Newspaper headlines like this are growing in frequency. It’s no wonder the $25 billion US poultry industry is watching this dreaded outbreak with intense scrutiny. A major outbreak in this country would cause consumers to stop eating poultry, temporarily damaging the industry as well at the restaurants that specialize in chicken products.
In the supermarket industry, such an outbreak, while serious, would have less negative affect because consumers will simply purchase other types of meats.
However, should humans become infected with this deadly strain of influenza, all retail sectors will face workforce depletion and dramatic sales declines.
This article provides an overview of a potential avian flu pandemic and how such an event might impact our society. Regardless of the possible disaster, retailers should plan for the impact of that event, such as workforce depletion, which recently occurred following Hurricane Katrina.
The retail food industry is an integral part of any community recovery efforts after a major disaster. Therefore, loss prevention executives within the supermarket and related industries should be developing partnerships with local, state, and federal governmental agencies as a critical part of their preparedness and contingency plans.
This topic includes a number of terms that may be unfamiliar to many readers, including bird flu, avian flu, H5N1, and pandemic. These are terms in use by some to describe the looming disaster that scientists and health officials around the world fear can kill millions.
Avian or Bird Flu. Regular bird flu viruses occur naturally among birds. Wild birds from around the world carry the viruses in their intestines, but usually do not get sick from them.
However, avian influenza is very contagious among birds and can make some domesticated birds, including chickens, ducks, and turkeys, very sick and kill them. Infected birds shed influenza virus in their saliva, nasal secretions, and feces. Susceptible birds become infected when they have contact with contaminated secretions or with surfaces that are contaminated from infected birds.
Domesticated birds may become infected with avian influenza virus through direct contact with infected waterfowl or other infected poultry, or through contact with contaminated cages or feed.
Infection with avian influenza viruses in domestic poultry causes two main forms of disease that are distinguished by how easily they can cause disease:
- The low pathogenic form may go undetected and usually causes only mild symptoms, such as ruffled feathers and a drop in egg production.
- The high pathogenic form spreads more rapidly through flocks of poultry. This form may cause disease that affects multiple internal organs and has a mortality rate that can reach 90 to 100 percent, often within 48 hours
Using historical infection and mortality rates from the pandemic of 1918, the University of Minnesota Center for Infectious Disease Research and Policy estimates that 180 to 360 million deaths will occur worldwide with over 1.76 million occurring in the US.
H5N1. This is a very high pathogenic strain of an avian flu virus that has existed since at least 1997. Initially this dangerous strain was primarily found in Asia, but is rapidly spreading to parts of Africa and Europe, as evidenced by the recent outbreak in Britain referred to above.
The most frightening aspect of the H5N1 strain is that is mutates rapidly as it spreads, and so the usual methods for eliminating the spread of bird flu do not work. Some of the usual methods involve the killing of entire flocks of domesticated birds and wiping out entire poultry farms.
To date, the World Health Organization has identified 166 people throughout the world who have died of H5N1. Given such a small number, why is this particular strain of flu being monitored and reported on so closely?
The H5N1 strain has only shown up in humans who have come in direct contact with infected birds. In some Asian countries, roosters and chickens are allowed to run free inside homes. Open markets often have dead chickens and ducks hanging from vendor car
The spread of the virus from one person to another has been very rare and to date has never gone beyond one person. However, of the 272 cases of human infection of H5N1 influenza reported worldwide, over 60 percent have died.
It is important to note that people can not get bird flu from eating poultry that has been properly handled and cooked. The Food Marketing Institute has developed an informational brochure entitled “Consumers Guide to Understanding Bird Flu, Seasonal Flu, and Pandemic Flu.” The brochure can be downloaded and disseminated to customers and employees by going tofmi.org/foodsafety/avian_flubrochure.htm.
Pandemic Influenza. The fear of health officials is that the H5N1 flu virus will cause a worldwide pandemic event that rivals the devastating Spanish flu of 1918. To put the 1918 pandemic into perspective, consider the following facts:
- Seasonal flu is predictable and occurs every year. In a typical year, influenza kills 1 to 3 million people worldwide, including 30,000 to 50,000 in the U.S. Health officials know what viruses cause the seasonal flu and have the vaccines available to help prevent or minimize its impact.
