Food & Beverage faces an uncertain future. By Dr Clive Black

June 7, 2020 5:49 pm
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The global food system has been subject to an enormous external shock through a broad based closure as a result of the Coronavirus crisis. Whilst the institutional component of the industry remains active – hospitals, military establishments and prisons – the vast bulk of the commercial Food & Beverage (F&B) sector has been closed down. With unlocking starting to come through, how might the commercial environment change?

Lockdown boost Retail

Well, the knee-jerk reaction to this question is quite a lot, with numerous moving parts likely to conditions the prospects for a channel that until the Coronavirus crisis emerged accounted for approaching 35-40% of all the calories consumed in the UK. We estimated that ratio fell to about 10-15% upon full lockdown, maybe presenting sitting at 15-20% presently as elements of the channel unlocks, for example, motorway service stations and drive-thru Quick Service Restaurants (QSRs),

Whilst the re-emergence of the take-away sub-channel is welcome, there remain major problems for the sit down F&B segment to cope with in respect of both prevailing social distancing guidance and the greater caution that we feel the vulnerable and a sizeable risk averse population may wish to expose their lungs to in the future. That risk averse community could be very considerable, noting the number of folks wearing face masks and eschewing close contact.

Trading in a socially distanced world?

The problem of social distancing means that many establishments – cafes, public houses and restaurants – are likely to remain closed for some weeks yet, so continuing to pressurise the finances, particularly of the sole proprietor and small family business. What is more, once permitted to re-open, then the sales densities that will ensue are likely to be notably lower; the experience of JD Witherspoon, in particular, could be particularly noteworthy in this respect, where one wonders if drinking whilst standing will be permitted as opposed to sit down and table service only?

In addition to lower sales densities, the sector must also face into higher operating costs from more frequent cleaning regimes to the provision of hand santiser, not a low cost commodity it should be said, through to face masks, gloves and protective screens. Lower sales densities and higher costs are rarely a plus for the economic characteristics of an industry.

A sector to be rationalised… 

One also has to wonder just what size the F&B channel will be in a year or two; it is hard not to believe that it will be significantly rationalised from the quiet disappearance of individual outlets to over-sized and over-leveraged chains coming to terms with new realities. I have noted that both the Carluccios and the Casual Dining Group will emerge smaller than when they went into administration; more is set to follow.

If the sector has to wait until an effective vaccine for COVID-19 is available before it can realistically expect to return to anything like pre-Coronavirus crisis trading intensities, then the nature and extent of the industry is likely to be all the more challenged. In the meantime, a channel that is highly effective and exceptionally efficient will need to explore new ways of doing things and different organisational compositions to survive and thrive in the evolving but smaller market.

“One also has to wonder just what size the F&B channel will be in a year or two; it is hard not to believe that it will be significantly rationalised from the quiet disappearance of individual outlets to over-sized and over-leveraged chains coming to terms with new realities.”

Big brands will be fine

Big names in the channel, from Greggs on the high street through to Costa (Coca-Cola) and Burger King, can be expected to survive and be effective in the restricted markets and the ensuing economic downturn, so gaining market share; big brands have emerged through this crisis more relevant in most consumer markets. What may be lost, however, is a myriad of arguably more distinctive, authentic, individual and ultimately entrepreneurial entities, where through no fault of their own, their commercial legs have been taken away.

Can price rises accommodate?

In a rationalised market, with higher costs and lower sales densities, it is not unreasonable to anticipate scope for higher prices in F&B. Whilst so, whilst necessary in many cases, Retail is expected to remain competitive, as the superstores learn the lessons of the past when it comes to competing with the German discounters, whilst post-furlough one has to worry about the levels of employment, consumer confidence and so the capability and appetite for many households to engage in discretionary consumer expenditure.

The move to the suburbs

More broadly, lockdown is transforming Britain’s labour process, with millions of folks now working from home. Whilst many will, hundreds of thousands, maybe a million or more, folks will not be commuting to town and city centres again, so leading to a shift in calories not only form F&B to Retail but from urban centres to the suburbs. Doing so, will benefit some F&B chains, but the district supermarket is more likely to gain, as to online retailing.


