When Arno Hesse speaks, business leaders listen.
Hesse, a co-leader and investor with Slow Money Northern California, knows everyone is concerned about how COVID-19 will change communities nationwide.
Because it impacts everything else, Hesse argues that the most important question to answer right now is “How do we keep our local food sources alive and afloat in the coming weeks and months? “
As some farmers see their highest incomes ever and hit subscriber limits, Hesse says these are the ones with good mailing lists and strong email marketers.
“If you have a direct channel, turn it on,” Hesse says. “Now is when you really want to use it. “
Health food brands that do not have a direct channel in terms of ingredient sources should take stock of their inventories. If a brand has enough inventory, a mailing list, and subscribers, now is the time to start an online store that offers delivery.
Keep in mind that if UNFI continues to increase your orders because the shelves are empty and your inventory eventually runs out, brands could end up excluding both channels in addition to customers.
This is where long-term subscription or gift card models can help pay bills and employees to free up cash to buy more inventory. With so many small businesses trying to find finance during COVID-19, Hesse also recommends considering lenders such as Kiva, a non-profit microfinance organization or Mission-driven finance, an impact investing and B Corporation certified company in San Diego that provides commercial loans to small businesses and nonprofits.
“We are distancing ourselves socially, but we’re actually trying to get closer now economically, ”Hesse said.
Help your frontline workers while donating to communities
Arjan Stephens, Managing Director of Nature’s Path Foods, spoke to other food manufacturers and a legal team to create a letter titled “Critical Infrastructure Team Members Travel” that his technically essential employees carry now in case they are arrested on their way to work.
Quoting the Presidential Policy Directive 21 (PPD-21) which identified the food and agriculture sector as critical infrastructure, the letter details how Nature’s Path employees provide a vital service in helping to ensure food products are available to the public.
Doing this has helped the 500 people who work at Nature’s Path’s three factories located in Blaine, Washington; Sussex, Wisconsin; and the Canadian province of British Columbia.
Since the start of the pandemic, Nature’s Path has increased each team member’s frontline pay by an additional $ 2 per hour, AKA a heroic bounty. Anyone employed by Nature’s Path on or before March 1 also received a “Heroic Bounty” of $ 250.
“We believe all of our team members are heroes in this fight,” Stephens said.
Nature’s Path now offers an employee referral bonus of $ 1,000, split between a bonus of $ 500 given after an employee has worked for three months with the company and $ 500 given after the first anniversary of hiring. ‘an employee.
Stephens says paid leave for employees has been extended to two weeks, on top of what was already offered to them. The company has also implemented additional pay rise bonuses for employees who train other people to work on multiple pieces of equipment.
“We’ve always had cross-training, but we realized that now we had to go faster,” says Stephens. “If our essential skilled roles get sick, we must continue to produce food. Our goal is not to fire anyone at this time. “
As pantries and grocery store shelves run out of produce and more people lose their jobs, Stephens says businesses need to donate both food and money. In recent weeks, Stephens said Nature’s Path has donated approximately 6,000 cases of organic oatmeal and baked goods to charities and pledged to donate at least 1.5 million dollars in the company’s proceeds to various food banks and charities over the next 12 months, working with nonprofits including Blessings in a backpack, Feed the children and The Salvation Army.
Stephens’ advice to other health food entrepreneurs is: “People’s demand for organic food products will continue to grow. There could be a drop with the recession, but in the long run, eating healthy and being healthy is not going to go away. “
Switch to direct-to-consumer sales
Trishna Saigal, Founder and CEO of Down to Cook, which makes Adda Veggie protein blends, launched her business in June 2019, selling primarily in farmers’ markets.
After switching brands and creating new packaging in January, Saigal was officially ready to launch products into retail. She was in the midst of negotiations when the COVID-19 pandemic hit.
“Everything has changed,” says Saigal, who lives in El Cerrito, California. “Everyone has to find their own way forward. “
Within days, Saigal’s corporate food and catering accounts, which included the Berkeley City Club, Guckenheimer Events, and Catering and Fare Resources, immediately evaporated. Ditto in terms of discussions with meal kit companies like Gobble, with whom its product was in the pilot phase.
“I had to think, ‘How can I do this when the only channel that’s really left is straight to the consumer? ”Says Saigal, who has a store on his website. downtocookfoods.com.
She is assisted by a team of consultants to cover sales and strategy, digital marketing, a graphic designer who helps with the website and packaging, as well as chefs for recipe development and catering account support. ‘business.
In February, Saigal went from a commercial kitchen to a co-packer – Old California Sourdough Company – in Hayward, Calif., Because they were closer to her home, only had a minimum fill of 100. pounds and could handle his 10-pound commercial food service quantities. and 3-ounce servings for retail packaging.
It was a much better decision in hindsight, she says, than choosing a co-packer in Los Angeles, which would be nearly impossible to access now from his home in the Bay Area amid the coronavirus pandemic.
The timing of COVID-19 couldn’t be worse for Saigal as she is about to give birth to her first child. And she’s still trying to figure out her next steps. Saigal was planning to launch on Amazon this fall, but is trying to move forward on schedule.
“I feel lucky that at least my product is dry and I can do e-commerce,” Saigal says.
Consider caps on food production and SKU reduction
As many companies try to increase production, Sadie Scheffer, CEO and Founder of Bread SRSLY, takes an interesting approach.
“We have capped food production so as not to stress our team,” says Scheffer. “Because the health of the team is our most important asset at the moment. “
This means that even though sales are high, Scheffer is deliberately keeping their capacity below normal.
“This way our team has an easier time dealing with curved balls and absentees,” she said. “It’s too early in the game to be overdrive.”
She prioritizes Bread SRSLY’s e-commerce sales to facilitate cash flow as they are prepaid while having more in-depth conversations with wholesale buyers to communicate the latest updates as to whether they can. to execute a command or not.
Scheffer says it is also removing some of its most labor-intensive storage units, such as its buns, which is also its least profitable product, to prioritize popular SKUs like their sourdough bread. classic in order to satisfy the greatest number of customers.
Regardless of which products are reduced or added, Scheffer says it is essential that all business owners register with their employees on a daily basis.
“Talk to your people,” says Scheffer. “The most important thing is to understand where they are at every day. “