With the current COVID-19 pandemic, what’s your view on how manufacturers are reacting during this unprecedented time of demand?
There are a lot of issues for manufacturers. Firstly, is it a safe environment for the staff to work in and can they fulfill their normal processes? Secondly, can they get the raw material? For most food items, unless you’re talking a basic coffee, or milk, it’s a menu of items within the ingredient, so one component can stop production. Third is demand, which has increased threefold recently. You may have the raw material and production, but if you don’t have the packaging to meet the demand that’s shifted forward, then you’re in trouble.
Lastly, can you manage your transport scenarios? For example, one of our partners just approached us to discuss their normal scheduling. They’re dealing with vehicles going out half full, or the opposite, where they can’t get everything on the lorry. They need to manage vehicle efficiency – but in the end – you can have all else in place, and if you can’t get it shipped out, well…
As a manufacturer, would you say your concern is simply about getting the supply chain fulfilled, as opposed to looking after specific customer groups in store at this time?
In the now, we have switched some of our forward production into retail from food service. Some of our food-service partners have lost 95% of their business because of diminished demand. But we’re also sitting on the 95% of that stalled business, so of course, you think about cash flow. It’s a bit tricky, because of lead times we work to, whatever I order today isn’t going to arrive for eight to ten weeks, so I have to do a “best estimate” of where we’re headed. We are however looking to produce a recovery support package for food service customers and their customers that we hope will kick start their business.
You have to prioritize your customers by their customer demographics, assessing the opportunity. In addition, we look to our customers with high offtake, selling, for example, most of a month’s product in a few days. It’s delicate balance.
Of course, households are stocking up, but we’re seeing new behaviors where customers who have never bought a given product category or range before are doing so. I imagine these customers are of great interest to you?
Yes, these are customers we want to engage because they are the 52-week consumer that you then lock in. Even before COVID, whilst we are a 100% vegan brand, which is the smallest sector of plant-based in terms of market share percentage, our market strategy had always been to engage with the person who is trialling something that’s meat-free. Once you get them into the journey, they will keep stretching. For example, the cheap £1 bag of basic nuggets is sold out, same with the finest. The shopper thinks They got these funny nuggets that are vegan on the shelf – we’ll just try it. Then they realize, this is a sustainable product, it’s environmentally friendly, and oh, it actually tastes good, and they’ll come back and buy it, and then they start the journey.
For those households that have trialed something during an event like the COVID-19, how do we pull them in and retain them – keep them engaged with the brand?
It’s quite difficult to look ahead and predict exactly as we’re moving into a whole “new world.” Prior to all this, our plan was very much to try and engage more within our two frozen and chilled categories, so to enhance ranges with ready-meal solutions. We also try expanding out into other plant-based protein meal occasions or ingredients. In Winter for example, you could combine a very good quality pea soup with a shredded polony. This broadens the reach. But, of course, when you’re a retailer or manufacture that uses loyalty data and see when customers trial new products, this is very powerful. You can incentivize them and get them to the point where they then become loyal to your brand.
From a manufacturing perspective, what three bits of insight would you as a company most benefit from now, and maybe over next few months?
- First would be understanding the consumer profile that’s buying my products, so we can identify the consumer that’s making the switches, and then we can focus on those to grow the demand and increase the frequency.
- Second, it’s understanding which of our ranges performed extremely well and why, then looking at where the next opportunity is. For us, it’s ready meals, that’s what we need to develop.
- Third, is building on the relationship with the retailer; this current situation is helping with information exchange and cooperation – back and forth on what is needed and how we can help – and that’s great.
Some of our retailers are actively planning for September and the “other side of COVID-19.” Others are not really planning, just living for today. It will be very interesting to see is how this all plays out. Some retailers have logistical teams that are way ahead of others – doing real forwarding planning and these will be the retailers and partners who come out stronger post COVID-19. Their buyers are working towards the next stage. They’ve got problems like everyone now, but they’ve quickly taken the action, they have a clear and cogent plan. You have to address the “now,” but be using the now to inform the future.
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