Despite being hunkered down in our homes with little drunken coworkers, I mean kids, we’re as connected as ever with the food & beverage community.Through a series of Zoom gatherings over the past 5 weeks, we’ve digitally toasted over 100 founders, CEOs, retailers, restaurateurs, and investors.While it’s no secret that e-commerce is up, food service channels are down, and retail is volatile, we believe there’s plenty of good news beneath the headlinesBelow are some of the most salient themes and insights we’ve heard from across the board:
For many “stockable” brands, sales were insane in March, slowed in April, and are finally starting to pick back up again as consumers’ forward-buying stockpiles are finally running out. Baskets are beginning to revert back to normal -- albeit twice as large and half as frequent.
At retail, people aren’t shopping but buying. Being merchandised in impulse or at eye-level has never been better as the treasure hunt becomes a footrace. While grocery lists may look eerily similar to 20 years ago (think: peanut butter, whole chicken), new product discovery is still happening as incumbents are out of stock and shoppers are eager to check off their list.
We expect a discovery mindset return in full force as consumers seek to spice up their summer at home.
On-the-go items like bars and and caffeinated beverages are finding renewed demand with busy families balancing work and childcare. Likewise, frozen entrees continue to grow without promotion.
There’s a narrative that people are returning to comfort food, but homebound consumers are tiring of the same old. We expect a discovery mindset return in full force as consumers seek to spice up their summer at home.
Innovation & Repositioning
It’s well known that many companies have put innovation on hold. Brands poised to launch new products at Expo West are reevaluating whether their planned launches are still relevant in a post-COVID world. That said, teams that use this time for reflection, R&D, and idea generation will have an advantage as consumers and retailers adapt to the shifting marketplace.
Innovation isn’t just about new products, but can be about repositioning, introducing new sizes/formats, expanding into new channels, or switching up your marketing mix to fit with the times. We’re seeing brands launch limited editions on the hypothesis that people are bored and willing to try new things. We’re seeing others opportunistically innovate to fill shelf space left by competitor out-of-stocks.
We’re seeing brands launch limited editions on the hypothesis that people are bored and willing to try new things.
We’re also seeing a bevy of brands reposition to highlight immunity-support -- a smart move given the sudden universal focus on proactively being healthy. But we can’t help but ask ourselves, will immunity-washing become the new greenwashing?
Coming Alive online
A large portion of consumers are bored and have few discretionary spending opportunities, which is a boon for e-commerce. Scores of brands that have made a quick pivot from on-premise or retail to online leveraging newsletters, Facebook ads, traditional PR, and micro-testing SEO to drive traffic. Beyond their own Shopify sites, brands are optimizing their presence on Amazon and retailer-owned sites. Even brands new to DTC report feeling like they’re on a fast-track to better understanding their consumers.
Refrigerated products and alcohol are struggling with the rapid transition to online sales, but adapting nonetheless. We’re hearing both are marking up prices or reducing margins to deal with the very real logistical challenges. The brands that crack this nut are blazing a path that will outlive the COVID crisis.
Making the Sale
Face-to-face interaction has historically been the lifeblood of emerging brands. In a world without buyer meetings, tradeshows, and in-store demos (at least temporarily), how do you open doors and drive trial? Agile brands are reallocating promo and demo budgets to fund highly geo-targeted ads where they have distribution. Others are seeking low-touch, high-velocity channels on e-commerce to stay lean.
Buyer meetings have gone virtual and much of the feedback we’re hearing is positive. So positive that we suspect this may become the new norm even after the pandemic passes. Brands are loving the cost savings on travel and buyers are appreciating the reduced scheduling complexities.How are you getting through to consumers and buyers?The world as we know it is undergoing abrupt and massive change, so the only way we can get through it is by coming together!Let us know if you would like to connect to discuss any of these topics in more depth. And if you’re a founder, hit us up to be included in a future Zoom gathering!