For many entrepreneurs the first major hit from COVID-19 was the cancellation of the Natural Products Expo West, the prime stage for brands to connect with retailers and investors across the food retail industry.
Alan Reed, executive director of the Chicagoland Food & Beverage Network (founded in 2017 with the mission of making Chicago the ‘Silicon Valley of Food and Beverage’) said COVID-19 will impact small, young companies the most.
“Those with the more fragile supply chains, which is always going to be the younger companies – the startups, the ones with significant dependence on one or two ingredients, I worry that we could see some real challenges and we could see them go out of business,” said Reed.
“Any newer business without a large organization or established supply chain behind them, will absolutely be at risk.”
However, Reed added that the Midwest and larger US food system can and will weather the storm.
“This is one of those moments that people in the food industry recognize that they’re not just a company – we don’t just make widgets, we actually feed the world. It’s that kind of higher mission that has to ultimately inspire and pull through the food and beverage industry during these incredibly challenging times,” Reed told FoodNavigator-USA.
Stay nimble, be flexible
For raw, plant-based dressing brand Mother Raw, CEO Kristi Knowles shared the need to be nimble is now more important to the future of her business than ever.
“Things are shifting daily so it’s all about remaining flexible, very connected as a team and willing to pivot. Take the recent Expo West cancellation decision for example. We were so excited to debut our 20th product, our Lemon Tahini Dressing, but due to the fall-outs from the postponement of the show, we had no choice but to be resourceful and agile with creative solutions to try and make the most of the investment and resources applied,” Knowles said.
“With the cancellation of Expo West, Mother Raw pounced on virtual meetings and events like NOSH’s Elevator Talk, we created conversations with the professional community through
LinkedIn and we utilized our social media and PR to stay timely and connected. We also encouraged retailers, buyers, investors and media to be open to outreach from scrappy start-ups like ours.”
Nydia Shipman, co-founder of The Worthy Company, said: “We are fortunate that we are uniquely positioned to be offering nutrient dense, plant based, spoonable delicious snacks that are travel friendly with an extended shelf-life for consumers.”And while some industry experts predict that consumers could move away from premium, specialty brands if we enter a recession, others believe that stocking up on nutrient-dense foods with clean labels will become even more important for a large segment of the population.
The Worthy Company's spoonable bowls of blended fruits and vegetables contain 8g of plant-based protein and fiber.
“Consumers of all ages can eat our bowls and get necessary nutrients that in these times in particular are a challenge to get,” added Shipman.
For alkaline water brand Proud Source Water, supporting its partners as much as possible is what the company is focused on, according to president CJ Pennington.
"It’s challenging and we recognize everyone’s circumstances are different. As a small business it’s critical we put energy in places where we can make a difference and let go of the things we cannot control. So we are focusing our efforts on supporting the 15,000 retail doors we have product in," Pennington said.
Supply chain challenges?
For Mother Raw and Proud Source Water, the two companies have their own dedicated facilities to produce their products and are continuing to go full speed ahead with production.
“We are thankful to make all our Mother Raw products in our own facility because we can regulate our supply, and not depend on co-packers who may be impacted. We always closely following official food safety recommendations, and our product quality and R&D teams have enacted additional proactive measures to continue to ensure the health and safety of our staff and Mother Raw products,” said Knowles.
“Over the past three years we have been preparing for the unexpected by heavily investing in the build of a reliable supply chain. The business owns and operates its own bottling facility in a very isolated location and we have stocked up large amounts of raw materials. With plastic usage likely at an all-time high, we feel it is our duty to continue to provide consumers with a consistent supply and access sustainable spring water,” said Pennington.
Online sales climb while in-store remains stable
Knowles noted that direct-to-consumer (DTC) sales have increased 60% the week ending March 16 compared to the week prior. Meanwhile, brick-and-mortar sale have remained stable with retail orders coming in as planned.
Shipman added that The Worthy Company has redirected its efforts and funds to online channels.
“We are pivoting our go-to-market strategy, redirecting funds into DTC /Amazon, supporting our existing retail partners, pausing our food service launch and closely monitoring our supply chain to keep up with demand,” noted Shipman.
“We are fully embracing the virtual and digital age for sales meetings, the NEXTY awards, and investor pitches like we did for the Pepsi Woman Owned pitch. In what are clear early indicators of shifting shopping practices, our consumers are embracing this new reality as well: our e-commerce business has tripled, we sold more on Amazon the past week than we did all of last month, which was already a record setting month for our growing business.”
Putting people first
Across the board, brands are taking extra measures to protect the welfare of their team members and their families.
"While our team remains focused on our business, we are connecting more than ever with our teams to ensure they know they are well supported at home as well as with their work priorities," said Knowles.
"For example, daily morning meeting calls where we ‘check-in’, align on the day’s priorities and share ideas on how Mother Raw can support our consumers and retailers through this very difficult time. The team at Mother Raw is in constant communication...checking in on every one, every day to ensure they have what they need, whether that’s work related or family focused."
"The pandemic has been a reminder to look within and have an open dialogue around the health of our employees, their families, friends and communities. People should always come first," said Pennington.
