Whether it has decimated revenue or caused sales to skyrocket, the COVID-19 pandemic has impacted every food and farm business in some way, shape, or form. This crisis changed consumer behavior and food-buying patterns in an instant, and it is yet unclear which shifts will be short-lived and which will be permanent as our nation next weathers an economic downturn. Faced with so many unknowns about the future, entrepreneurs have been trying to determine the best way forward—or if they should even push forward at all.
But for all the roadblocks this situation has caused for food and agriculture businesses, it has also opened up new opportunities. That is why, over the past few months, we’ve been talking a lot about shifting strategies in response to the pandemic and predicted recession. While some entrepreneurs have gotten lucky, stayed successful, and haven’t had to change much about their business, countless others have been forced to reexamine their business models and figure out new ways to persevere through the pandemic.
For many, this has meant launching an e-commerce platform to compensate for sales lost from restaurants, retail, farmers’ markets, or corporate clients. And for companies that already had an omnichannel strategy and the infrastructure in place to sell direct-to-consumer before the pandemic, it has meant focusing more attention on and directing more resources toward their online business.
But there are other ways to pivot beyond just ramping up e-commerce. Some entrepreneurs, for example, are tweaking their product portfolios to better align with current consumer needs and shopping patterns.
When our latest podcast guest, Kate Flynn of Sun & Swell Foods, realized that demand for nutritious grab-and-go snacks is much lower now that consumers are working from home and not running from one activity to the next, her company began selling snacks in larger pantry-size bags. Sun & Swell also saw opportunity in the nuts, seeds, fruits, and other ingredients used to make their products. Since grocery stores have almost universally closed down their bulk sections—and there is chatter that some conventional supermarkets may never reopen them—they started selling ingredients in bulk, as pantry staples, directly to consumers. Now they are even adding new bulk ingredients to their lineup, beyond those needed to make their snacks.
Sun & Swell is an excellent example of finding silver linings in an otherwise dismal situation, and it’s quite possible that their strategy pivot and new focus will turn out bigger than their original business. We hope other food and farm entrepreneurs will find inspiration in this story and take a close look at their own business models and product portfolios to discover new avenues.
What could you offer consumers that you don’t currently? If once-lucrative sales channels have dried up, are there others you can pursue, such as subscription meal kits or the small grocery markets some takeout restaurants have set up? Or, if you’ve always sold to consumers, might there be B2B opportunities to consider? Can you partner with another business on distribution, marketing, or combined product offerings?
FFI is here to help businesses with self-examination and finding ways to keep the doors open. Our weekly virtual huddles are a great resource as well, as they connect entrepreneurs and consultants to share knowledge, answer questions, and generate ideas for finding success during these crazy times.
And now, our roundup of the best food and beverage finance news, events, and resources from around the web…
Business Model Insights
- The natural products industry’s need for diversity and inclusion (Food & Beverage Insider)– Withstanding future market disruptions and other unprecedented challenges will require diverse teams and inclusive business practices.
- How to reimagine our food systems for a post-COVID world (World Economic Forum)
- Entrepreneurs: Here Are 5 Steps You Need to Take Before Rebuilding Your Company in the Post-Corona Era (Forbes)
- An investor’s observation: The rainbows of managing a business during COVID-19 (New Hope Network)
Being profitable and generating cash flow is quickly becoming the new standard for many investors—not revenue growth.
- A New Resource for Understanding Lending and the Cost of Capital in the Post-PPP World (Forbes)
- Where to access business funds during COVID-19 recovery—and beyond (New Hope Network)
- PMG: Throw out marketing playbook and adopt watch-and-respond approach to consumer sentiment (FoodNavigator-USA)
“To remain relevant to consumers as they navigate the ongoing coronavirus pandemic, the economic downturn and the anti-racism movement sweeping America, food and beverage brands need to shelve their current marketing playbooks—and possibly planned ad campaigns for 2020—and instead adopt a more fluid approach, one expert says.
- Instore demos ‘are not going away’ but may look different in future, say sampling firms (FoodNavigator-USA)
- Spotlight on plant-based diet presents opportunities for all (Food & Beverage Insider)
- Coronavirus changed 85% of consumers’ food habits (Food Dive)
More than four out of five consumers say the pandemic has driven them to cook, eat, shop and think about food differently, according to the International Food Information Council’s annual Food & Health Survey. About 60% are cooking at home more while about one-third saying are snacking and washing produce more.
- In-store shopping still the predominant and preferred way to buy groceries (FoodNavigator-USA)
- Natural Product Sales up Significantly Compared to Last Year, Both Pre-COVID-19 and During the Pandemic (IRI)
Farming and AgTech
- As meat giants face scrutiny, small and niche producers capitalize (Food Dive)
The four major meat companies have closed plants and warned of shortages during the pandemic, while local ones have offered a more transparent view of operations and seen business boom.
- In apparent rejection of federal court, EPA allows continued dicamba use (The Counter)
- Farm groups ask for billions more in coronavirus aid (Fern’s Ag Insider)
- Regenerative Ag Investment Firm Launches with Acquisition of PastureMap (Regenerative Food Systems Investment Forum) – Soilworks Natural Capital, a B Corp set on expanding the regenerative agriculture economy, launched June 2 with the acquisition of PastureMap, provider of software to help farmers and ranchers manage animal herds using rotational grazing practices to heal the land, increase forage and improve economics.
- Nestlé to sell Buitoni Pasta’s North American division to Brynwood Partners (Food Dive)
- Danone partners with Brightseed to discover precise health properties of plant-based ingredients, starting with soy (AgFunder News)
We’re Still Huddling! Join Us Every Monday
Back in March, Edible-Alpha® started weekly virtual huddles to help food and farm businesses navigate the COVID-19 pandemic and economic fallout. Every meetup so far has sparked insightful conversation and fostered learning, resource sharing, and collaboration, so we’re not stopping now!
Huddle up with us next Monday to get your questions answered and gain new insights, ideas, and support. Learn more about the huddles and get them on your calendar by clicking here!