Coronavirus is a very unfair virus for the British F&B industry, one that is going to be an undoubted threshold in the channel’s history. It looks new and more challenging times are ahead, times when the right culture, an attention to detail and the capability to effectively execute change are vital. These are the traits that Coriolis focuses upon, day in, day out.


Dr Clive Black

Senior Advisor

Corilois Consulting


June 2020.

The UK food system – Coronavirus’ legacies. By Dr. Clive Black

May 4, 2020 2:47 pm
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The World has been severely jolted by Coronavirus. Bio-security has come to the fore like a science fiction novel. In the space of five month this invisible bug has taken a firm hold. For the food industry Coronavirus is likely to leave a quite indelible mark, which will be a notable threshold in the industry’s history.

The hidden curriculum 

The official and unofficial behavioural change from Coronavirus is startling. Who would have thought that virtually the whole of the British Isles and Continental Europe could be kept house bound with incredibly low levels of non-compliance! That compliance to official guidance and the messages therein may have considerable implications for how society, and so the UK food system, emerges from the Coronavirus crisis.

Alongside very high compliance it appears that anxiety towards post-lockdown is high as the UK Government explores its strategy and communications for the next phase of the crisis. Indeed, those clamouring for an exit strategy – the BBC, the Opposition parties and elements of commerce – may be hushed somewhat when they see an Ipsos poll suggesting that c60% of Britain’s are anxious about relaxing lockdown whilst Opinium in The Guardian cite such levels of concern at over 80% with less than 10% of the poll happy to see pubs re-open.

Structural change for HORECA

Such attitudes are crucial to the prospects of the UK food system. Prior to lockdown about 35-40% of calories consumed in the UK emanated from the food & beverage (F&B) or HORECA (hotels, restaurants & catering) sector. Since lockdown such out of the home calorific intake has retrenched largely to the institutional market of care homes, hospitals and prisons, so maybe 10%+. Accordingly, the retail trade has benefited from the switchover, more of which a little later.

How unlocking goes in the UK is going to be key for the HORECA sector and three big challenges are ahead; a) social distancing for workers in often galley kitchen conditions, b) social distancing for customers and c) the propensity for the customer base to consider the return to the bar, cafe, coffee shop or restaurant, never mind night club or football stadium?

As such, it feels like it will be sometime before the British will be consuming c37.5% of its calorific intake outside the home, which implies considerable operational and structural change for F&B providers, many of which were far from financially robust prior to lockdown, their supply chain and the landlords that owned their property.

“The one clear area of the grocery trade to benefit from the behavioural changes driven by Coronavirus is online. It took over twenty-three years for the industry to reach an online grocery participation of seven per cent. Through a little more than eight weeks, Sainsbury’s has recorded c15% participation, driven by larger basket sizes (c50%) and a doubling of capacity.”

Re-born supermarkets

Those switched calories from F&B are expected, as alluded to above, to switch to the retail segment, which is good news for supermarkets and their supply chains. Whilst this is so, there are also notable moving parts within these components of the food system too.

Coronavirus has been a boon to large and small stores alike and also the online grocery channel. The squeeze in retail is the food-to-go and food-for-now segments, and here the challenges could also be structural. Coronavirus has led to a structural change in home-working, facilitated by technological change, that is likely to see a notable reduction in commuting.

It is also likely that business travel will be structurally lower in future years as executives eschew the aeroplane whilst technology, again, has reduced the need for marginal and nice to have journeys. Airports, bus stations and railway hubs are likely to see lower footfall with more home-working, which will weigh down on the impulse food market.

Nervousness about being in crowds and home working is, therefore, likely to result in a switch from calories consumed in urban centres to the suburbs, so boosting neighbourhood stores like the Co-op, Londis, McColl’s and SPAR. Equally, with social distancing in-tow, basket shopping, which has been a key feature of the UK grocery market in recent years, maybe partially, perhaps notably, offset by trolley shopping; the latter of which bolsters the relevance once again of superstores (albeit hypermarkets with their large non-food areas may still be a little skew-whiff from a magnetic perspective) – the functional benefits of the large and suburban stores means that the German discounters are not quite at the heart of lockdown retailing albeit they are not going away.

