COVID-19 Impact on Pharmaceutical Packaging in Chemicals and Materials Industry

COVID-19 Impact on Yeast in Food and Beverage Industry

  • Food & Beverage
  • Jan 14, 2021

COVID-19 Impact on Yeast in Food and Beverage Industry

The COVID-19 pandemic has significantly affected the food and beverages industries across the globe. The outbreak of the COVID-19 has highlighted the importance of the food industry for security of the global population and society. Worldwide, countries are expecting drastic decline in purchasing power of the consumers particularly in low- and middle-income countries due to of loss of income, shutdown of businesses, and thereby breakdown of food markets due to both demand shocks and supply constraints.

Major yeast companies are focusing on healthier product development to promote people’s health and wellbeing by reducing salt content, cutting saturated fats and reducing sugar. People suffering from lifestyle disorders such as diabetes and blood pressure are more likely to suffer from COVID-19. Thus people are becoming more health conscious and started adopting healthier lifestyle and nutrients in their daily meal.

With increased time at home and shutdown of the food outlets outside, a rediscovery of baking and making bread took off across the globe, which is driving increased demand for yeast as compared with pre-COVID-19 levels.

On the other hand due to outbreak of COVID-19, the yeast market has been facing some issues with streamlining all the of the supply chain work streams from production to the delivery of the yeast, which is expected to restrict the growth of the yeast market during this pandemic period. Additionally, consumers will be more focused on building higher immunity level during and post-crisis situation which will shape the market of ingredient producers.

COVID-19 MAY LEAD TO DRASTIC REDUCTION IN CONSUMPTION OF BAKERY PRODUCTS

The COVID-19 crisis has hugely affected on the demand of bakery products. The spike in the demand for yeast during early days of the pandemic has seen as due to lockdowns across the globe, people with more time at home.

Thus, consumers are baking it in home instead of buying bakery products from market. Manufacturers are started introducing healthier product portfolio in the market to overcome this challenges.

For instance,

  • Associated British Foods plc products under DON business continues to reduce the salt content of their products, and started adding a ‘smiley’ label on low-salt products that it will designed to appeal to children, while ABF Ingredients business Ohly has launched natural, yeast-based ingredients which enable consumers to reduce the content of salt in their recipes by up to 30%.

In New Zealand, Tip Top’s Fruit Bread reformulated product with no added sugar. Additionally, Speedibake, the U.K. Grocery businesses has reduced sugar across all its

  • products since from 2015. By an average of 37% of the sugar get reduced which is equating to 1,700 tons per year.

Several manufactures are actively lowering the fats and making sure that they avoid additional increase in the fat content.

For instance,

  • Jordans Dorset Ryvita is reduced 60% of the saturate fat content by replacing palm oil with sunflower oil. All these factors are likely to provide healthier growth for bakery products during COVID-19 pandemic.

FLUCTUATION IN THE DEMAND OF WINE ACROSS THE GLOBE DURING COVID-19 PANDEMIC 

Key players operating in the Wine industry has been facing major hit due to outbreak of COVID-19 across the globe. Market is majorly driven by closure of key sales channels outside retail and shutdown of all e-commerce services across the globe due to precautions measure taken by government to combat COVID-19 situation. WHO recommends physical distancing as a protective measure which resulted into shutdown of Bars, Casinos, night clubs, and restaurants that in turn hampered the growth of wine industry.

For instance,

  • Treasury Wine Estates reported 13.9% decline in EBITS in Asia, 15.6% decline in EBITS in Australia and New Zealand and major decline in America with 36.9% in EBITs.

On the other hand consumers were in hurry to having boxes of wine shipped to their homes when lockdowns were started across the globe due to outbreak of COVID-19 but now it seems consumers are using services such as Drizly (alcohol E-commerce platform) for ordering alcohol at the home.

Consumers are drinking more often at home as it provide platform for them to drink anytime. Additionally, various restaurants are nowadays following social distancing norms thus, for some period of the COVID-19; market shows positive impact on the wine industry.

DECREASE IN PRODUCTION OF BIOFUEL DUE TO COVID-19

Biofuel is made up of various types of feedstock including starch, sucrose, lignocellulosic and algal biomass by the process of fermentation via microorganism called yeast. Thus, growing demand of biofuels across the globe is boosting the growth of the yeast market. But as all aspects of the business have impacted biofuel market has also affected by outbreak of COVID-19.