- The Spanish flu pandemic of 1918 burned around the world and infected over one billion people and killed 200 million.
- In the United States, 100 million were infected and 675,000 people died.
- Of the 57,000 people who died in WWI, 43,000 died due to influenza.
- Many people died very quickly—feeling well in the morning, becoming sick by noon, and dying by nightfall. Those who did not die within the first few days often died of complications from the flu, such as pneumonia.
There are two main reasons that the H5N1 is considered to be a grave threat—mutation and a body reaction called a cytokine storm.
H5N1 has the capability of mutating and making the jump to humans, probably thorough an intermediary species such as swine. However, in February 2007 the U.S. Embassy in Indonesia issued an advisory to Americans to avoid contact with stray cats in that country, citing confirmed reports of the animal carrying the deadly bird flu virus.
As the virus continues to change and mutate into new, more resistant forms, vaccines can not be created fast enough to kill the virus before it changes again. In addition, mutation creates new flu viruses that people have not been exposed to in the past. Because our bodies have no resistance to this new virus, it could spread quickly from person to person and cause serious illness and death.
Unlike the common wisdom about seasonal flu, the Spanish flu of 1918 attacked and killed young adults as well as the usual high-risk groups with the attack rate and mortality highest among adults 20 to 50 years old. Young adults usually have very strong immune systems and therefore can fight infections. However, the H5N1 virus attacks the lungs causing the brain to trigger a massive immune system response called a cytokine storm. The lungs become choked with debris and inflammation causing severe pneumonia and, all too often, death.
Using historical infection and mortality rates from the pandemic of 1918, the University of Minnesota Center for Infectious Disease Research and Policy estimates that 180 to 360 million deaths will occur worldwide with over 1.76 million occurring in the United States.
Will a Pandemic Really Occur?
The term pandemic refers to any disease that:
- Spreads rapidly around the world,
- Affects a large number of people, and
- Has no known natural immunity or immediately available treatment or prevention.
Many average citizens as well as loss prevention executives liken the fears of a global pandemic to the fears raised by Y2K, commonly called at the time, the “millennium bug.” As you may recall, there was worldwide panic over the ability, or lack thereof, of computers and other electronic systems to function when the date changed from 1999 to the year 2000. For years, many computer programs had been written to only use the last two digits of a year when processing relevant date information. The fear was that computers would process the year 2000 as 1900, and everything from missile defense systems to automobiles would fail and life as we know it would be horribly disrupted.
As the ball dropped in Times Square ringing in the year 2000, we breathed a collective sigh of relief as our computer and electronic systems continued to serve us just fine.
As a side note, during this “crisis,” at least one supermarket chain distributed Y2K survival kits to stores, which included battery-powered flashlights in case the power grids went down, grease pencils to give to customer to price their own merchandise, and solar calculators and pads of paper to “ring up” customers in the event that the register system failed.
Given the experiences from the Y2K global scare, the questions regarding an impending disaster from another type of “bug” in the form of a flu strain are sure to continue. However, the fear from this new bug is well grounded in historical fact, and, instead of just shutting down computers, this bug kills with a vengeance.
In the past 300 years, there have been ten pandemics with an average of twenty-four years between events. There has not been a pandemic event in thirty-nine years. So, statistically, it is not a question of if a pandemic will occur, but when.
Based upon historical trends of other pandemic events, it is projected that the event would last approximately twelve to eighteen months. During that time, there will be lulls in the number of infections and deaths, and it will appear the worst has past. Then, the virus will mutate and attack again, usually with more intensity than before.
Preparing for a Pandemic
According to a May 2006 article in the Washington Post,
“…more than half of US companies think there will be a global flu epidemic in the next two years. Two-thirds think it will seriously disrupt their operations as well as promote social unrest. But two-thirds also say they aren’t prepared. One-third of executives surveyed say nobody in their organization has been appointed to plan for a pandemic; another one-quarter couldn’t or wouldn’t answer the question.”
During his last two years in office, Tommy G. Thompson, former Secretary of Health and Human Services, beat the drum of awareness with regards to pandemic preparedness and continues to do so as a private consultant. “Corporations are looking at this like deer at headlights,” Thompson said. “They are very skittish. They don’t know which way to go. They are hoping the car is not going to hit them.”
