In the Chinese language, the word “crisis” bears the meaning of “opportunity.” In the case of North American Food & Beverage brands, we believe the 1.4 billion people Chinese market will be an opportunity for foreign goods as consumers trust foreign brands more than local ones. It is an opportune time to develop strategies for sales growth in China and other foreign export markets.
In addition, F&B brands can capitalize on the trends occurring in the U.S. to advance their businesses during – and after – this health crisis. Consider the following trends and actions to separate your brand from competitors in your category:
- Consumer Trends
- 69% of consumers are buying different brands than usual; excellent opportunity for trial and sampling with aim of new customer acquisition
- Shift from foodservice consumption to retail grocery and e-commerce. Consider downsizing FS pack sizes to smaller consumer packs.
- Kroger reporting +30% growth in all categories vs. 2% LY (+28% for all retail grocery)
- Building material & home improvement stores +7.6% vs LY, indicating consumers are simply eating at home and making home improvements
- All other retail sectors declined significantly, including:
- Electronics & appliance stores -15.9%
- Clothing & accessories stores -50.7%
- Sporting goods, music, & book stores -22.7&
- It’s hard to purchase products when most retail stores are shuttered
- As a result, E-Commerce sales increased +12% vs LY. Consider deploying more A&P spending in e-commerce and away from traditional media, and optimizing your presence and product portfolio on platforms such as Amazon, Jet, T-Mall, Ocado and Rakuten.
- Manufacturers Should Focus On:
- Customer communication; remaining relevant
- Updating financial assumptions, including sales forecasts, AR, and cost of capital
- Capital; sufficient liquidity to maintain optimum inventory levels during a slowdown in demand
- Monitoring the credit risk of customers and suppliers
- Supply chain; ensuring input availability while containing costs
- Establish protocols for working on site and develop best practices for social distancing