Looking back pre-pandemic, it’s safe to say that the e-commerce food and retail delivery industry was growing at an impressive rate, with consumers ordering meals and groceries online for the sake of comfort and convenience through apps such as GrubHub, Uber Eats, and others. However, with consumers sheltering in place as a result of COVID-19 and generally spending more time at home amidst varying levels of lockdown restrictions around the world, it’s no surprise that the resulting effects on consumer buying habits have increased e-commerce by an incredible 44% in 2020, as highlighted in a recent report by Digital Commerce 360. It’s also no surprise that this placed a significant demand on the food and retail supply chain to keep up with the spike in consumer demand.
The numbers are quite telling from a commercial performance perspective, considering that in-store retail sales grew from $3.7 billion in 2019 to $4.04 billion in 2020, representing a 6.9% increase. At the same time, e-commerce sales jumped from $598 billion in 2019 to $861 billion in 2020, a staggering 44% increase that Digital Commerce 360’s report attributes directly to the pandemic.
Growth is a positive thing for the food and retail industry. The e-commerce effect of the pandemic has given organizations the ideal situation to embrace new and innovative ways of fulfilling the growing demand for online orders from more discerning consumers who expect high quality and safe goods in shorter times. However, this dramatic increase in the demand for e-commerce, specifically for food and groceries, has presented the food industry with specific and important challenges, from the health, safety, and well-being of essential workers in distribution centers and behind the wheel of the delivery vehicles delivering parcels and packages every minute of every day worldwide to the safe and sanitary transportation of temperature-sensitive grocery items and prepared meals.
The Last Mile
What does this increase in consumer demand for e-commerce food and groceries mean for the “last mile” industry? First, we need to define the “last mile” industry. It is those essential organizations that operate throughout the supply chain process—everything from the ordering of the goods online to resource planning, warehouse staff, fulfillment centers, packaging, and transportation partners, from trucks to drones, on down to the “last mile” of each product’s final destination.
We know that the logistics of transporting and storing refrigerated groceries involves an intricate process to confirm that precise hygiene and safety conditions are met throughout every step of the supply chain, from receipt to delivery at the designated destination.
To highlight the importance of food safety in the last mile industry, Frank Yiannas, FDA’s deputy commissioner for food policy and response, conducted an insightful interview last year on the impact of the pandemic on consumer buying habits. Yiannas said that part of the work involved with FDA’s “New Era of Smarter Food Safety,” an initiative designed to create a more digital, more traceable, and safer food system, involves dealing with the reality of e-commerce as more and more consumers order foods online that are delivered right to their door. “We have been considering what steps we need to take to ensure the safety of those foods in how they are produced, packaged, and transported,” he added. “When we first started talking about this, we were anticipating that 20% of groceries would be ordered online by 2023. That benchmark may have been blown out of the water by consumers sheltering in place. I don’t see that trend reversing when the crisis has passed.”
The Importance of Standards
This insight highlights the need for more to be done to support organizations operating throughout this last mile industry, especially for refrigerated delivery service providers. These providers have a clearly defined business risk management framework that specifies the provisions and operations for all stages, from acceptance of a chilled or frozen parcel to its delivery at the final destination.