Food and beverage industry during COVID-19: 4 survival strategies
The food and beverage industry has been hit particularly hard by the COVID-19 pandemic. And with a potential prolonged economic recession on the horizon, there’s no relief in sight for food and beverage companies.
Struggling ecosystem: Food & beverage industry during COVID-19
In a global economy ravaged by the pandemic, manufacturers are faced with supply chain disruptions and diminishing B2B sales.
Many of their retail partners, restaurants, and food outlets were forced to close during the peak of the pandemic, and traffic isn’t anywhere close to where it was pre-COVID.
Restaurants and cafés continue to face substantially lower demand and decreased sales due to closures or declining traffic. Many potential customers remain wary of dining out with COVID-19 cases still on the rise in many areas of the world and the fear of a second wave during fall and winter.
Grocery retailers, on the other hand, were faced with panic buying, resulting in inventory shortages and empty shelves across many different categories (toilet paper anyone?).
And as customers shifted massively to online grocery shopping — which is expected to become a $100 billion business by 2022 — many retailers are struggling to keep up with this abrupt change in purchasing habits.
Restaurant CX: How brands are locking in loyalty during COVID-19
Food brands have been sharing secret recipes, but it doesn’t mean they’ll lose business in the future. The restaurant customer experience during COVID simply isn’t the same without the human connection.
How food and beverage companies can survive and build resilience
Given all these challenges, here are some practical next steps companies in the food and beverage industry can take to weather the storm and position themselves for future growth.
- Go direct-to-consumer: As many companies are unable to sell goods through their traditional wholesale and retail partners, direct-to-consumer models are becoming more mainstream. By quickly standing up online stores directly for end consumers, you can make up for lost revenues and broaden your client base. Going direct-to-consumer allows you to control the brand experience, build direct customer relationships, and increase brand loyalty, even as the market struggles to recover.
- Establish a B2B customer portal for your distribution network: In addition to supplying consumers directly, food and beverage companies should also consider ways of improving the relationships with their B2B buyers, distribution networks, and retail partners. One way to do this is by offering them the same flexible online buying options and experiences that B2C customers enjoy. Establishing a B2B online customer portal can simplify complex B2B buying processes and provide a customer-centric approach across commerce, marketing, and service. With this approach, you can establish an even closer relationship with your distributors, increase market reach, and make sure orders and deliveries are processed smoothly.
- Assess supply chain resiliency and optimize inventory: Companies should mitigate the risk of supply chain disruption by focusing on vertical integration: sourcing more components and raw materials locally and taking greater ownership of supply. Inventory management and gaining a single view of inventory across the entire organization should also be a top priority. With physical locations, warehouses, and stores closed or disrupted, firms need greater transparency into where products are located. They also need to ensure that goods are strategically located near demand, so they can be delivered on time.
- Streamline e-commerce to adapt to changing customer needs: Lastly, establishing an online selling presence and streamlining your e-commerce and fulfillment operations is essential. Retailers and grocery stores need to have the tools in place to create engaging online and mobile experiences that enable customers to purchase through digital channels and have their groceries delivered directly to their homes.
Make sure you stay on top of quickly changing customer demands by optimizing your fulfillment processes and offering the flexible order options customers have come to expect during the pandemic, such as touchless ordering and payment or curbside pickup.
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