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FEBRUARY 7, 2020

Coronavirus: How it is Impacting the Foodservice Industry

By: Kim Lorang


We've all seen the warnings about Coronavirus, and while many of us see it as only a health epidemic, the impact to the foodservice industry is widespread. Not only does it bring to the forefront the importance of keeping workplaces healthy, but because the closings of factories in China, it directly impacts those who manufacture products there, as well as those who purchase those products.


According to the CDC, the Coronavirus (2019-nCoV)is a respiratory virus first identified in Wuhan, Hubei Province, China. This virus most likely originated from an animal source ,but now seems to be spreading from person-to-person. It’s important to note that person-to-person spread can happen on a continuum. Current symptoms reported for patients with the virus have included mild to severe respiratory illness with fever, cough, and difficulty breathing.


As the death toll passes 600, and the number of people affected has grown to roughly 31,000 worldwide (with the majority of the cases being reported in China), it is important to note that the virus is not expected to cause a health crisis here in the United States.


The Coronavirus Affect on Foodservice Equipment and Supply Manufacturers, and Beyond

For many foodservice equipment and supply manufacturers, the Coronavirus is worrisome beyond the tragic health aspect. Those that manufacture products in China are experiencing negative effects, as product production comes to a halt, thus creating shipping delays for Dealers, as well as the restaurant operators in need of supplies and equipment. Keep in mind, it is not only the company's manufacturing whole pieces of equipment that are being affected, but also manufacturers who build their products in the US using parts that come from China.


Make no mistake, the Coronavirus virus is having a critical effect on our industry, on a global scale.


The desire to harbor safe, healthy workplaces for employees in addition to the need to serve their customers well is being challenged, with many businesses having little choice but to wait it out and see how the cards fall.


In order to fully understand the current impact Coronavirus is having in China, it is important to get a little backstory on what operating a business in China typically looks like this time of year.

Each year around the last week of January, and sometimes for as many as three weeks, factories shut down for the Chinese New Year, giving employees the opportunity to go home to spend time with their families.


With factories located in remote locations, many factory employees live “on-campus” on the factory grounds in apartments, where food and medical are also provided.


This alone creates a challenge for US manufacturers operating in China, as they're tasked with ordering a surplus before the factories shut down each year, so that order fulfillment is not affected.


In addition to the logistics of ordering and then storing that equipment, another reality of this is that many manufacturers can see a 10-15% dip in returning employees, as some end up finding work closer to home when they go back for Chinese New Year.


Because of the Coronavirus, all businesses were told to extend their Chinese New Year shutdown for at least one additional week, leaving manufacturers powerless during a time in which they are often inundated with the game of catch-up that normally comes from closing their doors for weeks as the holiday is observed.


While some companies may have enough stock to get by, other companies are experiencing devastating financial effects.


Currently, manufacturers have been told they are looking at a re-opening date of February 10th. Final confirmation on the re-open date is expected to come this Saturday. If there is a decline in people affected by the Coronavirus, doors are likely to re-open as planned, but if there is an uptick in cases, or potentially even if the numbers are stabilized but not declining, the shut down period may be extended. 


Aside from the obvious financial strain shutting down factories causes, many employees are being paid for the time they are not able to return to work, further exasperating the financial strain on US foodservice equipment and supply manufacturers operating in China. There also may be a larger decrease in returning employees this year, as people are worried about traveling back to work while the outbreak continues.



The Rush for a Cure

While no cure has been found for the Coronavirus yet, scientists are rushing to come up with a treatment.


The Bill & Melinda Gates Foundation has committed up to $100 million for the global response to the Coronavirus. The funding will help strengthen detection, isolation and treatment efforts; protect at-risk populations; and develop vaccines, treatments and diagnostics.


Limiting the Spread of Illness in the Workplace


While we hope the likeliness of the Coronavirus spreading through US workplaces is small, it is important to remember that limiting the spread of illnesses in general is always best practice. Here are some ways to keep your workplace healthy:

  • Hand Washing: We all know that hand washing (for at least 20 seconds) is the best way to prevent the transmission of illnesses. Remember to do so often, particularly after shaking hands with others, or touching things in common areas such as bathrooms, kitchens, and meeting spaces.

  • Hand Sanitizer: Consider keeping hand sanitizer in common areas to encourage use.

  • Frequent Cleaning: Wipe down frequently touched items, such as doorknobs, cabinet and drawer handles, and arm rests.


Due to the high volume of hourly workers in the foodservice industry, employees staying home when sick can become difficult.


When an employee knows that staying home will result in loss of pay, hourly workers are more likely to aim to get through a workday, whereas salaried employees with sick days available would more easily decide to call in sick.


One way managers can encourage employees to take care of themselves is by being supportive of them staying home when they're sick (in turn keeping germs out of the office). Managers can work with hourly employees such as servers, hosts, bartenders, etc. to try to make up some of their lost hours.


When possible, hourly workers in office settings may be provided with ways to work from home. If an employee has a laptop, perhaps they can do work at home easily, and if they do not have one, consider providing them a loaner laptop (if available) so they can keep their distance without the added stress of losing income.


The outbreak of the Coronavirus brings to the forefront challenges we face in a global economy. 

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