As a national distributor of food and drinks, we've continued to operate during this period of uncertainty for everyone. Through challenging and unprecedented times, we've endeavoured to give a sense of normality for our customers and those working from home, whilst continuing to provide a route to market for start-up and challenger brands, most of which make up the majority of our product portfolio. Being in the middle of the supply chain, what is clear, the food and drink distribution market will likely change forever.
"How will food & drink supply look after coronavirus?"
Our Managing Director and Co-Founder, Ben McKechnie, has given his take on how Independent Retailers and the wider snacking category will be impacted, as well as his insight and thoughts on what the near future might look like, and what good might actually prevail from all of this.
An Insight from the Top - Ben McKechnie
"It goes without saying that we’re in the middle of a huge disruption to not only to our shops and food-service outlets but to our society & culture as a whole. It’s probable that this will have far reaching implications extending long beyond the immediate disruption.
The pandemic has fast-forwarded the shift to online that was already having such a big impact on the high street and consumer shopping behaviour, and the post crisis landscape – the new normal - is going to look very different to what we’ve been used to. That said, it’s perhaps not going to be too different to the landscape that’s been so often discussed in recent years, and once the dust settles whilst the names may have changed and power centres shifted somewhat it won’t be entirely alien.
The seismic speed at which it’s happened is what’s called a Black Swan event. These happen rarely – think 9/11 and the financial meltdown of 2008 - and they’re always catastrophic to businesses already feeling pressure, but they also present opportunities to the nimble, quick footed business able to pivot and adapt quickly. The global scale of this one, though, is unheard of in modern times. We have to really go back to WWII to find an equivalent, and even the most experienced politicians and business leaders haven’t really got more than an educated opinion of how things will progress over the next few weeks and months. 'Disease X' was talked about but most of us never really paid that much attention.
"A huge number of our customers have responded admirably"
Many food service businesses have been stopped in their tracks overnight and food retail too has been faced with massive disruption, not least from the massive surge in the core staples of loo roll, pasta, and bananas. However, with the initial stocking up done we’re all faced with severely restricted ‘offline’ shopping and a consumer that has had a chance to acclimatise. A huge number of our customers have responded admirably and it’s massively encouraging to see how many have pivoted into new ways of bringing in income. The speed at which home delivery, direct to consumer, click & collect, and boxing operations have been established is testament to the innovative thinking of the management teams behind these businesses large and small.
Direct to consumer is not an easy thing to get right, however, and merely getting to grips with the distance selling regulations – the right of returning orders at will with the seller obliged to pay to it – present a real potential headache for food businesses. Then there’s getting orders delivered at the time the consumer wants them, in exactly the manner they need. People are unlikely to be out when the courier arrives right now, of course, so those new to D2C businesses have a welcome grace period but, as consumers, we’ve all become accustomed to the addiction of Amazon Prime and that’s what all new home delivery services are being compared to. This in itself, however, offers an opportunity to do it better – inappropriately sized boxes, for instance, are arguably a common frustration of Amazon customers and something that can be bettered fairly easily (…if you can find the right box for yourself).
Then there’s the not insignificant task of getting good messaging in front of the right consumers at the time they’re making their buying decisions ( this is not necessarily the same time as they’re shopping). Hundreds – thousands - of online businesses have suddenly emerged all competing for the ‘Work From Home’ and grocery home delivery market and all focusing everything they’ve got into rapidly building a D2C presence. All the big wholesalers have opened up their websites to consumer home deliveries, and many not quite so big are doing the same to varying degrees. Many have created full consumer facing websites offering single item / split cases and curated snack boxes for every different type of occasion. A google search for Snacks Delivery UK offers 231 million results.
"Consumer buying habits & trends that were already moving online have now taken point position"
Amidst all of that we’ve then got the suppliers too. Whilst some have enjoyed surges in demand of core lines, most have been severely hit. The small innovative challenger brands that have provided so much growth and differentiation in recent years have seen their customers bases shattered and consumers too worried about making sure they have the basics to think about picking up their not-so-long-ago favourites. With everyone working from home, impulse snacking has been an afterthought temporarily pushed to the back of mind in the race to stock up on staples. The impact hasn’t yet finished reverberating through all of these up and coming brands. The best of these challenger brands, however, having invested their modest resources into building their disciples and followers on social media are now themselves pivoting to offer their own home delivery.
This bypassing of traditional retail and the sudden focus on ‘wholetailing’ (note, Costco has been doing this for years) was happening anyway, it’s nothing new but it has now been forced front and centre. Consumer buying habits & trends that were already moving online have now taken point position, and a significant amount of day-to-day shopping is probably going to remain online. Within both independent retail and food-service, we’re seeing those most forward-thinking businesses holding up surprisingly well due to the quick thinking of their management and adaptability of their teams, and its these businesses that are likely to thrive in post-corona Britain.
We were already seeing the most innovative outlets creating destinations for their local communities. Shops, cafes, food markets, leisure venues blending retail, eating out, eating on the go and socialising together into some fantastic settings that draw customers for the pleasurable (and instagramable) experience alongside serving their shopping and impulse needs. This is going to be vital post-covid-19. As consumers do more of their day-to-day shopping online, high-street and community stores will need to offer far more than simply a selection of groceries. They’re going to need to create an offer that spans the hierarchy of needs from the basic essentials through to the self-esteem / social needs of the modern consumer. Consumers will be demanding the shops and outlets they choose to spend their free time visiting, reward them by making that visit an enjoyable, social experience that they’ll happily advocate to their friends and peers.
"It's going to be essential for independents to carve out their niches"
There’s many, many small businesses struggling of course and hopefully the lifelines the government have set up will allow a good proportion of these businesses to survive the next few weeks until we see some relaxing of the lockdown and the bounce begins. People will be able to get out and spend again but the huge economic consequences are going to be with us for a long time. Consumer trends are going to shift with health and wellness becoming even more prominent and the move towards greatly increased working from home will shift a considerable amount of consumer spending from city centres to local community retailers and venues.
Again, this shift to local convenience is not new, and those independents that come out of the other side of the immediate crisis will be uniquely positioned to serve this shift. Our Independent customers have an opportunity to take advantage of the great levelling effect on their large competitors, and retain the new found customers who have rediscovered the benefits of their local services. The temptation to cut ranges back to low cost, commodity brands may be strong but giving too much focus to these staples will risk losing the unique opportunity they will have in the coming months. It's going to be essential for independents to carve out their niches through differentiating their offer and giving their customers that reason to come in.
It is through the great entrepreneurial instincts of the challengers that independent businesses are going to be able to do that. Those retailers can meet the challenger by offering an in store experience and diversity of products and services the big boys couldn’t hope to keep up with. Challenger brands are quick to respond to and shape consumer trends and are the immediate source of providing that differentiated offering.
Our part, as a focused distributor with the greatest range of challenger brands, to is give you the opportunity to do just that. Our aim is to build a deep understanding of these rapidly moving growth and emerging trends and to curate a range of the best brands to satisfy them. We’re always learning from suppliers, customers, and consumers and we want to share that knowledge and experience through the range and advice we offer to all of our customers. We’re here ready to help you come out of this crisis stronger".