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MarketScreener Homepage  >  Equities  >  Mexican Stock Exchange  >  Grupo Bimbo, S.A.B. de C.V.    BIMBO A   MXP495211262

GRUPO BIMBO, S.A.B. DE C.V.

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Grupo Bimbo B de C : How is Canada's food industry coping with COVID-19?

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04/30/2020 | 07:02am EDT
quebec canada flags

COVID-19 may be affecting the world, but there are some distinctive differences in the ways that nations are handling the outbreak and the impacts it is having.

Here, New Food speaks to the Marc Fortin, President and CEO at RCC-Quebec/CCCD-Quebec (Retail Council of Canada), to find out how this North American country is coping.

"The federal and provincial governments are responding swiftly and rapidly," Fortin said. "They are investing into various economical programmes to support businesses and individuals to avoid a complete meltdown of the economy after COVID-19 has passed."

He explained that Quebec, a province in Canada, went through the "heartache" first because of their Premier's leadership wanting to tackle the virus and its potential growth first. In Canada, managing the health care system is a provincial responsibility. “The Province of Quebec has a different legal system and more power than other Canadian provinces. Quebec works on the Civil code like in France, while the rest of Canada works on common law like England,” Fortin explained.

"The school break was around one week before the travel ban" he continued, "meaning citizens were travelling all over and coming back to Quebec with the virus - and it sort of 'exploded'. However, we reacted really quickly, with Quebec becoming the model for all other provinces." In other words, it became a guide to how to respond; what worked and what did not.

Canada supermarket

Similarly to the UK, Canada has implemented measures such as social distancing, with retailers marking safe distances with tape and installing plexiglass at every till point.

Canada is also encouraging regular hand washing with designated sanitising points, which are placed between the inside and outside doors of store interiors.

"Employees are afraid of contracting coronavirus; they want to stay home and benefit from the federal support programme," Fortin added. "This has created a shortage of workers across the supply chain, which, again, is impacting our food and beverage systems."

Panic buying and shortages

Canada is witnessing huge orders from consumers of certain items, including flour, canned meat and fish, vegetables, pasta, rice and chocolate chips. Not to mention the bizarre global toilet roll phenomenon. However, it is eggs which appear to be most in demand.

Fortin suggests the shortages of flour, eggs and chocolate chips are due to a rise in baking among Canadians. The increase in home baking is not unique to Canada, with the UK experiencing a similar trend, most likely spurred on by "parents trying to keep children entertained".

Fortin continued: "There was a second wave of pressure on supermarket shelves following the closure of restaurants, with the demand redirected entirely to retailers. The US border is also under pressure because a lot of our produce is shipped through there. For example, much of our fresh fruit and vegetables in the winter come from Mexico, California, Arizona and Florida.

"Supplies of locally-grown produce such as Quebec carrots and Ontario carrots are sparse come spring, so we are relying on the US and Mexico for those. However, we have a lot of a growers in Canada who are getting ready for the summer season.

"We'll have less choice, but we are not expecting big shortages…as long as Donald Trump does not close the border." Closures will prevent food imports and foreign workers coming to help with farming in the summer, which Canada relies on, and will need to keep up with higher demand.

If transportation remains limited, Fortin envisions that the government will encourage those on welfare to work in the field.

"We might see some increased costs because the Canadian dollar is down versus the US dollar; it will increase the costs of imported raw materials, seeds, fertilisers, fresh produce and finish goods," he continued. "We may also experience a loss in efficiency due to social distancing measures on farm."

However, the most concerning aspect for Fortin is how long this pandemic will last and what long-term affects it will have. "When the winter comes we rely more on imports, but will everything be back on track or will we see countries losing their summer season? It's something that no one can predict."

The future

“Moving forwards, we need to look at the supply chain, identify where we rely on others and where we can be self-dependent,” Fortin confirmed.

"We have witnessed a lot of produce falling to waste that was intended for restaurants; we have begun to compile a list of suppliers by category which we are sharing with our members. It means that they can reach out to these suppliers and have their produce redirected to their stores. It was a nice learning curve, which demonstrated how important local produce is. It made us look for novel methods whereby we can work together and support the ecosystem. I believe the local movement is going to grow.

"We are also looking at how technology can help improve online systems, since seeing a rise in Internet orders and delivery dates that are too far away. Members are going through the evaluation as we speak, with a focus on managing day-to-day."

One solution he mentioned was the use of robots within the warehouse to improve efficiency - a technology which already exists and could be implemented to increase the speed of order marking and delivery to store. Plus, as Fortin pointed out, robots do not contract COVID-19.

Of course, humans will still be required in the warehouse, for example robots cannot currently be used to 'pick and pack', so it would be more of a case of looking at how the two (robots and humans) can complement each other in the future.

Biography

marc fortin
Marc Fortin, President, RCC (Retail Council of Canada)-Québec, has over 30 years of management experience in CPG companies, in consulting and in sectorial non-for-profit organisations. Marc was the owner of consulting firm (StratMk Consultation), President & CEO of NACDA (National Convenience Stores Distributors Association) and President & CEO of DCI (Distribution Canada Inc.), a national buying group for independent grocers across Canada. Marc has also successfully accumulated numerous executive and senior management mandates throughout his career with companies such as Molson Breweries, Kellogg Canada, Maple Leaf Foods, Canada Bread Company and Borden-Catelli. He holds a bachelor’s degree in marketing and economics from the University of Montreal.

© Russell Publishing Limited, 2020. All Rights Reserved., source Trade Journals


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Sales 2020 329 B 15 607 M 15 607 M
Net income 2020 8 018 M 380 M 380 M
Net Debt 2020 107 B 5 046 M 5 046 M
P/E ratio 2020 22,4x
Yield 2020 1,33%
Capitalization 188 B 8 902 M 8 891 M
EV / Sales 2020 0,89x
EV / Sales 2021 0,87x
Nbr of Employees 134 458
Free-Float 30,5%
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