COVID-19 pandemic has resulted into shutdown of all the outdoor activities for some period of time which has shown negative impact on the consumption of the biofuel among the consumers. As per International Energy Agency report Global transport biofuel production in 2020 is expected to be 144 billion liters (L), equivalent to 2 480 thousand barrels per day (kb/d) that is 11.6% drop from 2019’s record output.

When compared to others, diesel is less affected, as the transport of goods accounts for a substantial proportion of its diesel usage and the COVID-19 crisis has had a smaller effect than personal mobility. Drastic reduction in the export of the biofuels has seen after the restrictions have been imposed by the government on international trade.

FIGURE 1.    EXPORT OF BIOFUELS ACROSS THE GLOBECOVID-19 Impact on Yeast In Food and Beverage IndustryFIGURE 2.    CONSUMPTION OF BIOFUEL ACROSS THE GLOBECOVID-19 Impact on Yeast In Food and Beverage IndustryGLOBAL RESTRICTIONS ON MOVEMENT OF GOODS AND PEOPLE HAVE HAMPERED THE SUPPLY CHAIN OF YEAST

The COVID-19 economic crisis has also affected the supply chain of yeast industry. The government restrictions on movement of goods and people and breakdown in any part of the supply chain – from farmers to suppliers, processors, distributors, and retailers can break entire supply chain of yeast. Global lockdowns have resulted into labor shortages, restrictions on logistics, and food security issues.

Yeast industry has facing problems right from the collection of raw material that is molasses to the delivery of yeasts to the end consumers. Drastic decline has been seen in the production and export of molasses in 2019 and 2020 as compared to past years due to disruption of the supply chain.

FIGURE 3.    EXPORT OF MOLASSES ACROSS THE GLOBECOVID-19 Impact on Yeast In Food and Beverage Industry

FIGURE 4.   PRODUCTION OF MOLASSES, SUGAR BEET AND SUGAR CANE COVID-19 Impact on Yeast In Food and Beverage Industry

GLOBAL IMMUNE HEALTH SUPPLEMENTS MANUFACTURERS: PERSPECTIVE & INITIATIVES

“When Primark’s stores were closed in March, and with no certainty as to when they could be reopened, immediate steps were taken to secure the liquidity of the group with an increased focus on central cash availability.”

  • John Bason, Finance Director, Associated British Foods plc

“We are all going to restaurants at some point but the unknowns and the uncertainties are the things that are killing us, that are eating at us. This is bad but it is not the worst thing that has ever happened… if you think back to the 20th century and all the terrible things that have happened, World War I, World War II, the Great Depression and Prohibition of course, the stock market crash of ‘87, 9/11, 2008 financial crisis, what happened after every one of those incidences? We came back, and we didn’t only come back by the way, but we came back with vengeance, the stock market went past its previous high every single time.”

  • Michael Skurnik, Founder of Skurnik Wines and Spirits

“The tariffs for restaurants have been really scary and how to do business in that type of environment is something we were wrestling with… obviously it depends on what people like to drink and where those habits are and those are waves we have surfed before. I think when you look back at it and you would think of all of those things that seemed like big challenges but in reality they weren’t.”

  • John Ragan, Director of Wine and Restaurant Operations at Union Square Hospitality Group

CONCLUSION

COVID-19 pandemic has affected overall global population as well as economy. 2020 has been as unprecedented year. Economic slowdowns, global lockdowns, and drastic public safety initiatives have resulted from collaborative cations taken by states, public health authorities, and hospital fraternity to combat the Coronavirus. COVID-19 pandemic has shown its effect on every business by one or other way.

Lockdown announced by various governments during March has resulted into disruption of supply chain of food and beverages industry, feed industry and biofuel industry which impacted on the consumption of yeast across the end users.

Additionally, unavailability of man power and raw material supply for production of yeast has been a restraining factor throughout the pandemic period. Consumer awareness regarding hygienic and healthy food and restriction over opening of food malls, retail shops, super market and other purchasing channels for bakery food has restricted the demand of yeast in the market.

On the other hand, growing household activities of cooking and availability of e commerce channels for purchasing yeast has provided lucrative option for the consumers. Majority of the global population have been changing their buying preferences to online or localized buying of food products to maintain healthy diets. Many researchers in the field of yeast manufacturing are upgrading their products with healthier component to sustain in the current situation of the market.