According to a 2006 report published by The Conference Board, a global business and research organization, the preparedness efforts of companies seems to depend upon the amount of sales they have:
- 95 percent of companies with more than $5 billion in sales either have or are in the process of planning for a possible pandemic.
- 65 percent of companies with less than $100 million do not have any plans in place.
The one positive area in the report indicated that the majority have developed, or are developing, detailed avian flu pandemic readiness plans. The report found that nearly three-fourths of the 553 responding global companies either have a plan or are well into developing one. Eighty-five percent of survey participants began their planning efforts within the past twelve months.
It undoubtedly takes money and resources to plan for a pandemic and implement the business continuity infrastructure plans necessary for continued operations. For example, there will be a need to allow some employees to work remotely from home, so the infrastructure must be built to allow for this connectivity. But according to research by the Forsythe Solutions Group, which interviewed more than 75 information technology and business continuity professionals at Fortune 1000 companies, the belief that a problem will occur did not necessarily translate into business reality. In the survey 69 percent believed that a pandemic crisis would occur in the next two years, but 60 percent have not increased their IT budgets to prepare for it.
Retail Impact of a Pandemic
Retail supermarkets will play a major role in assisting the community in surviving the initial isolationism and the subsequent recovery of their communities during a pandemic event. While each company may approach their planning and preparedness differently, they must have the foundation for ensuring continued operations in virtually any type of crisis situation.
Companies agree that the current retail model will undergo modifications during a pandemic event. Currently, retail supermarkets rely on customers to travel to their stores to make purchases. While many supermarkets have a presence on the Internet, the vast majority of sales are generated in the brick-and-mortar world.
A pandemic will initially create an isolationist mentality that will cause the general public to avoid public gathering places, such as restaurants, malls, shopping complexes, and non-essential retail stores. Supermarkets and food stores on the other hand, offer consumers in the United States the basics of life, including food, water, and prescription medications.
According to the most recent data provided by the Food Marketing Institute, the typical US consumer visits their local supermarket on the average of 2.1 times per week with the average purchase of $27.34. The 34,000 supermarkets and food stores in the United States have combined annual sales exceeding $475 billion. Supermarkets will still have customers in their stores, but shopping preferences and buying patterns will change dramatically.
In the first few months of a pandemic event, we can expect overreaction and irrational behavior on the part of the public due in part to the massive media attention across the globe. But after the initial panic subsides, the public should adjust to the realities of life during a pandemic. Most consumers will likely conduct themselves in the following ways:
- Avoid dining out.
- Use quick-service drive-up windows more.
- Avoid non-essential retail stores and malls.
- Consolidate trips to the store by purchasing larger quantities of product in fewer visits.
- Prefer non-perishable and prepackaged goods as opposed to fresh products that are handled by employees in the supermarket.
- Want to purchase case quantities of certain items to reduce trips to the store.
- Purchase increased quantities of certain HBC/anti-bacterial products.
- Stock up on gloves and masks.
- Demand that employees who work in the retail sector wear masks and gloves, despite the fact that health officials are still debating the effectiveness of wearing masks to guard against the spread of the influenza virus.
- Demand to see anti-bacterial wipes at the checkout area and strategically placed throughout the store. (Many stores are already placing anti-bacterial wipes in the shopping cart areas in the front of the stores.)
- Scrutinize country-of-origin labeling and not purchase items from certain countries with the most significant outbreak of flu illnesses and deaths
To avoid or reduce human contact, customers will want more self-service checkout lanes, Internet ordering with curbside pickup, and more home delivery of groceries and prescription medicines.
Impact on the Workforce
In addition to the impact on retail operations due to changing consumer behavior, the retail workforce will also be affected by illness and death. The avian flu, like the Spanish flu, is projected to have the ability to infect and kill young adults as well the usual high-risk groups. Estimates are that 20 to 30 percent of the workforce in the U.S. will be out at any time.
As mentioned earlier, the cytokine storm effect of a pandemic event would severely impact our workforce since it strikes young adults as well as the usual high-risk groups. The following chart shows projected deaths by age group based on research by the Center for Infectious Disease Research and Policy at the University of Minnesota.
