The winds of change blow due to COVID-19: should we build shelters or windmills?

“Do not pretend that things will change if we always do the same. The crisis is the best blessing that can happen to people and countries, because the crisis brings progress.” (Albert Einstein)

Here below, some thoughts out of the survey we conducted end of April

The audience of our survey

Our on-line survey reached more than 9.800 people of which 210 clicked from Italy (65%) and from Europe (35%); majority of respondent (60%) are directly involved in agro-food business

(farmers, transformers, distributors/brokers) pretty all high ranked / decision makers; remaining 40% groups academic professors, consultant and consumers.

Although profiles are very homogeneous, it clearly emerges the different behaviour between Italians and Europeans on how to cope with big changes expected: while Italians conservatively envisage fine-tuning and little adjustments, European operators are more for huge transformation to cope with radical environmental changes.

Is the shock induced by COVID-19 structural? Not on the long run

Nearly 80% of all respondent consider the huge volume swap from HORECA to Retail  just temporary and expect to come back to usual share in a couple of years; interestingly, majority of the remaining 20% that expect a more structural/long term changes, are non Italian.

Is Demand the driver for structural changes? Price vs. Service  

According to Italian panellists, consumers wont substantially change their attitude giving equal importance to price, quality and service. Europeans, on the contrary, envisage the consumer very looking for price.

Overall, entire panel expects more interests on local products purchase and, also, raising importance of Brands since confidence consumers have on.

Wide consensus is also on an increase in domestic consumptions but, while Europeans envisage strong increase of B2C on-line sales (e-shops), Italians expect also strong raise in “food delivery” even if more expensive.

How do agro-food value chains will react? Margin vs. Resilience – Long vs. Short value chain

More evident is the different perception between Italians and Europeans on how Agro-food value chains will adapt to new attitude expected on Demand side.

While Italians believe enterprises will keep looking for margin maximization via best possible operation efficiency, embedding a lot of rigidity, Europeans expect companies will work on resilience, organizing to quickly react to sudden changes in demand needs.
In a nutshell: margin vs. flexibility

Moreover, Italians expect only small adjustments in agro-food value chains and commercial intermediation to maintain, or even increase, current importance still delivering a lot of value.

Abroad, operators expect profound structural changes in direction to shorter, more reactive chains where operators want to directly play the market instead of delegating intermediaries.

Which is the role of Technology from now on? Not the one it could be.

On the one hand, two third of the entire panel, equally divided between Italians and Foreigners, expect technology to favour a better and quicker market information flow (it could be interesting to deepen how to generate such information…); similarly, it is quite peculiar nobody considered technology for traceability and quality assurance improvement, even if this is an explicit need of the more conscious end consumer and several pilot projects are already going on.

On the other hand, while Europeans expect technology playing significant role in commercial (inbound-outbound / B2B-B2C) activities, Italians are much cooler just looking at direct sales to be managed via e-platforms. Just Italians start now to consider “smart working” as a structural very new option, moving forward.

Which outcome? This brainstorming exercise to be continued!

First of all, survey results are satisfactory for us in terms of participation, being the goal to “feel a sentiment” about potential changes induced by this pandemic in society, behaviour, buying attitudes.

Key takeaway stays in the pretty different attitudes in the two “sub-panels”, being the Italians much more conservative than the European neighbour.

Will we face a revolution or just an evolution? Answer stays in the willingness of continuously challenge status quo in the aim of developing the right strategies to compete in new scenarios, bearing in mind that it wont be possible to fix new issues with old tools.

Author Gaetano Piermarocchi

More posts by Gaetano Piermarocchi

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