cost effectiveness of vertical farming, it has the potential to seriously disrupt the current fresh produce supply chain, reducing the miles that food must travel before it reaches consumers and shortening the distance between farmer and consumer.

Vertical farms could be set up in or around supermarket distribution centres, delivering large quantities of fresh produce to consumers within a day of harvest, circumventing the logistical challenges currently facing supermarkets. German vertical farming start-up Infarm has taken this a step further, developing turnkey vertical farms that can be installed inside supermarkets, meaning consumers can even pick the produce themselves.

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