Online moves to the right

The one clear area of the grocery trade to benefit from the behavioural changes driven by Coronavirus is online. It took over twenty-three years for the industry to reach an online grocery participation of seven per cent. Through a little more than eight weeks, Sainsbury’s has recorded c15% participation, driven by larger basket sizes (c50%) and a doubling of capacity.

For the elderly, switched onto digital through necessity by family & friends, and the vulnerable, now prioritised by the supermarkets, the online channel is new and here to stay. Hence, there would appear to be a shift to the right for food and non-food channel participation, maybe from c7% to 10%+. The supermarkets are likely to harness this growth given the capacity constraints experienced at Ocado, with its more rigid centralised business model.

Chrissy Hynds of Pretenders’ fame proclaimed that ‘somethings change, some stay the same’ and this feels apt with respect to Coronavirus and the UK food system. Post-lockdown many folks will shrug the bug off and go about life with gay abandon. However, and here’s the change, many will not. For the F&B sector and its supply chain this is a structural challenge that is likely to reduce the run-rate of growth, which was approximately twice that of retail for some years, and so demand and therefore supply.

For retail there is likely to be some beneficial switching, which will increase ongoing demand in an industry where supply is growing very modestly – circa 1% per annum – but with considerable moving parts in the form of lesser food-to-go and basket shopping over neighbourhoods and trolleys. The clear ‘winner’ channel wise is online, which is going to go through a gear.

Costs, cash and focus…

Time will, of course, tell us what the real legacies of the Coronavirus crisis will be. For business, the nature, duration and extent of UK Government support is going to be important to the failure rate in F&B and so the emerging structures that the distorted market economy produces. For retail, it has been rejuvenated, a key sector with key workers, central to feeding the nation and preventing social breakdown, on which we gained glimpses in unedifying stockpiling in March.

One senses that very tight cost control and cash management are going to be centre of attention for operators in the British food system here on. Maximising the potential of operations at the coal face is where Coriolis excels. As the freeze thaws I wish to you all well in these truly unprecedented times.


Dr Clive Black 

Senior Advisor to Coriolis Consulting 


May 2020

A Long & Dark Shadow. by Dr. Clive Black

April 13, 2020 9:40 am
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The news is very harrowing. The news is incredible. The equivalent of a small village each day in the United Kingdom (UK) is in effect being lost to a virus few, if any, had heard of six months ago; a  biological entity that, if we believe perceived wisdom, mutated from bats for human consumption bought in wet markets in and around Wuhan. A failure of the food system, a bio-security malfunction, is literally causing global grief.

‘Coronavirus’ is the word of 2020. It may turn out to be the word of this third decade of the twenty-first century. It will take some weeks and months to know whether or not the UK will be emerging from the dramatic lockdown policy of the Government and in what state. In the meantime we must hope and pray that the fatalities level off and fall back as soon as possible and that a mix of mass-testing plus the race to treat and vaccinate truly means that this virus is beaten down.

Pride in public servants

In the meantime, our NHS has been a triumph, once again. The bravery, commitment and kindness of its front-line workers is something that may just need to be re-appraised by society – that thing that Prime Minister Boris Johnson suggests exists in stark contradiction of the conservative thought-leader of days gone by, Margaret Thatcher – Government and taxpayers. Social care workers may also need to be reassessed at a societal level too, folks who also have shown immense courage in looking after the basic needs of the elderly and vulnerable day in, day out, often in this crisis with little or no viral protection.

It is easy to criticise the Government for policy and outcomes through this crisis. Some, like the BBC, have all to often been mouth pieces for the noisy self-publicists with few solutions to palpable problems. Whilst so, constructive criticism has its place and it is clear that some public bodies and servants have struggled with this crisis, even taking into account the incredible speed and magnitude of developments.

In the main patience and support remain the order of the day though as testing regimes, protective equipment, ventilators and the search for the vaccine emerge; we should perhaps reflect that a lot has been achieved in a short period of time and the delivery side of matters now seems to be coming through, to the credit of all involved.


