Matthew Wadiak, Cooks Venture CEO & Founder, joins Yahoo Finance's Zack Guzman to discuss how COVID-19 is impacting American food security.
ZACK GUZMAN: Since this pandemic has roiled the economy here in the US, we've noted a few things in the way that Americans have been changing their spending habits. And one of those has been a result of rising grocery costs as more Americans are eating at home. And we've seen production restraints here, specifically when it comes to meat, also playing a factor in all this. So let's dig a little bit more into that.
Our next guest is the CEO and Founder of Cooks Venture. Matthew Wadiak joins us now. The company is a next-generation ag tech and food company committed to regenerative agriculture, supply chain transparency. And Matthew, I mean, we've been discussing this problem on the meat front. I mean, myself as a meat-eater, I've noticed prices rising.
But when you back up and look at the cost of all of these things, a C+R Research survey-- I think more than 2,000 consumers-- noted that 85%, a majority of American consumers, say that they've been spending more on groceries. The average weekly bill, $139. So talk to me about what you're seeing play out here as some of these things get more costly.
MATTHEW WADIAK: Yeah, well that makes perfect sense. You know, we've seen obviously, you know, folks who are dining out decrease and people cooking at home increase. So it's only logical that folks would be spending more at the grocery store to get the equivalent amount of food. So those prices have increased.
But you know, the price of meat is also increasing, primarily due to the fact that you know cost of processing is increasing, you know, taking considerations around spacing folks out who are working in food manufacturing and fulfillment. Trucking is obviously increasing, with scarcity of resources available on the market. And as we've seen just the general variable costs associated with fulfilling to grocery demand and meat specifically, increase that's going to get passed, on to some degree, to consumers.
ZACK GUZMAN: Yeah. I mean, whether you look at beef, poultry, eggs, water, pork, those are some of the largest increases reported in this report. I know you guys are focused a lot on poultry. You guys work on that a while here.
I mean, talk to me about some of the production side elements of this too, because you're a business. You see this. You have insight into how hard it is to work on that front. We've seen-- we've covered the issues in some of these larger-scale meat processing facilities, having to deal with PPE problems as well as outbreaks in all this. I mean, how hard has it been to keep production up?
MATTHEW WADIAK: In our case, we haven't had the same kind of problems that some of the larger facilities have had nationally. And I think a big part of that is, you know, we're part of a regional food system. And we support regional food systems and quality jobs.
So on our end, we've had very, very low issues of absenteeism or problems with health. And I think that is also partially attributed to the fact that going into the pandemic, utilizing PPE aggressively from the start, doing a lot of the sort of like obvious stuff that we know today early on was very preventative. And it really does work in the kind of environments where we're focused on manufacturing.
You know, in the industry, obviously, we've seen widespread issues which have led to a lot of absentee issues and health issues across the board-- which of course, you know, when you're short on staffing in a large, you know, meat processing facility, that trickles down to the actual animals themselves that are on the ground. And if you can't process animals because you're short on labor, they're stuck in barns and have to be euthanized. So that's been some of the issues with meat scarcity early on, is just the fact that we've been euthanizing a lot of animals.
ZACK GUZMAN: It seems like that happened right when the pandemic hit. But in the weeks and months after we saw that first happen earlier in the spring, it seems like the industry itself got a better handle on it. But when you think about what Americans are bracing for prices potentially still rising in the latter half of 2020, but then also next year, a lot of them on the same survey reported eating less meat, seeking discounts, eating less poultry, avoiding organic items, and buying in bulk.
So I mean, when you look at it and think about maybe the industry adapting to some of those issues, what do you see in terms of maybe supply and demand coming back into equilibrium here starting next year? What should we expect?
MATTHEW WADIAK: I think some consumers are focused on those things, certainly. But we've also seen an inverse trend in e-commerce spend over the course of the last few months during coronavirus and an influx and about 125% increase in e-commerce spending for meat specifically for higher-margin items. So there's a little bit of a disconnect in what folks are saying and what consumer behavior is actually happening in the marketplace.
We have some data from the '08 recession. And it showed that during times of recession when people are focused more on staying at home, even during low-income the thing that people spend most on is actually food and alcohol-- so high-end food and alcohol, which is a little counterintuitive. But I think some of those creature comforts come back to us in the home as we're sort of bracing for the next winter.