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NCFIL Director’s Perspective: May 2020

June 3, 2020

The global food industry has experienced highs and lows the past few months as many food companies rapidly pivoted their supply chains and product offerings to harvest crops and place them in distribution.  Meat processing was especially hard hit as scores of plant workers and inspectors became sick with the coronavirus. 

We offer our sincere condolences to those afflicted with this relentless virus, whether physically ill or experiencing business disruption. Glimmers of resilience have surfaced over the last couple of weeks as our industry gets back on its feet and makes plans to move ahead.

NCFIL Business Recovery Plan

NCFIL has been following NC State University administration’s recommendations on mandatory social isolation and remaining closed during the pandemic. As the university considers reopening during North Carolina’s Phase 2, so shall NCFIL. We produced a thorough Business Recovery Plan and supplemented with an additional plan for the university. Special Standard Operating Procedures (SSOP) will be instituted as we return to operations around June 8, 2020. 

We will undergo daily personnel health checks and multiple disinfection procedures for the facility.  Several physical changes will need to be done to our facility to further protect our personnel; those are scheduled to be completed by early-July. Until then, NCFIL staff will work from home and/or in staggered shifts. Fifteen business days after returning to the lab, NCFIL leadership will determine when outside clients, visitors and contractors will be allowed into the facility. Several SSOP for outsiders working in our facility will be in place for an undetermined period of time afterward.

We have secured a limited supply of personal protective equipment, hand sanitizer and disinfectants for the facility. However, our routine supply chain for these essential items has also been impacted by the pandemic. We have backorders from several vendors. In some cases, we have secured the necessary chemicals to produce and bottle our own hand sanitizers and some disinfectants. 

Pilot Plant Status

Several equipment pieces were delivered this past month, and the loading dock is crowded with equipment in crates. Once our staff returns to the facility, we will move equipment to the Pilot Plant for installation and commissioning. Several equipment pieces were delayed because of COVID-19. Some of these delays are 60+ days from original delivery dates.

Approximately half of our equipment is ready for staff to be trained on, but the remaining pieces need to be installed, which often includes setting and securing equipment in the right position, wiring, plumbing, and pipefitting. Control panels and process software still need to be installed for all equipment. The remaining installation work will not begin until we are back in the facility for at least 20 business days and will probably continue for 20-25 business days afterward.

NCFIL Activity During “Stay-at-Home”

Interest in NCFIL maintained its momentum the past month. Our staff has been busy participating in video conferences, writing proposals and providing quote estimates for work to be done. We’ve also consulted with several food entrepreneurs and established food companies on how to move ahead during and after this pandemic.

We have produced several blogs during pandemic isolation, addressing the food supply chain and innovation during and beyond the pandemic, including: 

Several media outlets reviewed our blogs, including the Director’s Perspectives, and opted to either quote our writings or interview us.

Food Innovation and Investment After Coronavirus

The global food supply chain transformed itself relatively quickly over recent months as COVID-19 spread worldwide. It is difficult to forecast where the industry will need to sustain these changes as retailers and consumers seek to rejuvenate normalcy. However, forecasters over the last few years have been emphasizing our global food supply is periled because of growing populations with changing needs and priorities. This issue coupled with shifting environmental conditions indicates our food supply challenges will remain long after COVID-19 passes.  

Innovation will be broadly needed across all aspects of the agricultural and food supply chain to provide safe and nutritious food to meet demand in coming decades. As Dr. Ruben Echeverria, chair of the Commission on Sustainable Agriculture Intensification, contributed in an op-ed for The Hill, innovation must come from “institutions, practicality, technology, financial, and political” channels. We’ve seen examples of all these during the current crisis as innovators rose to opportunities.  

The world will experience many years of innovation compressed into the next two years as industry scrambles to interpret signals of change coming now and after COVID-19. Disruptive innovation will occur across our entire industry and be driven by indicators we have witnessed the past months. 

Necessity Driving Adoption: Meat Processing + Plant-Based Meats

Consider meat processing. Prior to the pandemic, meat processing was an elbow-to-elbow, labor-intensive industry. When large numbers of meat plant workers and inspectors became ill with COVID-19, plants shut down and modified their processes by installing physical barriers, maintaining social distancing to protect employees prior to reopening. 

This is a classic example of necessity driving adoption. These changes were a short-gap remedy, but the industry must increase innovation velocity to find a more permanent solution to protect employees, while maintaining production efficiencies and keeping prices low for consumers. Will the industry now move faster to employ more robotics, artificial intelligence and machine learning? There are plentiful opportunities for inventors.

Another example of necessity driving adoption may well be plant-based meats, which had been garnering consumer interest before COVID-19 because of its environmentally favored position. Major plant-based meat manufacturers had to quickly pivot to move their supply chain from focusing on food service to retailers during this time as consumers could not find meat in the retailer space. Several meat alternative companies also began offering larger packaging options for buyers purchasing for families. 

It’s too early to predict if consumers will maintain their recent buying momentum of plant-based meats as meat supplies are restocked. Wall Street analysts predict some new consumers will be maintained, but probably not the volumes observed during this crisis. However, these companies will be growing at rates faster than pre-COVID-19 and continue to be of interest to investors and their competitors.

Could Disruption Drive Innovation?

We as humans become more curious when faced with uncertainty. Typically, history has indicated disruptive change is not good for even the best companies until after a crisis. However, we live in a different era, where communication tools are in place to better maintain business remotely. Leaders have been able to guide their employees during this crisis in ways never before witnessed. New product development has continued through this crisis.  

Major food companies report their product development teams have been working in their personal home kitchens, generating new ideas and prototype products that will be quickly scaled-up and launched after social isolation, when we all return to work. Individuals often channel their feelings of stress into a source of energy, leading to creativity. Since more people were confined to their homes and forced to re-engage their cooking skills, we will possibly witness a new surge in entrepreneurial product ideas.

Food Industry: Accelerated Period of What’s Next

Clayton Christensen is renowned for coining a definition for Seeing What’s Next as using innovation theories to predict industry change. The agricultural and food industries are currently in an accelerated period of What’s Next. 

Pre-COVID-19, we saw signals of change as consumers’ interests evolved to plant-based foods for environmental sustainability and non-targeted healthier eating. Post-COVID-19, we’ll see consumers’ increasing interest in healthier eating to reduce stress and inflammation, which will be coupled with concern for personnel safety in farm fields and food plants. Consumers’ needs and wants are rapidly evolving. Companies that quickly evaluate where current products and processes are not meeting jobs-to-be-done will quickly satisfy customers’ historical and immediate needs. 

Finally, entrepreneurial inventors can be more attractive to investors if they are watching strategic choices being made by their competitors. If competitive inventions or technologies are not disruptive, it presents an opportunity for entrepreneurs. This is an emergent strategy, and to make it successful, an entrepreneur must be flexible and quickly gather market feedback on competitive offerings to customize his inventions.  

Albeit some of these changes will be brought about by the tragedy of a pandemic, we are going to witness market solutions that offer greater efficiencies, lower costs, less waste and increased personal safety. The agricultural and food supply chains will need investment to make this happen, but we must be better prepared for future pandemics and to fulfill the growing demands on our food supply.

Final Thoughts 

Thank you for reading this month’s perspective. These are the views and opinions of the NCFIL Executive Director and may not reflect the opinion of others at NC State University. We welcome your feedback and perspectives.

Plant-based food innovation will maintain its momentum after COVID-19, so let’s talk about how NCFIL can collaborate with you, using jobs-to-be-done theory and design thinking for new ideas. We can help you bring ideas to market!