It is estimated that over 280 employees per 1,000 will become ill with the virus, and more than 28 will die. Approximately, 40 immediate family members per 1,000 employees will perish. If you take an average supermarket with 150 employees, here are the resulting statistics:
- 28 employees will be ill and out of work at any one time,
- 4 employees will die,and
- 6 employees will have family members die,which will result in significant absenteeism
On top of these raw numbers is the dramatic psychological effect of the deaths of fellow employees on a company’s workforce, which can be significant.
Companies can expect workforce shortages that will disrupt normal operations. At any one time, staffing levels for some departments may be as low as 50 percent. Due to the stress and personal
issues within their own lives during the pandemic event, employees can be expected to behave differently than under normal circumstance:
- Some will just refuse to call or show up.
- Some will want to work as many hours as they can as a means of providing for their family while protecting their family against exposure.
- Some will come to work even if they show the signs of having the flu.
- Some may refuse to seek health care for fear of contracting the flu at the doctor’s office.
- Some may refuse to perform certain tasks or jobs that involve interaction with customers.
- Some may expect the company to provide food and medicine for them and their families
Identifying Critical Job Functions. As a matter of survivability for any type of crisis situation, company management should initiate the identification of the critical job functions throughout the organization and within every department and develop a bench of qualified people for those critical functions. Some of the critical job functions that have been identified by some supermarket crisis teams:
- Stores—Cashiers, meat cutters, and stockers
- Office Support—Payroll, accounts payable, IT system, and maintenance staff
- Warehouse/Transportation—Truck drivers, order selectors, loaders
One regional food chain addressed pandemic preparedness using the very best resource possible—its own employees. Alex Lee, Inc. is a holding company of several southeastern food/warehousing companies, including Merchants Distributors, Inc., a wholesale food and merchandise distributor serving over 600 stores in seven Southeastern states; Lowe’s Food Stores, Inc. with over 100 supermarkets; and Institution Food House, Inc., one of the thirteen largest food service distributors to restaurants in the country.Because each critical job function has many tasks that can be negatively affected by other related issues, Alex Lee went directly to subject-matter experts when developing their pandemic plan.
First, the company contracted with Dr. Michael Osterholm, director of the Center for Infectious Disease Research and Policy (CIDRAP) and professor in the University of Minnesota School of Public Health. Dr. Osterholm educated senior management of the company on the complexities of avian flu and helped them devise a strategy for developing a preparedness plan
Next, they identified the critical job functions within all of their holding companies and brought together employees from each of those critical functions. These employees received information and education on a pandemic event and were encouraged to explore the “what if” questions pertaining to such an event. The information and insight gained from this process was detailed and invaluable in the development of their pandemic preparedness plan.
Managing Worker Shortages. In the event of a pandemic or other crisis affecting the workforce, non-essential functions will be suspended. For example, in a supermarket a cake decorator may be more valuable performing a stocking role or working the cash register. Employees should be cross-trained to perform multiple tasks and duties as needed. Of course, this is a normal best practice with regards to effective utilization of labor, but is even more essential during a crisis.
Businesses that remain viable during a pandemic event or other crisis will be competing for employees, making a difficult situation worse. After Hurricane Katrina, the workforce in New Orleans was depleted and businesses were desperate for employees. One fast food chain raised the starting pay to $10 to $12 per hour and offered a signing bonus of $6,000. Business recovery and continuity plans should include detailed retention and recruiting components.
While all corporate support departments will be impacted by a pandemic event, few will have a more critical role than the human resource department. Virtually every policy and process dealing with employees will have to be scrutinized using the filter of the pandemic scenario, including:
- Short-term disability
- Emergency assistance,
- Medical benefits,
- Paycheck distribution, and
- Employee assistance programs
During a pandemic event, HR departments will be inundated with requests…and demands…for information, benefits, and immediate assistance from employees and their families. Staffing levels in HR must be increased to handle the increased workload efficiently so as not to become a bottleneck and point of contention for employees in need.
Using the projections for illness and death per 1,000 employees, a company with 5,000 employees can expect to have 1,400 illnesses and 140 deaths reported. Companies should examine their current processes for handling the death of an employee, including insurance documentation and benefit distribution. The employees who handle these processes should also receive counseling and evaluation for their own emotional well-being.