Applause for the British food system

Another band of heroes in the midst of the crisis is the UK’s food retail system, which has moved mountains, literally in volume terms, to serve the public, to feed the nation as the Government decreed. In this respect, appreciation also needs to be expressed for its front-end workers, exposing the welfare of themselves and their families to the public day in, day out.

The speed with which the supermarkets raised distributive capacity and introduced protective policies and structures, such as check-out screens, has been amazing. Nielsen recorded a c45% increase in trade in the week to the spring solstice; a quite amazing achievement for events no one knew of a month earlier (especially for an industry running at a prior growth rate of c1%).

The grocery supply chain has also proved a wonder in meeting the demands of a worried public first craving household medicines and loo roll before moving onto lines across the store, noting the considerable step-up in demand for frozen over chilled foodstuffs in particular. Production programmes have been rationalised as the manufacturers have focused upon output and unit efficiency.

“Another band of heroes in the midst of the crisis is the UK’s food retail system, which has moved mountains ……. to serve the public. ….appreciation also needs to be expressed for its front-end workers, exposing the welfare of themselves and their families ………day in, day out. “

A thought for F&B

Whilst the grocery retail segment has risen to the challenge of the step up in demand, the domestic food & beverage (F&B) segment has massively contracted. From supplying 35-40% of the calories consumed in the UK, the F&B segment has disintegrated down to the institutional element of the market, so hospitals, homes and prisons, which is maybe 10-15% of national intake.

So, whilst the supermarkets have been seeking to safely accommodate a step up in the demand for calories to be consumed at home, the F&B trade is in crisis. Indeed, with the days brightening, the industry is going to lose out, more or less, on the second biggest family gathering event and so food consumption peak of the year, with the near cancellation of Easter; literally millions of chocolate eggs are searching for an expedient home at this time whilst the freezers will also be full of lamb’s legs.

Accordingly, chains like Greggs have closed their 2000+ stores, many thousands are being furloughed through the Government’s amazing news support mechanisms, whilst those businesses that can are exploring liquidity support; somewhat unedifying though are the likes of JD Wetherspoon, which is seeking not to pay its suppliers in stark contrast to Morrisons, which is paying its small suppliers immediately. The scale of the Government support is eye-watering, but so very much appreciated and necessary at this time.


A seismic economic jolt

The cost to business and the wider economy of the Coronavirus crisis is, of course, quite enormous. In fact we cannot imagine the length and depth of the shadow that the Coronavirus shut down means for the British economy. There will be a collapse in Q2 Gross Domestic Product (GDP), something record making, and that hit may last for sometime still. Whilst the new Chancellor of the Exchequer is justifiably acclaimed with much praise for his many helpful and imaginative policy actions, it remains the case that Coronavirus is going to cause enormous collateral damage to the economy, including, perhaps most particularly, F&B.

Many businesses, like households, live from week to week, and so the steps already announced by Government and the retail banks are unlikely to prevent much collapse with corresponding distress thereafter. Accordingly, one has to hope that policy can be grand and flexible enough, incorporating the major banks and other lenders, to show enough patience, forbearance and care to also nurse the British F&B sector, and the wider economy through this crisis.

The numbers involved in stabilising the economy redefine telephone directories. The consequences of the crisis for Government finances, future business activity, welfare support and taxation are at this time simply mind blowing. However, just weeks into the Johnson political era a virus from inland China is perhaps going to characterise his parliament. Let us hope that on the other side of the crisis that the lessons are learnt and the economy can show commendable ‘bouncebackability’.

When that time comes, Coriolis Consulting, with its structured, focused and pragmatic approach to meeting business’ operating challenges, will be more relevant than ever in assisting food businesses on how to be best prepared to face into the challenges and opportunities posed by the market.

In the meantime, I simply wish everyone and their families safety and wellness at this difficult time.


Dr Clive Black

Senior Advisor to Coriolis Consulting


April 2020

Biology Matters. By Dr. Clive Black

March 3, 2020 2:50 pm
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What a year it has been. On the third day of the new decade, the world was worried about the potential for Iran and the USA to engage in some form of military confrontation. As such oil prices spiked, fears were expressed for what potential conflict could do; everything from regional (Middle Eastern) stability to the knock-on effect of strong oil price inflation.

