The global spread of COVID-19 is deeply affecting individuals and companies alike. It’s taking a devastating toll on lives, businesses and communities. It’s upending how companies operate and is shattering supply chains around the world.
Yet, even during this time of upheaval, food and beverage companies are mobilizing in unprecedented ways to protect lives and to defeat the disease. Many companies, both large and small, are stepping up to help their communities and pivoting their businesses to supply essential products and to provide humanitarian relief.
When the coronavirus hit the US, the food and beverage industry found itself on the front lines of a war. What followed has been a massive transformation likely to have lasting consequences for the industry and the nation. Food and beverage before the virus will not resemble the industry during or after.
The industry has adapted at a rapid pace, responding with ideas and measures to protect employees and customers, and keep up with demand. Despite fighting the uphill struggle to stay in business, food and beverage companies have innovated and adapted. Here are some of the ways business are adapting and contributing during this global crisis.
Innovating Under Pressure
In the beverage industry, local distilleries and bigger companies like Pernod-Ricard, Diageo and Anheuser-Busch re-directed their production lines to manufacture sanitizer, helping alleviate the shortage created by consumers who emptied store shelves. Spirit of York Distillery Co., which is located in Toronto’s Distillery Historic District, also started making alcohol-based hand solution and many local distilleries followed suit.
Many companies changed how they reached customers. Peapod, Instacart and other services were overwhelmed as online ordering from supermarkets gained popularity. Chains with drive-throughs stayed open. McDonald’s, in a letter to customers, talked about “convenient and contactless” ways to buy food from drive-through to mobile order-and-pay. National chains like McDonald’s and Subway offered free delivery. Dunkin’ Donuts tapped Grubhub as more stores and companies found they could no longer rely on their old business models. Companies recognized they had to deliver or risk seeing sales drop further.
Restaurants, such as Panera, shifted to selling retail grocery items as their meal revenue dried up. Farmers began selling direct to consumers, although some simply dumped produce, creating images of a severed supply chain. Manufacturers stepped up to shift production for safety and medical equipment, while grocers started working around the clock to restock shelves, and big food companies shifted production to meet the needs of the public.
Giving Back to Employees
With essential workers on the front line, employee health and protection are key. Companies have been keeping staff as long as they can by utilizing them to perform multiple functions such as delivering, cooking and cleaning. PepsiCo, Mondelez and Hormel Foods are a few among the businesses rewarding their workers with bonuses, additional leave time and raises. Nestlé US has guaranteed three-months pay for workers at impacted facilities and may slow product rollouts as grocers prioritize keeping shelves stocked.
Companies have been reaching out to others that furloughed staff, as manufacturers hire and retrain restaurant employees. Papa John’s said it is hiring 20,000 employees in the near term, and Fresh Market is hiring 1,600 workers and reaching out to others. The industry has pulled together, and some companies have been creative in ways to pay and keep workers employed.
Meanwhile, stores and manufacturers took precautions to protect their workforce and customers. Albertsons, Stop & Shop, Walmart, Publix, Kroger and many others put up plexiglass barriers at checkout counters. Kroger added partitions at its pharmacy and in-store Starbucks locations. Many retailers, including Costco, are also limiting the number of shoppers permitted through their doors at any one time, with monitors managing lines at six-foot intervals. Perdue Farms said it was installing partitions to separate workers. And Tyson Foods announced infrared body temperature scans to detect fevers.
Charity and Customer Care
While companies struggled, big and small players stepped up with donations as demand grew. Starbucks set aside $10 million for its workers. Target said it was donating 2 million KN95 respirator masks to healthcare providers. Meanwhile, Coca-Cola approved $13.5 million in grants in North America, largely for food distribution, on top of smaller grants. PepsiCo pledged $45 million in global relief for areas affected by coronavirus, including $15.8 million in North America.
Unilever, the global consumer-goods company, launched a sweeping Sustainable Living Plan in 2010 with the aim of improving the health and well-being of more than one billion people by 2020. It’s now leveraging its social purpose to make sustainable living commonplace by donating $155 million worth of soap, sanitizer, bleach and food to help protect people’s lives around the globe. It’s also providing $775 million of cash flow relief for early payments to its small suppliers and extending credit to small-scale retail customers to help them manage and protect jobs.
Stores got creative in protecting at-risk populations and first responders. Stop and Shop is offering special shopping hours to customers 60 and older and other stores created special hours for first responders and other healthcare workers. Walmart, Kroger, Hy-Vee and other supermarkets debuted one-way aisles and limited customers. BJ’s Wholesale Club is limiting shoppers and permitting households to send only one person at a time.
What It All Means
Who could have imagined exclusive shopping hours for first responders or for those over 60, or one-way supermarket aisles, just months ago? Liquor companies making hand sanitizer? Companies delaying new product launches to keep up with demand? Or calls for combat pay by grocery clerks? Recent weeks have been a case study of an industry reinventing itself, as companies redefine business as usual.
The food and beverage industry’s response may be one of the biggest stories of any industry in history. When we look back, this will be seen as a time of tribulation, but also of innovation since necessity is still the driver of invention. And as the crisis continues, expect more change before we settle into a new, but likely very different, normal.