Aryzta announcement provides stark warning to foodservice suppliers, says GlobalData
Swiss-Irish bakery firm Aryzta has recently announced that it expects the coronavirus outbreak to have a “material impact” on its business this year, which will be worrying to other major foodservice suppliers, says GlobalData’s food correspondent, Andy Coyne.
Aryzta is reducing capital expenditure, with all future capex projects suspended. Two smaller plants have closed in Europe and ongoing evaluation is taking place concerning the further shutting of plants and lines.
Andy Coyne commented: “With cafes, restaurants, school and college canteens, supermarket in-store bakeries and a vast number of other foodservice outlets being closed to help stop the spread of the Covid-19 virus, it is inevitable major suppliers to this channel will be facing extremely difficult circumstances and will have some big decisions to make about future strategy.
“It was Aryzta today and yesterday it was US-based J&J Snack Foods warning about the impact on its sales as more and more foodservice outlets close. Meanwhile, Sysco, the US foodservice distribution giant, revealed it has been forced to look again at its business model and has turned its focus onto the retail grocery market.
“With the uncertainty surrounding the Covid-19 outbreak and no indication of when the foodservice channel will be back up and running, a strategic re-think of this kind has to be the order of the day.
“But there must be real fears for the future of foodservice suppliers that can’t readily change their business model.”