Preparing for a Post-COVID World

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We’ve all been taking things one day at a time, but members of the industry are beginning to consider what will happen post-pandemic.

At the Natural Product Association’s (NPA) The Big Natural (TBN), which took place November 30-December 1, there was a sentiment echoed by experts across the conference: Dietary supplements are popular now. Steve Rosenman, SVP Corporate Development, Marketing & Innovation, at International Vitamin Corporation, discussed the state of the market in COVID-19 and the Supply Chain. He noted that immune supplements are causing overall industry growth—some supplements, he said, have grown 100%. 2020 total sales could work out to around $55 billion, which is $6 billion higher than 2019 and $3 billion higher than expected. He told attendees that industry experts expect a positive dollar impact from COVID for around 3 years, and for e-commerce to continue to be a major trend. Rosenman showed a chart supporting this, which portrayed immune supplement sales spiking in mid-March, followed by a slow leveling off to a level that was, nonetheless, higher than pre-COVID.

In an interview with WholeFoods, Andrew Therrien, Director of Business Development at Samplers Inc., said there’s a feeling among his clients that COVID-based growth will continue, rather than being a “blip on the radar,” sales-wise. But the industry must prepare and forecast. Therrien’s concern is that companies will look at sales for the year, and expect to beat them in 2021 and onward. “At least 25 clients have told me this in 2021 planning,” he said. The problem with that, he explained, is that companies won’t be able to meet it. “We’re going to have sort of a fatigue that’s going to happen after COVID and things get back to whatever normal might be—there’s this forecasting that we’re going to grow this business 15%, but consumers are going to want to go out and do things, once it’s safe to do so. If you’re a piemaker and the other piemaker in town closes, your business will go up—but once another piemaker opens, your sales will go back down. There’s only so much food people can eat.”

Thus, Therrien cautions of waste and spiking costs: “There’s going to be this lag where businesses don’t want to go backwards, want to commit to suppliers for raw materials. I think that’s a mistake, because there’s going to be waste and a lot of food spoilage. Prices are going to go through the roof, because companies have to make up for what they don’t sell,” he predicted. “You’re going to see small businesses that don’t forecast well close. You’re going to see private equity firms steal people’s dreams. And young, talented people who are passionate about this are going to leave because they’re not going to get the commissions and the jobs that they need.

“That will be a shame,” Therrien continued, “because the one thing I can tell within this specialty space is that—it’s unique. I’ve worked in tech, in other industries—there’s no industry where it’s truly like an ecosystem, where people are trying to help each other, a rising tides lift all boats scenario. If we lose that youth and inventiveness and the culture of what we’re trying to do, it would be a huge shame.”

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But there are things that can be done. Namely: prepare. On the manufacturer and supplier end, that may mean a whole new technology. Speaking at TBN, Adel Villalobos, President and CEO of Lief Labs, explained that his company has created an app to help prevent out-of-stocks for their clients. “We’re a custom manufacturer,” he told attendees in the session COVID-19 and the Supply Chain. “We can’t do overnights. So we’d have a customer call up, tell us they had 13 weeks’ worth of stock, and place an order that we would fill in 10 weeks—and then two weeks later, they’d call us and tell us they were out of stock.” Getting forecasts from some clients proved difficult, and Lief Labs needed a way to better understand clients’ needs. The solution: the TrueStock App. “It’s easy and our clients use it,” Villalobos said. “They put their data in, we use it to forecast what they might need. Since the app launched in March, we’ve gotten 10 companies using this technology, and they have had no out-of-stocks. Obviously, it’s too soon to tell much of anything, but that’s pretty good.”

Therrien told WholeFoods Magazine that retailers can prepare, too—both when it comes to preventing overstocks, and when it comes to prepping their stores for post-COVID times. “I think retailers and distributors can set expectations,” he said. “They can say to manufacturers, I don’t want you to go out of stock, but I also don’t want you to cry poverty because you set unrealistic expectations and all of a sudden you’re at 90% of last year.” Long-term, that doesn’t just hurt the manufacturer—Therrien pointed out that it will trickle down to the retailer and the consumer, too.

When it comes to in-store prep, Therrien thinks retailers need to start looking to the future. “Frontline retailers are burnt out—it’s really hard to hire, it’s hard to staff. People accept it if you can’t find an associate or there’s out of stocks, or the store might just look disheveled, because it’s COVID. The store needs to get buttoned up after COVID, that’s one thing. And getting people in there who can be friendly helpers. If I’m going to spend 30% more because I’m eating healthier, I want an associate who can actually answer questions about ingredients and products. That’s part of what I do. We do in-store execution of demos and merchandising—make sure the product is there, that it looked right on the shelf, that displays were set up properly, that education happened. We tried to put recipes together, cross-merchandise across multiple sections of the store to get better-for-you 20-minute meal ideas.”

The other part of what Therrien does, he says, may be a relief when families are looking to get out of the house post-COVID. “I put on events and promotions—just an outside-the-box event, that sometimes focuses on sales but sometimes just gives families something to do before they do their shopping. Have music playing, or even just the firetruck and police car—or something as simple as linking up with the local chapter of the ASPCA to have a dog adoption day at the store.”

Rosenman pointed out in his presentation at TBN that brick & mortar stores are helping customers make it through COVID, and are being rewarded with solid demand. Natural, Health, and Specialty channel share of vitamins rose 5%, outpacing conventional stores. Some ingredients face oversupply—he pointed to curcumin, which still faces strong consumer demand, but store closures and fewer shopping trips have limited consumers’ ability to actually get to the products, leading to an oversupply. Pricing is stable, he noted, as this is likely a temporary situation.

We’re still in COVID times. Post-COVID may roll out slow as vaccinations are produced. As Therrien says, it won’t be like this forever. “Spend this time wisely, to make the transition easier. We have such a good thing going, with the culture of our industry. The energy and the genuine aspect of it is something that I don’t think you see anywhere—there’s no other industry that has the passion that we see. And I’d hate to see that not be what it is today because of a blip on the radar.”

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