Road to Recovery

Key Findings from Feed the Future Partnering for Innovation’s Follow-up COVID-19 Partner Survey

For Feed the Future Partnering for Innovation’s agribusiness partners, 2020 began much as it did for entrepreneurs anywhere: ambitious plans to grow sales, reach new customers, or perhaps launch new products and services. Just a few months into the year, however, any sense of optimism shifted to shock and upheaval as the COVID-19 pandemic unfolded around the world.

Supply chain disruptions, movement restrictions, and falling consumer demand made it difficult to sustain operations and generate revenue. Yet despite the growing crisis, our partners found ways to persevere, embracing innovation as they adapted their operations and turned adversity into opportunity. Now, many months into the pandemic, the impact of these efforts are becoming visible on their road to recovery.

Download the Follow-up COVID-19 Partner Survey Infographic (PDF) here.

Follow-Up Survey

How have these rapid and unpredictable shifts in the business landscape impacted our partners — and what do their experiences reveal more broadly about the health of private sector agribusinesses in emerging markets?

After launching our May 2020 survey to assess the immediate economic impacts of COVID-19, Partnering for Innovation recently reconnected to our global network of 65 partners in 24 countries. Our follow-up survey, conducted in November 2020, provides valuable insights from forty of these partners — working across 18 countries and 4 agribusiness sectors — about the performance of their businesses during a six-month period between May and October 2020 in five key operational areas: production; sales; workforce; liquidity and financing; and decision-making.

Key Findings

Our partners’ responses offer cautious optimism: many of them are slowly, but surely, rebounding. Their experiences reflect tenacity, agility, and creativity as they strive to overcome unprecedented market challenges.

Production Picking Up

At the onset of the pandemic, businesses producing physical products were especially vulnerable. Restrictions imposed to curtail the spread of the virus made it challenging for employees to come to work; for businesses to procure, transport, and sell goods; and for consumers and farmers alike to reach markets.

Since then, conditions have started to stabilize for many of our partners. Production disruptions continue, but their frequency and severity have fallen. Slightly more than half of surveyed partners who produce a physical product reported production levels similar to or greater than their pre-pandemic expectations — a more optimistic outlook compared to just 37% in May. Of significant note, the number of businesses surveyed experiencing severe production level declines (defined as a decrease of 50% or more) dropped from half of partners at the start of the pandemic to less than one-third over the past six months.

Sales Recovery Underway

Sales took a big hit at the onset of the pandemic. Nearly 9 out of 10 companies saw a sales decrease in May, with the majority of them experiencing declines of more than half. Since then, sales have started to recover: fewer businesses — 7 out of 10 — reported decreased sales. Additionally, the share of businesses that have lost more than half their sales fell by 36%, from around half of firms in the first month of the pandemic to 30% during the following six-month period.

Part of this recovery can be credited to how companies pivoted their business models in response to pandemic-driven challenges. The follow-up survey revealed that many businesses employed diverse strategies to combat falling demand, movement and gathering restrictions, and supply chain disruptions. The most common strategies included introducing new products and marketing approaches, cutting prices and offering flexible payment options, and strategically engaging with existing customers.

A surveyed business owner in Uganda, for example, reported that the company continued to “check-in on old customers, increase media presence, and introduce home deliveries” as well as initiated “promotions with supermarkets at a discounted price” simply to ensure customers remain connected to their products. While such efforts have helped offset losses, sales have not yet returned to pre-COVID levels.

Getting Back to Work

As sales have started to rebound, many businesses have re-hired employees who were let go when the pandemic began. Of the 9,610 total partner work force in the survey, 751 employees were laid off or furloughed at the start of the pandemic and 515 (or 69%) have since been brought back. In addition, two-thirds of businesses have also hired new staff since May. Many of these new employees — more than 6 in 10 — were brought on to support their company’s new delivery or marketing models, or to help introduce new product lines or services.

Perhaps the most positive change is reflected in the expectation of businesses. At the beginning of the pandemic, almost no businesses planned to hire back to the same staffing levels — even if operations recovered. Now, more than half plan to fully hire back to at least pre-pandemic levels once operations recover.

Business Financial Health Is Improving

Businesses have become more financially secure since the start of the pandemic, when falling sales and increasing costs significantly constrained cash flow and put 4 in 10 business in the precarious financial position of having just 3 months or less in cash flow and cash holdings to maintain operations.

Now, 70% of businesses report having 4 months or more in cash flow and cash holdings — compared to 57% in May. This is due in part to successful efforts by many businesses to secure loans or other types of financing. Challenges remain despite these improvements, however: while the percent of businesses in precarious financial positions has fallen by almost 30% (from 41% at the onset of the pandemic to 30% over the past six months), more than half of companies are still in need of new or additional financing to maintain operations and recover.

Cash Remains King

As evidenced by the enduring need for financing, businesses still require cash to continue rebuilding and successfully navigate the pandemic.

Despite signs of recovery, persistent concerns remain. The health and safety of employees and customers continue to be the top concern voiced by businesses, followed closely by financial health and the ability to maintain supply chains and operations.

Looking Ahead

With the unprecedented fallout of the pandemic on companies and individuals around the world, Partnering for Innovation is implementing new strategies for supporting its current and past partners — including offering flexible contracting mechanisms, providing emergency funding, and facilitating technical assistance.

At the height of the crisis in 2020, Partnering for Innovation announced new partnerships with 10 previous partners to help build their resilience both during and after the pandemic, and ensure smallholder farmers in emerging markets continue to have access to commercially-oriented, innovative technologies and services for years to come. As we enter 2021, many of our partners are on the road to recovery and Partnering for Innovation continues to help them meet new challenges along the way.

Download an infographic highlighting the key findings of Partnering for Innovation’s Follow-up COVID-19 Partner Survey.

Feed the Future Partnering for Innovation is a U.S. Agency for International Development (USAID)-funded program implemented by Fintrac Inc. that aims to expand commercial access of transformational technologies to smallholder farmers.