Restaurant Exodus Has Food Giants Rushing to Stock Supermarkets


    U.S. meat packers and dairy firms focus on consumer products

    Many states order restaurants to close dine-in services


By Isis Almeida, Lydia Mulvany, and Deena Shanker, Bloomberg

March 19, 2020


America’s top food companies are rushing to meet a spike in demand as panic buying sets in at supermarkets, with consumers preparing to stay at home -- and eat in -- in ways they’ve never done before.


With coronavirus cases mounting across the nation, meat packers including Tyson Foods Inc. and milk makers such as Dairy Farmers of America are changing the way they produce to supply consumers instead of restaurants. The shift comes as several states shutter dine-in services, depriving food companies of a clientele that in many cases accounts for more than half of their business.


Americans spend more than half of their food budget eating out. With governors from Texas to Illinois only allowing delivery or pick-up services at restaurants and restrictions on socializing, consumers are flocking to stores, picking up everything from meat to milk to pasta and tomato sauce to stock their freezers and pantries.


“If you are geared up to cater to food services, then it’s not just flicking a switch,” said Nick Fereday, executive director for food and consumer trends at Rabobank. “Even the size of the can, it’s not the industrial-sized can of tomatoes that you would put on a store shelf.”


America’s biggest meat processor Tyson is making its “most-significant shift” ever to produce more chicken, beef and pork that’s favored by supermarket shoppers, rather than cuts that restaurants use. Employees are working through weekends to fill as many orders as possible.


Campbell Soup Co. is churning out more cans of its iconic soups, along with increasing output of snacks and Spaghetti O’s, Chief Executive Officer Mark Clouse said this month.


Poultry giant Sanderson Farms Inc. said it is adding Saturday shifts at its five plants that process chicken for grocery-store customers, and is ready to convert two other plants to process more such birds. Pilgrim’s Pride Corp. and Perdue Farms Inc. are also working to accommodate the boom in retail demand...