Supply Lines: Eh-commerce

Supply Lines
Bloomberg

Spurred by pandemic concerns and enticed by convenience, Canadians have taken to ordering more of their groceries and takeout food online, a trend that's expected to endure long after the health crisis ends.

Demand in Canada, which is struggling to contain rising Covid-19 infection rates during a second wave, is so great that companies are committing more than C$12 billion ($9.1 billion) to online interface services in the food industry for the next five years, according to estimates by the Agri-Food Analytics Lab at Dalhousie University in Halifax, Nova Scotia.

Retail e-commerce sales climbed to a record C$3.9 billion in May, data from Statistics Canada show. Empire, which owns food retailer Sobeys, said online grocery sales surged fourfold in British Columbia and Quebec in the three months through Aug. 1. Loblaws, the nation's biggest grocery chain, on Thursday said e-commerce sales grew by 175% in the third quarter, across its grocery, pharmacy and apparel e-commerce platforms.

Online food-retail sales comprised 1.7% of all pre-pandemic food sales, the Agri-Food Analytics Lab said in a study on e-commerce in the industry, citing data from Nielsen.

"Canada was always known as a lagging country, compared with Europe or the United States," said Sylvain Charlebois, the lab's director. "Our guess is that the percentage of online sales could triple by the end of this year," he said, referring to retail food purchases such as groceries.

Of the 7,290 adults surveyed by the lab in early November:

  • 45% said they have been ordering food online once a week over past six months versus 30% of the respondents who did so prior to the pandemic.
  • Almost half said they will continue ordering food online at least once a week after the outbreak, suggesting that increased online shopping developed in the Covid-19 era could lead to long-lasting habits.

"We estimate that over the last six months, 4.2 million more Canadians are ordering food online at least once a week than before the pandemic," the report said, noting the top reason stated by survey participants was convenience, followed by concerns about the virus.

That represents 11% of the nation's population. Still, 57% of the older boomer generation and 29% of younger millennials surveyed said they have not used any online services in the last six months, while 64% of respondents said they have ordered food online over the last six months.

Marcy Nicholson in Calgary

Charted Territory

Some of the top meat suppliers aren't doing enough to prevent infectious disease outbreaks, underscoring the need to improve measures from biosecurity to animal welfare, a $25 trillion investor coalition said. About three-quarters of the 60 largest publicly traded suppliers of meat, dairy, fish and eggs were deemed high risk when it comes to containing potential future zoonotic diseases, analysis from Fairr shows. More than half of the companies scored high risk on criteria including the use of antibiotics, working conditions and animal welfare.

Today's Must Reads

  • Faster chicken lines | Coronavirus cases are rising, but the Trump administration is making its last push to allow chicken slaughterhouses to speed up production lines, potentially threatening social distancing that's crucial to keeping workers safe.
  • Using food stamp online | Over a million U.S. households are now using government benefits each month to buy groceries online, giving Amazon the chance to capture a new market.
  • Space food | Abu Dhabi is stepping up investment in projects for farming in the desert — and even space — as the Covid-19 crisis prompts more efforts to safeguard food supply.
  • Great beyond | Beyond Meat is collaborating with McDonald's in the creation of patties for the fast-food giant's new line of substitute meat products. Beyond Meat will also provide Pizza Hut with plant-based Italian sausage for a new line of pizza.
  • AI food chain | One of Canada's biggest telecommunications companies is making a foray into agriculture, using technologies such as artificial intelligence to help farmers and ranchers optimize efforts across the food chain.
  • Rice wars | Since the early 1980s, Thailand was the world's largest rice exporter, capturing the global market with firm varieties of jasmine and white rice. But the country has been overtaken by India and Vietnam. Now it's betting on a new type of rice to firm up its exports. 

Save the Date

Next week, the Bloomberg New Economy Forum will convene business and world leaders to address the world's most significant changes and challenges from green energy solutions to a post-pandemic recovery.

Register now to join our global town hall, Nov. 16-19: neweconomyforum.com

On the Bloomberg Terminal

  • Sweet deal | Sugar is another key but contentious topic in the U.K.-EU negotiations following Brexit, given Britain's trade deficit with the bloc, Bloomberg Intelligence says.
  • Luring away | Cocoa supply-chain worries can drive more manufacturers to switch to Barry Callebaut, the largest, fully integrated premium cocoa-product maker.
  • Use the AHOY function to track global commodities trade flows.
  • Click HERE for automated stories about supply chains.
  • See BNEF for BloombergNEF's analysis of clean energy, advanced transport, digital industry, innovative materials, and commodities.
  • Click VRUS on the terminal for news and data on the coronavirus and here for maps and charts.

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