The first day of March 2020 sees the world engrossed in Coronavirus, a seemingly zoonotic organism that has revealed the true nature of globalisation; oil prices have fallen from over USD70 a barrel to under USD50.

From Wuhan in Central China, Coronavirus has brought epidemiology to the British tea-time news. China has seemingly effectively contained Coronavirus at first base it seems, albeit drastically curtailing activity in one of the world’s powerhouse economies.

However, China is no longer the prime focus of attention for the healthcare profession as the virus has spread from its origin, akin to a scene from a modern day science fiction movie. Iran, Italy and South Korea have been the second base locations for a virus that is now inhabiting every continent where humans naturally live on the planet. Whether the virus can be effectively contained in these countries remains to be seen, not doing so is likely to be very disruptive to global supply chains, potentially materially constraining GDP growth.

Indeed, record high valued stock markets have already discounted GDP growth in H1 CY2020, with a bout of investor irrationality also taking hold, the spread of fear for economic activity and corporate earnings matching the fast spread of the virus itself. With the near close down of China in January and February, Q1 and Q2 economic growth are likely to be notably debilitated. The wider question though is what of the rest of the year and wider waves from Coronavirus?

“…the spread of fear for economic activity and corporate earnings matching the fast spread of the virus itself”

That outcome will be determined by the spread of the virus; we may look back and think much ado about nothing, particularly if a vaccine can be identified promptly; there is a genuine race out there in the healthcare world, where the noises from Israel are most encouraging. However, is third base places likes Essex where epidemiologists are struggling with a case with no seeming links to bases one and two?

Whilst we may, therefore, in a best case scenario, look back at Coronavirus as a notable hiatus, more intense and challenging than SARS, there could yet be notable implications for what has been relentless globalisation. Indeed, we would imagine that following on from SARS, with African Swine Fever, a horrible high mortality disease going through the Chinese pig sector like a dose of salts, and now Coronavirus, global capital allocators may be starting to re-think ‘China’.

Whilst not at the forefront of the UK food industry’s minds, perhaps, businesses like Carrefour, Tesco and Wal-Mart, which procure a lot of general merchandise and apparel from Chinese suppliers will probably be asking the question of future geographic dependency, which could kick favourably into South-East Asia, MENA and maybe the southern and eastern periphery of Europe but hit China. Equally, as we have seen with firms from Apple to Jaguar-Land Rover, supply chain structures and compositions maybe re-visited, supporting the phenomenon of shorter supply chains and maybe even more on-shoring?

For financial markets, Coronavirus exposes a chronic challenge for policymakers. The EU, particularly Germany, was already economically  challenged by the Sino-American trade disruptions, hitting its manufacturers and regional growth. As such policymakers were reflecting on how to support the EU economy, as was the Bank of England at the turn of the year with respect to the UK’s economic momentum after flat data.

The big challenge for central bankers is that their tool kit is pretty bare; interest rates are uber low and quantitative easing (QE) has had a very partial positive impact, benefiting bankers more than voters. As such, it is governments, through budgetary and fiscal policies which can be expected to be more active and effective if changes are necessary; albeit quick fixes tend to be challenging to be effective in their own right. The UK Budget is also likely to be conditioned by current developments.

Coriolis Consulting

So, Coronavirus is yet to be thoroughly understood and whilst China has actually shown a strong position in containment, to its credit, it is too early to call the rest of the world. The economic legacy of Coronavirus maybe much greater than its current impact, especially if a vaccine is identified. Rather, the legacy of this disease maybe its impact upon commercial and economic globalisation, as businesses think about the next phases of supply chain optimisation.

Such thoughts could be an existential challenge to the Chinese. Equally, other geographic regions may yet gain the backwash of any new strategic thinking. For UK businesses, particularly in manufacturing and long-time supply chains, so clothing and general merchandise retailers, such thoughts are likely to be current, their outcome relevant to the development of both the domestic and global economies.

