What Food and Beverage Brands Need to Know about Responding to CoronavirusMarch 25, 2020 - by Taylor Getler
Virtually every business in the world has been impacted by the current coronavirus pandemic in one way or another. Among CPG brands – food and beverage brands in particular – experiences have been particularly diverse.
Certain categories (such as canned goods, freezer entrees, and staple foods) have experienced an unprecedented surge in demand, and it’s been a struggle just to keep shelves adequately stocked. On the flip side, there are other categories that are essentially drowning. Craft beer brands that rely on the experiential element of breweries, for example, are already experiencing the first wave of layoffs and closures. Products that are seen as “nonessential” in the long term – high-end condiments and snacks, for instance – are also suddenly feeling the heat. It goes without saying that the foodservice divisions at many CPG companies have grinded to a halt entirely.
And, of course, there are new problems on the production end. The supply chain has been completely disrupted for many brands; sourcing from China has become basically impossible, and producers that rely on foreign workers coming in on seasonal visas are scrambling amid travel restrictions.
For all brands across the board, this is a rocky time that is difficult and painful to navigate. But although these changes have all been happening rapidly, we can still observe the field and learn some key lessons that can be used going forward.
The Alcohol Industry is Producing Free Hand Sanitizer
The Facts: Major alcohol corporations like Diageo, Tito’s Vodka, and Anheuser-Busch have pivoted to producing millions of bottles of hand sanitizer to help combat the shortage that healthcare workers are currently facing.
Even smaller brands, such as Dogfish Head in Delaware, have been working to supply their local communities with free hand sanitizer.
The Lesson: When this is all over, people are going to remember who did their part and stepped up. While every brand may not be in a position to contribute at this scale, adopting a policy of “doing what you can, as much as you can” will go a long way to demonstrate solidarity and empathy towards consumers.
With more and more Americans becoming exasperated with millionaire individuals and companies that are failing to provide material support during the pandemic – and with no clear idea of what condition the economy might be in when this is all over, or when exactly the economy will relaunch at all – consumer goodwill could become a more vital resource than ever before.
Small Brands Re-strategize Following the Cancellation of Expo West
The Facts: There are a handful of major industry trade shows – namely Expo East & West, the Summer & Winter Fancy Food Shows, and the Sweets and Snacks Expo – that serve as significant launching points for new products and as vital opportunities for fledgling brands to find national exposure. The cancellation of Expo West (along with the anticipated cancellation of further events) was a major blow. Not only did many brands anticipate that 2020 trade shows would result in necessary sales growth, many of them (particularly smaller brands) also invested a large percentage of their marketing budget into their booths, materials, and fees.
Many brands are attempting to recover by finding alternative means of networking. As coronavirus concerns ramp up and multiply, these networking opportunities are moving increasingly online.
The Lesson: Going forward, it is likely that many brands will further diversify their marketing plans, spreading their budget across a wider mix of live events and digital initiatives.
Brands that do decide to continue making large investments in live events will also likely develop contingency plans that allow for a smoother path to recovery if a trade show is postponed or cancelled altogether.
While it may not be likely that brand leaders will see another pandemic of this magnitude in their lifetimes, Expo West could have been cancelled for any number of extreme circumstances, hypothetically speaking. Wildfires, earthquakes, hurricanes, etc. are all fairly unpredictable acts of nature that can have enormous impacts on trade show plans, and severe environmental events are only expected to increase as climate change gets worse.
While young brands will always need to take on risk as a standard occupational hazard, backup plans and investment in strong digital assets will likely become a larger part of ongoing conversations among marketing teams.
A Surge in Searches for Foods with Functional Benefits
The Facts: As you might expect from the daily reports of grocery store mayhem that have flooded your social feeds, consumers are putting a lot of thought into what they are putting into their bodies. With fears of illness running rampant, shoppers are interested in food and beverage products that feel like a real investment in their health.
According to an industry report from Tastewise, there has been an uptick in searches for items with “functional benefits” that provide added value, such as kombucha and sauerkraut.
The Lesson: For brands that want to understand how they can connect with consumers and be a resource for them during this confusing and upsetting time, this data suggests that it is very important for shoppers to know how the items in their cart will benefit them and their family.
Throughout this pandemic, brands that have developed their products based on strong research and a passion for health and wellness have an opportunity to guide consumers and fight the spread of false information.
While there is not yet a clear end in sight for the catastrophe, when brands are in a position to strategize for a world after COVID-19, they should also consider tailoring their product lines to meet the physical and emotional needs of the changing shopper.
Recipe Websites are Refocusing
The Facts: Over the past two weeks, major cooking publications such as Food & Wine and Bon Appetit have been featuring content that is relevant to living under coronavirus – cooking with limited ingredients and pantry/freezer staples, large-batch recipes that can be frozen and eaten throughout the week, etc.
The Lesson: Food brands must understand that both cooking and grocery shopping have suddenly become very different tasks for many consumers, and brands can be an important and helpful resource by promoting recipes that fit into this new climate. There is a new opportunity to assist consumers who may have never been consistent cookers, and who may feel a bit lost and intimidated by the prospect of having to plan and create all of their own meals. For this group, having access to a range of simple and accessible recipes could be a comforting and necessary development that gets them through the quarantine.
While this is an undeniably sad and scary time for everyone, CPG brands can make the best of things and be a dependable partner for the consumers that they serve. Brands will undoubtedly suffer in some ways, as will most people under quarantine who are currently making sacrifices. But by having a clear strategy for how to move forward both during and after the pandemic, brands can come out of this more resilient and focused than ever.