The Impact on Vendors, Suppliers, and Services
When developing a disaster and business continuity plan, keep in mind that the workforce issues that are occurring in your company are also occurring in those companies that provide goods and services to your business. Therefore, companies should develop alternative sources for essential products.
Start by establishing relationships with service companies and vendors that are willing to be a backup provider for critical services in the event that your primary vendors are not able to meet your needs. Examples of these critical services vary by company, but alternative security providers, like armored car carriers or contract guards, should be developed before a crisis.
After Hurricane Katrina, the business community affected scrambled to reestablish operations and needed security for their employees and stores amid the chaos following the storm. However, local and regional security companies were in the same situation with regards to workforce depletion. Businesses had to seek out security providers from outside of the impact area of the storm and from vendors they may not have worked with in the past.
Establishing Public-Private Partnerships
When asked about crisis situations, a supermarket executive provided the mantra of the industry—“In the event of a crisis or disaster in the communities we service, our stores are the last to close and the first to open.”
Retailers often play critical roles in the survival of communities immediately after a disaster situation:
- Distributing free water and ice from the back of grocery trucks to provide relief from the sweltering heat in rural North Carolina after a hurricane knocked out power and flooded entire towns.
- Donating baby wipes, disinfectants, and bandages to police and firefighters at ground zero in New York after September 11th.
- Delivering food, baby formula, and medicines to the citizens of New Orleans trapped in the Superdome after Hurricane Katrina.
In major disaster situations, it goes without saying that all businesses, not just food-related businesses, step up with offerings of support and relief. However, supermarkets and their related distribution networks and suppliers can serve as a particular resource for governmental and public relief agencies that are charged with responding to disaster situations. Supermarkets provide food and medicine, which are essentials to any preparedness and recovery plan.
After Hurricane Katrina, the Senate Committee on Homeland Security and Governmental Affairs conducted hearings on the government’s response during the crisis and issued findings that recommended increasing public-private partnerships to enhance the overall preparedness of governmental disaster agencies.
During her opening statement before the hearings, Senator Susan Collins (R-ME) who chaired the committee stated,
“Not only were businesses able to recover and reconstitute quickly, but they were also able to provide supplies, equipment, and food and water to aid in the recovery of local communities, something for which they should be commended. We are here today, however, to learn how they were able to respond so quickly and so effectively when government did not. We have much to learn from the private sector and we must do all we can to apply those lessons to the operation of government
Senator Joseph Lieberman (D-CT), who is the ranking member of the committee stated,
“These companies really form the backbone of our society and economy and therefore must be prepared in the national interest to respond to crises and we must work with them in government to protect them at all costs.”
There are many positive examples where such public-private partnerships have been formed across the country.
have been formed across the country.In May 2006, California Governor Arnold Schwarzenegger created a public-private initiative within the Governor’s Office of Emergency Services to seek out and develop working relationships with private industry. As an official of the Office of Emergency Services said, “We know everyone in the public sector and what our capabilities are…what we don’t know, but need to know, are the capabilities and contacts within the private sector with regards to preparedness and recovery.”
Wisconsin created a Special Legislative Committee on Disaster Preparedness Planning with members of government officials, health care professionals, and representatives from the private sector, including a representative of the Wisconsin Grocers Association.
However, there are some barriers to achieving meaningful partnerships. One supermarket chain approached a major city with an offer to assist in times of disaster. They wanted to make arrangements for the employees of the supermarket to obtain early entry into an affected disaster area in order to provide certain necessary items for relief efforts. The city officials would agree to the early entry request only if the stores of the chain met certain requirements, such as installing specific size generators, having large quantities of specific supplies on hand at all times, and several other requirements. The excessive demands caused the chain to withdraw their offer of assistance.Despite such challenges, retailers must find ways to build partnerships that allow us to assist within our business parameters and not within governmental bureaucratic restrictions. Retailers do not want to become an arm of government, but instead a business partner. Having retail management at the table with state and local disaster-planning agencies prior to a disaster or crisis greatly enhances the potential response and support to the community
Hopefully, the next pandemic outbreak will be relatively mild and the Y2K naysayers can gleefully say, “I told you so.” Let’s hope they are right. But in the meantime, our communities and businesses must prepare for the worst…and hope we’re wrong.