Predictions for changes in the competitive landscape for foodservice after COVID-19
In many countries, including those in Europe and North America, COVID-related disruptions remain the most relevant driver of foodservice performance in the near term. The pandemic has accelerated several strategic elements of the foodservice industry, which will continue to drive agendas even after the current crisis ends.
As vaccinations and treatment advance, the focus of attention for foodservice operators will shift from near-term recovery to more strategic matters. According to a recent Rabobank report, the most relevant performance drivers over the next six to 12 months will be the pace of revenue recovery beyond restrictions, the influence of government stimulus, and cash flow challenges.
These drivers point to a challenging operating environment for the foodservice industry, particularly for smaller operators. “Many of these operators may not survive the current disruptions, leading to a materially different industry landscape compared to pre-COVID. However, the final number of closures could be lower than what was originally feared as new capital steps in to take advantage of new opportunities,” according to Amit Sharma, senior analyst—consumer foods at Rabobank.
Since March 2020, a number of companies have changed hands following difficulties that were often pre-existing and then amplified by the pandemic. The targets include operators of all sizes, and the buyers include strategic investors and financial sponsors using the opportunity to expand or build up platforms. Meanwhile, deals triggered by more commonplace drivers, such as gaining scale, diversification, or opportunities to create platforms, also took place in 2020. “When the crisis is over, the competitive landscape will be different from that of 2019 and include larger operators that are financially stronger and more technologically advanced than those that left,” says Maria Castroviejo, senior analyst—consumer foods at Rabobank.