COVID Insights

In this week’s version of Covid Insights, we are going to break it down into a few sections. Let’s start with some interesting facts we picked up from various industry media sources.

• For the week of April 5th, Frozen Produce sales were up 45%, shelf stable sales increased 42% and fresh sales were up 16%.
• Fresh vegetable sales grew 27% while fresh fruit sales were up 7%.

 
These trends have been fairly consistent since early March and we expect this to continue.
 
Interesting facts affecting the restaurant industry include the following.

• Hello Fresh is reporting sales are up 66% in Q1.
• Dinner is now the highest volume daypart in the restaurant industry replacing lunch.
• 52% of consumers are reporting that they will not feel comfortable dining out until Covid 19 improves.
• 50% of consumers said they will order more take out once Covid 19 subsides.
• China is requiring customers to be sprayed down with disinfectant before entering a restaurant calling it the Shanghai Spray. Yuck!

 
Here are some insights affecting the retail side of the business.

• 41% of consumers said they will continue to shop online post COVID-19.
• 1/3 of consumers report shopping online more frequently for grocery.
• 43% of consumers have never shopped online for groceries.
• 46% of consumers report buying larger sizes in the grocery store.
• About 1/3 of consumers are buying more private label, ad items and value packs.

 
The much over used term “the new normal” does not feel strong enough as we prepare for the Post COVID-19 consumer.  They will fundamentally change their behaviors for eating out and grocery shopping in a manner we have never seen in our lifetimes.  We need to prepare.
 
Here are a two interesting quotes that I feel are relevant for this week.
 
“….despite the horror of it all, this is the best time ever to start a business.”
​Mark Cuban
 
“You only find out who is swimming naked when the tide goes out.”
Warren Buffett
 
I take away two thoughts here.  Disruption creates opportunity.  The best innovators will look back and see this as the pivotal moment of their career.  And, strategic planning takes on a new meaning. We need to plan for the unthinkable and promote a mindset of adaptability during tough times. Leadership is more important today than at any point in our careers. Oh, and always where a bathing suit!  😊
 
It is not a secret that those focused on the food service side of our business have been impacted the most. Out of necessity, we are seeing some fast moving and innovative strategies emerge. 

• Panera and a few other restaurants are now selling groceries for pick up.
• Sysco is introducing a pop-up store where you order online and go to a central pop-up location the next day to buy large packs of products. This is aligned with the consumer’s desire for more large packs.
• Baldor (70% food service) introduced a direct to consumer model in a manner of weeks. They are seeing success and plan to keep it running post COVID-19. They leveraged their trucking infrastructure to make it all happen.

 
What ties each of these together is that they had to reinvent themselves very quickly.  Many more examples are out there.  Two of these companies are long standing, yet their leadership looked beyond the four walls and allowed their teams to create new solutions. As we know, it was hard to steer the Titanic. Sysco and Baldor could have been the Titanic, yet they found a way to adapt quickly. I expect many more innovations from this sector.
 
Our goals to support our clients going forward include the following.

• Stay close to the consumer and be on the forefront of their changing behavior.
• Engage with retail buyers to better understand their strategy changes.
• Help our clients win at E-Commerce.
• Encourage experimentation of new concepts including business to consumer.

 
Submitted by a friend of LIA