Bio-security is so basic and essential, any high risk food business clearly understands this fact. When bio-security breaks down, it is hugely disruptive, again as food companies know. When bio-security breaks down in the world’s largest economy, it is a different scale of issue, a game changer. We are now about to learn if the rules of engagement are about to notably adjust; it is impossible to currently call the economic outcome of what has become known as COVID 19; stock markets, admittedly over-boosted by financial liquidity (interest rates that are too low and the hangover of QE) are fearing the worst.

Stay safe.


Dr Clive Black

Advisor to Coriolis Consulting

A brighter future? by Dr. Clive Black

February 5, 2020 7:14 pm
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The UK has formally left the EU.

It has been like drawing teeth reaching this point. A fed up nation arrived at the point that many if not most British just wanted in or out but not the destructive and wasteful Mr. In-Between. The relatively low key commemoration of Brexit, in this respect, is appropriate as it reflects the terrible behaviour of the House of Commons but also respects the fact that 48% of the country’s population voted to Remain.

The paralysis of the House of Commons, particularly in CY2019, was a disgrace. Some may argue that Westminster was reflecting the narrowness of the EU vote and that it was totally appropriate for those against leaving the EU to use all the tools at their disposal to do so.

Whilst so, and they did, those folks, euphemistically calling for the People’s Vote, were also anti-democratic, revisionist and at times, guilty of incredible arrogance; old and poor people voted to Leave because they were too thick to know anything different.

A new politics 

The General Election put paid to The People’s Vote and the revisionists at Change UK and the like. It has also caused an existential debate within a massacred and out-of-touch Labour Party whilst the demonstrably non-democratic and lunatic Liberals fell-over.

Whilst the Tories succeeded in England and Wales, to their glee, it should not be forgotten that the Scottish Nationalists excelled through the first past the post system whilst the Irish Nationalists and Republicans also did well; the DUP somewhat humbled.

“The paralysis of the House of Commons……..was a disgrace”

Time for some grace

The new Parliament is now charged with taking the UK out of the EU. After a period of bitterness, disagreement and rancour, that led to damaging political dysfunctionality, particularly for business and the consumer economy, it is now the time for calm, grace, respect and the art of mutual kindness.

Our future relations with not just the EU but every nation, from a trade perspective, cannot be set within the context of ‘win’ and ‘lose’. The UK needs an appropriate trade agreement with the EU and vice versa. There will be disagreement but proportionate, reasonable and fair outcomes need to prevail to permit economic growth. Will this be the outcome? Time will tell.

Can green shoots grow?

Ahead of the noise to come…, grace was not evident from the Irish Taoiseach’s threat to the City of London if the UK prohibits EU fishing boats from our waters, the British economy is showing some green shoots of increased activity following the December General Election. Data-points include the Services PMI survey, which notably beat forecasts  (the UK is an 85% service economy) and the GfK NOP consumer confidence data that has risen from minus 14 in November to minus 9 in January.

Whilst encouraging, it remains early days in the Johnson regime. The March 11th Budget will be an important event to underscore or otherwise the scope for an improvement in supply side policies to help modernise, grow and rebalance the British economy. There is current hope that the policies announced will help to contribute to a step ahead in both business and consumer confidence, which will make a difference to activity and growth, including the food industry. Again, though, time will tell.

“In a still subdued UK retail grocery market……. cost structures, tight working capital and broader cash management are also likely to remain key priorities”

Coriolis’ relevance

Ahead of all this, I sense that business will be thinking about how their products meet evolving food markets, particularly around the well-being and sustainability agendas. In a still subdued UK retail grocery market, where well-being and sustainability mean less volume, cost structures, tight working capital and broader cash management are also likely to remain key priorities; it feels, in the main, too early for many to be opening the cheque book to major expansion.

In these business management respects, Coriolis has a skill set that focuses upon culture, process and practice that I think is relevant to the current trading environment facing the majority of the British food system. With good policy-making, at home and with the EU in the first instances, and maybe ongoing improvements in confidence, Coriolis can also contribute to more growth strategies to come. We live in hope.


Dr Clive Black

Advisor, Coriolis Consulting

February 2020