State of foodservice: Impacts of COVID-19 on some of commercial baking’s biggest customers

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State of foodservice: Impacts of COVID-19 on some of commercial baking’s biggest customers

15 Mar 2021

Joanie Spencer

Since 2008, Joanie Spencer has covered the retail and wholesale sides of the baking industry.
Serving associations such as the American Society of Baking (ASB) and BEMA, Joanie is also in demand as an industry presenter on bakery operations and trends. She holds a bachelor’s degree in communication from Rockhurst University and a master’s degree in journalism from the University of Missouri.

When she’s not running or playing soccer, Joanie spends her time with her husband and 11-year-old son.

CHICAGO — Lockdowns. Layoffs. Reopening at a quarter of capacity. Overhauling business models and menu offerings.

While the COVID-19 pandemic’s panic buying sent the retail business for commercial baking into hyper speed, the foodservice side was sent into a spiral. According to the National Restaurant Association, the overall restaurant industry projected a $240 billion loss in sales for 2020, which translates to a 27% drop from the originally estimated $899 billion in sales.

It was supposed to be a record year.

But that percentage is only a snapshot of the complicated havoc COVID-19 wreaked on American foodservice operators. In 2020, the industry went from freefall to rebound and then back into decline as it grappled with a range of challenges.

Weather changes either welcomed outdoor dining or shut it down, depending on the location, season or even week. Consumer cabin fever and quarantine fatigue led people back into bars and restaurants, which then triggered more shutdowns and restrictions.

Despite all that, many foodservice operators searched for new ways to keep foot traffic moving and their frontline workers safe.

“We had to deal with quickly changing regulations — country by country, region by region — and they were all very different,” said Eric Kestenblatt, director of global bakery quality assurance for Lorton, VA—based Five Guys Enterprises LLC. In one area, for instance, face masks were mandated; in another, they were merely a suggestion.

“Many foodservice operators searched for new ways to keep foot traffic moving and their frontline workers safe.”

Today, as we pass the one-year mark of the pandemic’s presence on US soil, a light is visible at the end of the tunnel … although right now, it’s just a dull flame.

“Looking ahead at 2021, there’s not an immediate rebound to prosperity, not at the level of sales the industry posted in January and February of 2020,” said Hudson Riehle, senior VP of research for the National Restaurant Association. “The challenge of forecasting is that one really needs to know where the trough of the chasm is. From there, you can project going forward.”

In August 2020, Mintel’s prediction for a full recovery projected the year 2023 when the industry would see a rebound to pre-pandemic sales, and the recovery period is expected to last into 2025 because of recessionary effects further impeding consumers ability to dine out.

But that doesn’t mean foodservice is without opportunity or that operators are not tapping into every available option to create new ways to stay afloat. Many are experimenting with creative solutions to satisfy consumers — and their own bottom line.

Pivoting has become the key to survival for fine-dining establishments such as Canlis in the Pacific Northwest, which served burgers over the summer, offered meal kits over the holidays and even launched Canlis Community College on YouTube to offer a variety of educational content to simply stay connected with its community.

Many limited- and quick-service establishments have, in some cases, discovered a bit of serendipity, despite the roller coaster of regulations and other roadblocks that came with those long, hard winter months exacerbated by COVID-19 spikes post-holiday. But as the sun re-emerges this spring and summer, so will the crowds.

“We’ll be able to dine outdoors again, even if we’re just crawling our way out in many parts of the country,” Balanko said. “Spring will bring outdoor dining, and there will be consumer receptivity to that.”

Last year, it was around mid-summer when consumers started experiencing cooking fatigue. Despite people’s initial gung-ho attitude toward at-home cooking and baking, many grew weary after a few months and headed back to dining out, whether it was on-premise or with carryout and delivery options. This increased support of small, local establishments has created a ripple effect.

“When you think about foodservice and all the people who lost their jobs overnight, people became aware of that,” Balanko said.

This idea has sparked a desire for consumers to keep their local economies alive, and it reflects one of the biggest lessons from the pandemic: community support is vital. All we have is each other.

While society navigates the road to recovery, foodservice providers — and the bakeries who supply them — will always be here. But now, with the wisdom from lessons learned along the way.

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