The impact of Covid-19 pandemic on agri-food SMEs in Veneto: critical factors for strategic change

Abstract

The spread of Covid-19 has created a psychological, social and economic upheaval, imposing new lifestyles, new eating habits and new ways of working, studying, meeting and purchasing, which, having experienced them, have somehow already become customary for many Italians.

This study highlights how the Covid-19 pandemic, as a tragic event of worldwide scope, has impacted the operation of the agri-food sector, through i) the spread of infections, ii) the succession of measures restrictive the freedom of movement, iii) the increased demand for certain shelf references and iv) the difficulty in finding the raw material and/or distributing the finished products. This study has the aim to provide an overview of how the operation of agri-food companies in 2020 and 2021 has been intensified and/or downsized, linking sales trends directly to i) the type of product offered by each company, ii) the diversification of their distribution channels and iii) the availability of resources to be used (labour force, production capacity, supplies). The aim was achieved by collecting the direct experience of 16 Venetian companies, different by province, size, legal form and production specialization, which were interviewed on the following macro-topics: i) development of the sector in the pre-Covid-19 period; ii) characteristics of the company’s core business and the supply chain in which it is part and iii) implications of the pandemic on the final demand for the product offered, on supply, distribution, internal and financial management of the company. Entrepreneurs' responses show an integrated, functioning, and resilient agri-food sector, that i) has always guaranteed the supply of a primary good - food - knowing how to balance the burden of the responsibility to produce and the duty to protect the health of its operators and that ii) has been able to adapt to the changing social and economic context, reinventing and exploiting the opportunities the pandemic crisis was opening to. Therefore, this study also exposes what reactions the Covid-19 pandemic has triggered in each of the 16 companies surveyed; in particular, it focuses on five winning business strategies that have allowed its companies to discover a new business model to be combined with the traditional one, on which it is worth investing because it works.

Especially in the case of future crises, whatever they may be, the implications and responses/reactions resulting from this analysis can serve as a stimulus for managers, policy makers and financial institutions to react and/or support new business strategies, ensuring the resilience of businesses, especially craft and small businesses, and entire production sectors.