In Vietnam, COVID-19 had just subsided for a few months before surging back strongly, with deaths appearing one after another. Domestic businesses had not yet recovered and continued to face significant pressure from the impact of the next wave of the pandemic, especially F&B businesses, which saw considerable changes in consumer habits. In this context, an optimal transportation model is a necessary solution to help F&B businesses retain customers while optimizing costs to maintain operations.
The latest ebook by Abivin will clarify the impacts of COVID-19 on Vietnamese F&B businesses in general and on logistics within these businesses in particular. Additionally, we will propose how to implement an optimal transportation model for your F&B business.
1. Impact of COVID-19 on F&B Businesses in Vietnam
a. General Situation
According to Statista, 89% of surveyed Vietnamese businesses face financial issues. Half of these businesses saw a revenue drop of over 16% post-pandemic outbreak.
With the resurgence of COVID-19 in the second wave, Vietnam's economy is predicted to suffer significant impacts in Q3 2020. Survey results from the Private Economic Development Research Board indicate that if the pandemic lasts more than six months, the effects on Vietnamese businesses will be severe.
b. Situation of F&B Businesses
Firstly, quarantine directives and restrictions on gatherings have significantly reduced walk-in customers. Many F&B chains have had to close most of their physical stores to cut costs related to premises, staff, and raw materials.
Additionally, F&B businesses are affected by constant changes in consumer shopping habits.
Changes in Shopping Cart: During the pandemic, consumers are willing to spend more on foods that help prevent illness and boost immunity. The demand for stockpiling goods has also increased as people limit going out.
Changes in Shopping Channels: COVID-19 has fueled the explosion of e-commerce. The F&B sector has seen the highest increase in online consumption during the pandemic (45%) due to the high demand for "safe" eating when people are in isolation at home.
Given the continuous challenges and changes in the F&B sector, an optimal transportation model is a crucial touchpoint between businesses and customers, helping them retain customers while maintaining operations and market share.
2. Current State of Logistics in the F&B Sector
a. Current Situation of F&B Businesses
The potential for logistics development in Vietnam is significant. However, the unexpected emergence of COVID-19 has dealt a strong blow to this industry.
Increased Logistics Costs: Supply chain disruptions have led to many goods being stuck in warehouses and delayed deliveries to destinations. Prolonged storage times have significantly increased costs.
Restricted Logistics Operations: Isolation policies and travel restrictions, both domestic and international, have led to a shortage of input materials and a sharp decline in the market for consuming and exporting goods.
Reduced Logistics Workforce: Due to the pandemic, some segments have cut labor or switched to remote work. This has caused shortages in supply chain personnel, reducing communication efficiency and information linkage among staff.
b. Current State of F&B Logistics
Providing Home Delivery Services: Most F&B chains have shifted from physical stores to online services. However, the unanticipated supply chain disruptions during COVID-19 have extended delivery times and reduced product quality before reaching consumers.
Food Preservation Capability: Items requiring special storage, such as milk and frozen products, are prone to spoilage or degradation, causing significant cost losses for businesses. A cold supply chain is essential but has not been effectively invested in by companies.
3. Optimal Transportation Model for F&B Businesses During and Post-COVID-19
Based on the analysis above, an optimal transportation model is the leading solution for F&B businesses during the pandemic. An optimal transportation model must meet two tasks: cost optimization and time optimization. This allows F&B businesses to reduce unnecessary costs and meet customer demands in the shortest possible time.
The optimal transportation model is suitable for F&B businesses with their own fleets or outsourced fleets. It not only helps businesses improve operations during the pandemic but also prepares them for recovery in the post-COVID era and future economic crises.
Download the ebook để tìm hiểu chi tiết về mô hình vận chuyển tối ưu và các bước để ứng dụng mô hình một cách hiệu quả vào hoạt động doanh nghiệp của bạn.
4. Practical Example of an Optimal Transportation Model
In this ebook, we will share about a company that successfully applied the optimal transportation model during the COVID-19 period. This company is a fresh food supplier to most major supermarkets in Vietnam. During the pandemic, they had to ramp up production to meet a huge volume of orders. The company researched and implemented the optimal transportation model to streamline its supply chain.
Optimal Transportation Model for F&B Businesses During and After COVID-19