The huddles this week focused on how consumers are spending and shopping during COVID, comparing data from the 2008-2009 recession to current times, and how businesses are pivoting.
Talking Points
- Keep on the lookout for state and local city government funding sources coming out, to help businesses adjust to social distancing so they can open
- Wisconsin $2500 Grants for Small Businesses under 20 employees
- Vermont Working Lands Grants for Food and Farm Businesses
- Shared also as a guide for structure and description to support any leadership, advocacy, design, etc. in your regions.
- Seeing a lot of businesses not pivoting. A pivot doesn’t have to be perfect, seekadvisement to get your business moving in the right direction!
- An example of an imperfect yet great business pivot
- Social Enterprise – The Hub Student Café in Lewisburg, WV, part of a larger non- profit that helped kids learn job skills. Have USDA funds to feed kids afterschool and do STEM learning.
- Pivot: Started making meals for the kids to take home. Started receiving a ton of donated food from local farmers and businesses. Went to USDA to get waivers to sell at a highly discounted rate to parents so the entire family could eat for less than $10 total.
- Went from 30 meals a day to their 20 original students to 200 meals a day once word spread.
- They have no online sale capabilities, people just call in
- The reason the families purchase these meals is because it’s good whole ingredient homemade food they know their kids will actually eat.
- Pivot: Started making meals for the kids to take home. Started receiving a ton of donated food from local farmers and businesses. Went to USDA to get waivers to sell at a highly discounted rate to parents so the entire family could eat for less than $10 total.
- Watch or just listen to the huddle recordings to hear how others are pivoting across the nation
- Entrepreneur Huddle
- Consultant HuddleTrends
- Social Enterprise – The Hub Student Café in Lewisburg, WV, part of a larger non- profit that helped kids learn job skills. Have USDA funds to feed kids afterschool and do STEM learning.
- Pre-packaged & Pre-made Foods Sales Are Up
- General Mills sales up 35%-45% last year
- UNFI CEO Interview
- 19 companies produce 70% of purchased foods in conventional grocery channel
- Far more in natural and organic, proven to be more resilient
- Thinks recession and change consumer habits could last 24 months
- Palermo’s [frozen] Pizza is up several hundred percent, running 24/7 and adding new shifts
- Future Consumer Index Poll
- 4 Categories of Spending
- “Cut Deep” – 27%; Hardest hit by the pandemic. Most pessimistic about the future. Spending less across all categories.
- “Stay Calm, Carry On” – 26%; Not changing their spending habits. Not directly impacted by the pandemic. Worried that others are stockpiling.
- “Save and stockpile” – 35%; Not so concerned about the pandemic, but worried about their families. Pessimistic about the long-term effects.
- “Hibernate and Spend” – 11%; Most concerned about the pandemic. But best positioned to deal with it. Optimistic for the future. Spending more across the board.
- Changed How They’re Shopping
- 42% Shopping has fundamentally changed – will continue to purchase online going forward
- Start thinking about an online sales marketing strategies! Watch Edible-Alpha®’s Getting Your Food Products Online Free On- Demand Course
- 34% – would pay more for local products
- 25% – would pay more for a trusted brand
- Investors focus on businesses with good brand loyalty
- 42% Shopping has fundamentally changed – will continue to purchase online going forward
- 4 Categories of Spending
- Looking at Data from the 2008-2009 Recession (to Predict COVID Business Trends)
- Necessities – Frozen went up 23%
- Comfort foods with value went up 48%
- Bulk foods
- Pot Pies, sides, and ready-made meals
- Luxury Brand market shrinks, so the messaging for this category tends to get quieter during a recession.
- If you have a premium product you need to know your audience.
- Premium beef went up
o Made at home instead of eating out, so it wasn’t asobvious when spending
- Premium beef went up
- If you have a premium product you need to know your audience.
- Simple Indulgences up – Alcohol, chocolate, CBD, marijuana
- Supplements went up – Also went up during COVID
- Protein powder has gone up 31% in the last two months during COVID
- Huge spike in immunity supplement sales (zinc, Vitamin C, etc.)
- Supplement sales data, as a whole is up 36%
- Personalized nutrients and diets (functional medicine) set to be a $4.2 Billion opportunity
- Impacts of COVID is mostly on the elderly and those with underlying conditions such heart disease, diabetes – all diet related.
- Federal Government Bailed Out Those “Too Big to Fail”
- Government doesn’t want to be perceived this way again
- Helping more small businesses out during COVID instead of JPMorgan Chase size businessesTips and Next Steps
- Pivot early and fast! – adapt your business or advise your clients to adapt their businesses to create new revenue streams, respond to current COVID trends, and prepare for the new normal post-COVID. Build resiliency into your business models now!
- Recovery legislation is likely on the way on all levels
- State budgets could become a big problem unless the federal government comes in to help due to their balanced budgets. Otherwise programs people rely on may not be there.
- Start thinking about online sales marketing strategies! Watch Edible-Alpha®’s Getting Your Food Products Online Free On-Demand Course
- Size up your competition with our Differentiation Worksheet