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However, you only need to read a few trading reports coming out of multi-national organisations, observe the chaos in the travel industry, and see your own stocks and shares rapidly plummet in value to appreciate the level of turmoil that COVID-19 is having on the economy.
I work with over a thousand challenger food brands where many of the founders are understandably concerned about the impact of the pandemic on their business and livelihoods.
As I type this, I receive an email from Propel info news with the subject line ‘Coronavirus hits high-street football by 26%’ as if to prove the point.
At Young Foodies we are facing the challenge head on so we can help our brands through what may be a difficult few months ahead. We have already kicked off crisis planning with regular community calls and webinars, ensuring small businesses feel supported and are given up-to-the-minute expert guidance.
Things are volatile right now and the mood in the community is that of understandable concern, but the very entrepreneurial spirit that brought them into business in the first place, is what is truly shining through. And it’s wonderfully inspiring.
There is an unbelievable amount of noise in the market at present and so what we need now more than anything else is positivity and collaboration. As a community we share an upbeat, positive outlook. In fact I see a few positive longer term impacts:
Accelerating online growth
We are already seeing online delivery and e-commerce demand go through the roof as more of the population works from home and stockpiling restrictions come into play. We are hearing through our network that online demand has increased by over 100% in one week in some cases.
This poses major operational challenges for many of the online grocers, marketplaces, and logistics providers supporting them. As an example, Ocado has had to take down its app and other online retailers are experiencing delivery delays. Observing this stress-test is painful right now but we will need to wait to see the longer-term uplift for these operators. The message here is that if you sell through online channels, or are considering creating a new online channel, now is the time to make the most of it but you will need to ensure you have the delivery capability to cope with the execution. In the longer term, if done well, e-commerce could become a highly successful DTC sales strategy.
The rise of the responsibly built business
I feel like I’ve been preaching for years about the need to build solid businesses, not just building them at speed. It is at times like these that those brands built on weaker foundations may struggle most. Use this unprecedented market challenge as the catalyst for more positive behaviours and procedures. The pursuit of revenue over profit and businesses that require excessive external financing to remain a going concern may be encouraged to critically assess their business operations to release margin points and reduce overheads. Although some of this may involve the difficult decision to make the business leaner by reducing head count where necessary, the long-term view is a more stable well-run business ready to capitalise on opportunities when the time comes.
Trust jumps into the driving seat
Whilst traditional shopping habits have temporarily been abandoned for panic-driven stockpiling, trust that they will return to a more stable state. Trust plays an increasingly important role in buying decisions. The evolution of the conscious consumer has forced brands to demonstrate their business beliefs outwardly and demonstrate authenticity in their statements.
With the ubiquitous fear and anxiety now gripping global populations, trust and loyalty will be even more important for those looking to prosper when the dust settles.
Ultimately, the consumer is still there, they are just behaving differently for the time being, so it’s not time to be reactive and completely change strategy, but rather re-direct, re-purpose and be prepared for all eventualities. Fortunately for the community, Young Foodies’ Brexit preparations will prove useful as we have already conducted risk assessments based on uncertainty.