Feast or famine? Natural foods companies grapple with COVID realities
BOULDER — While everyone needs to eat — pandemic or no pandemic — and grocery stores have mostly thrived through the COVID-19 outbreak, the virus has created some unique challenges for the Boulder Valley region’s natural and organic product makers.
Those challenges range from distribution and supply chain bottlenecks, to the lack of networking opportunities resulting from the cancellation of trade shows such as Expo West, to the simple act of making sure companies have enough healthy workers to staff a full production line, according to industry leaders who participated this week in BizWest’s Natural and Organic Products CEO Roundtable.
Because the pandemic has thrown virtually every aspect of the world economy into turmoil and there’s no end in sight, planning inventories and budgeting sale projections for next fiscal year and beyond can feel like a crapshoot, WishGarden Herbs CEO Sam Hunziker said.
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Planning in the food industry is especially important given that many products cannot just sit on shelves for months at a time.
“There’s been unpredictability in demand,” Claremont Foods CEO Alex Cioth said. “When the pandemic hit, we got surges of orders. So we added shifts and hired. Then around June, calls started coming asking to push [purchase orders] back” months in some cases.
Wholesalers that supply different types of customers face difficulties. For example, Sage 5 Foods sells rice to both drive-though and sit-down restaurants. The former of which are “killing it” while the later “aren’t doing so well,” Sage V CEO Peter Vegas said.
Rowdy Mermaid CEO Jamba Dunn said his company faced issues with distribution and getting products to retailers early in the pandemic and fast-tracked the development of a direct-to-consumer sales channel in response.
The newly launched D2C business “requires a lot more work that we initially thought in terms of fulfilment and marketing,” he said, and the economic unknowns that make planning the future difficult make the decision about whether to continue heavy investment in D2C sales even more challenging.
Still, with many consumers wary of shopping around large crowds, the industry could be entering a new era of D2C engagement and firms ought to be ready, ReMarkable Foods LLC founder Mark Wood said
Olomomo Nut Co. founder and entrepreneurship consultant Justin Perkins agreed, saying that innovative companies should view the pandemic as a “crisi-tunity” — a portmanteau of crisis and opportunity.
Many grocery stores saw runs on essential products during the early days of the outbreak and keeping shelves stocked has been an ongoing uphill battle for retailers. This presents both opportunities and challenges for Boulder-area firms.
On one hand, retailers are leaning heavily on major, established suppliers with track records of successfully filling large orders, Goods Karma Foods CEO Doug Radi said. As a result, “big brands are gaining a little more power in the equation.”
On the other hand, if established brands stumble, the door opens to new entrants.
“We’re trying to beat Clorox to those empty shelves,” 1908 Brands CEO Steve Savage said. 1908 is the parent company behind the Boulder Clean line of cleaning supplies.
In the natural and organic industry, more so than many, trade shows serve a role of critical importance.,
Firms were “heavily reliant and trial-driving activities pre-COVID,” which Ancient inGRAINed Snack Co. CEO Dustin Finkel said has led industry leaders to contemplate how companies can innovate and get products into new customers’ and investors’ mouths.
COVID-19 resulted in the cancellation of all of the industry’s events, and next year’s events are in jeopardy.
Without events such as Expo West, it can be a “challenge to educate and communicate to consumers what our brand is all about,” A2 Milk CEO Blake Waltrip said.
The pandemic has not only affected trade shows but also the way companies conduct everyday business.
“We have a craving for in-person events to resume,” Naturally Boulder board chairman John Grubb said. “It has certainly been a challenge and everyone is fatigued” from working remotely for months.
Because the outbreak has limited peoples’ ability to exercise and recreate, many consumers are increasing their focus on what goes into their bodies, said Mulay’s Sausage Corp. CEO Loree Weisman.
This trend could be a boon for natural and organic products, which are often perceived as more healthy.
The CEO Roundtables are sponsored by Plante Moran, Berg Hill Greenleaf Ruscitti LLLP and Bank of Colorado.
