Huddle Notes from August 31st, 2020

The huddles this week focused on how consumer behavior is impacting purchasing, what investment looks like during COVID, and major food organizations practicing corporate social responsibility.

** Reminder no Huddles on 9.7.2020, enjoy your Labor Day weekend! Join us again the following Monday, 9.14.2020! **

Talking Points

  • Consumer behavior: Protection during COVID is impacting purchasing
    • Fear – symptomatic of “we need to protect ourselves” due to COVID, police brutality, and protests
      • Ammunition in Northern Wisconsin is completely sold out and conceal carry purses for sale right inside the door of Duluth Pack store
      • Sounds similar to IBM’s Fear Uncertainty and Doubt (FUD) campaign which uses marketing tactics based on people’s fears.
        • Perhaps this is all just related to the election and it will get better?
      • Getting off the grid and getting away from civilization mentality
        • Solar phone chargers
        • Increase in RV sales and camping in general in remote places
        • Boating
      • Eating out at home: Food trucks are migrating to the suburbs to cater to those working from home
        • Using Facebook groups to promote their locations
        • Now doing dinner and also pivoting to be kid-friendly
        • Customers eat in their lawns and chat with their neighbors
      • Investment During COVID
        • When you have a precipitous economic event like this, investors tend to prioritize reinvesting in a company they have already invested in, not new ones
          • Nutrition Capital Network confirms this is happening on a big scale
            • Deal flow in 2020 (compared to 2019) with COVID shows significantly slower mergers and acquisitions (exits) because valuations are depressed. Valuation is a future-oriented thing for new companies, but the future is so uncertain which often depresses valuation.
            • Also, show investment money is up though
          • Expecting a 10-15% loan default rate
            • Banks are scared and money is tightening up
            • Ag lenders are particularly scared
          • Keep stashing cash to survive this!
        • Ag Tech – Equipment is a place for innovation in tech and food
          • Large distillers or brewers – technology can capture the CO2 that is generated. However, there isn’t one for small breweries.
            • Earthly Labs in Austin, Texas have developed a scaled-down version of the big industrial equipment that captures CO2. It’s a piece of equipment that is about the size of a refrigerator and costs $100K.
              • Physically and financially accessible for Craft breweries
              • Public benefit corporation with a goal of “avoiding a billion tons of CO2 emissions” it’s the equivalent of 26B trees
                • Remember when there was a CO2 shortage at the beginning of COVID? This helped boost this company’s popularity.
              • A business in Colorado has created a market for their excess CO2. They have installed one of Earthly Labs’ equipment to collect CO2 which they reinject into their beer to make it bubblier. Then they take what they can’t use and sell to a cannabis greenhouse; as CO2 is essentially fertilizer for plants.
            • Big food companies are embracing becoming more social-mission oriented and COVID has accelerated this.
              • Tera at a recent meeting was sitting with three others who were discussing their businesses:
                • Packaging person – sustainable packaging is their next project, moving away from plastic
                • Ingredient company and produce distribution company both put solar panels on their new buildings
                  • Produce distribution is a very low margin businesses
                • Danone – Providing Leadership on Climate Change. In the last year:
                  • Danone rehabbed an infant formula plant in Wexford, IRE, a facility likely built sometime in the 1960s or 1980s, and took that plant to be carbon neutral.
                  • Pledged to be carbon neutral by 2030
                  • Shareholders at a recent meeting voted Danone to become a mission enterprise under French law (similar to B Corps). They are the first publicly listed company to do this.
                  • The CEO and all of the board members took a significant pay cut to alleviate the dislocation for employees due to COVID
                • Patagonia Provisions
                  • Teamed up with other companies (Fair World Project, Rodale Institute, Dr. Bronner’s, Textile Exchange) to start the Regenerative Organic Certification to help consumers distinguish between general organic and regenerative – building soil quality instead of depleting, the secondary impact is carbon sequestering
                    • Businesses must be USDA organic certified as a minimum but go beyond with regenerative practices
                    • Criteria for soil, animal and worker health and well-being
                  • Also have a foundation that supports environmental organizations with bold, direct-action agendas and a commitment to long-term change through grants
                • General Mills – Acknowledging COVID Impacts
                  • Cheerios donated $1.3M to No Kid Hungry for COVID relief
                  • Neighborhood recipe $100K to a restaurant in a local community that is responding to local community needs


  • Grab-n-Go Snack Foods
    • Kombucha pivoting to cans and multi-packs so it’s showing up on the shelves more like soda
  • Kid-friendly attributes/products should be thinking about
    • Can Snack Foods pivot this way? How do you make your product relevant to grab-n-go when there is significantly less going?
  • Social Missions continue to resonate. Larger companies are focusing more on social missions because their consumers fundamentally care about these topics, otherwise they would likely not be doing it. Smaller brands, however, are typically not thinking on this larger engagement level unless there is a bottom-line benefit.

Tips & Next Steps

  • Encourage smaller businesses to think bigger. We as consultants help people elevate their brands and should consider encouraging smaller businesses to consider social missions and corresponding engagement, especially since the consumer will eventually want this from them.
  • Opportunities in technology for other sectors too, for example, whey protein and recovering waste streams.
    • How do we take technology and downscale technology to make it applicable to small-scale entrepreneurial food, beverage, and farm businesses?
  • Listen to Edible-Alpha® podcast on Scout Canning! Co-founder and CEO Adam Ben talks about how Scout Canning is on a mission to get consumers eating even more canned seafood by broadening their appetite beyond a single species, sourcing only from sustainable, transparent North American fisheries and farms, and engaging consumers in protecting our oceans. The episode also outlines the brand’s mission and differentiation points and how it pivoted strategies amidst the pandemic to score some big wins.

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