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Small Business Perspective: How a Global Pandemic Impacts My Food Business

 How a Global Pandemic Impacts My Food Business
How a Global Pandemic Impacts My Food Business

March 15, 2020

First and foremost: I hope everyone is staying safe and healthy, and my heart goes out to everyone impacted by COVID-19, especially those infected and in the front lines. 

I know all of our inboxes and social media have been flooded with Coronavirus, and it’s hard not to feel the impact it’s having on our daily lives. From social distancing to being OCD about hygiene to hoarding toilet paper -- this truly has been the craziest “crisis” in my lifetime. I’m especially feeling the impacts as a small business owner, so I wanted to share an honest, candid look into how COVID-19 is affecting gr8nola (for better and for worse), which hopefully provides one lens into the thousands of owners and workers suffering from this global pandemic.

Food service sales will see a huge decline: The majority of my business is supplying gr8nola at tech offices like Google, Twitter, and hundreds more (primarily in COVID-19 “hot areas” like Washington state and California) that are now implementing remote work. I reached out to my distributors who supply gr8nola to these offices and this is what they’ve been saying (note this was 3/12/20 and things have been changing by the minute): We have seen an unprecedented slowdown in the last 2 weeks and our operations have reacted accordingly. I hate to be the bearer of bad news, but we will not be ordering anything for the next 2-3 weeks as we navigate the situation.” Food service represents a huge part of my business, so I’ll be expecting a significant drop in revenue until things normalize and employees go back to the office.

Online sales (Amazon especially) is seeing a huge uptick: On the flip side, everyone is stockpiling household and pantry items online. March to date, there's been a significant increase in Amazon sales vs. last month, primarily in bulk 5lb bags. However, online sales represents a much smaller portion of my business vs. food service, so while it’s a small win, it won’t make up for the losses from the tech offices.

Retail sales -- jury’s out: With everyone stocking up on household goods and shelf stable foods, I’m hopeful that gr8nola is selling more in the 60+ stores I’m in, but I won’t know until I get the data. However, it seems most consumers are shopping at big box retailers like Costco, Walmart, Sam’s Club and less at the mom-and-pop shops. Where this will impact gr8nola the most is that I can’t support my existing stores with demos (in-store samplings are being canceled), nor can I sell into new stores as effectively since retailers are in survival mode and not thinking about which new products to bring in. Retail was expected to be my biggest growth channel for 2020, which will now have to wait. 

My silver lining & mindset: Overall, I’m very fortunate because I operate very lean and don’t have a lot of fixed expenses nor employees. I’m also a huge believer of “what doesn’t kill you makes you stronger,” and this creates an even greater sense of urgency to make my business crisis/recession-proof by having more diversity in channels, building towards profitability and continuing to operate as lean as possible.

Many businesses -- especially in food service -- are wondering if they will get out of this alive. As I plan and prepare for my next steps to hit the ground running when things do clear up, I encourage everyone to think about the little guys and support small businesses as much as possible, in good times and most importantly, in times like the present. After all, small businesses are the life and backbone of this economy.

Stay healthy and positive,