In the beginning of the year, Bush Brothers & Company is generally ramping up production of its lines of canned beans for summer grilling season.
But this year, CEO Al Williams noticed sales were skyrocketing much earlier than usual as consumers stocked their pantries for the stay-at-home orders to slow the spread of coronavirus.
"The first week of March, we saw a 50% increase in orders for that one week, and then within about four weeks of that, we saw about a 300% increase in orders," Williams said. "And then, of course, by that time you could see the shelves being emptied out."
Bush's manufacturing had to pivot and fast to keep products on grocery store shelves. Williams said he quickly limited production to top SKUs and kept factories running at full speed as much as the companies were able. It was a lot of work, especially given that the high demand summer season was still coming.
"We had a fair amount of inventory, so that was one of the benefits to us to really make it through that first few weeks of the big wave," he said.
Williams and two fellow CEOs — Ryals McMullian of Flowers Foods and Drew Facer of Idahoan — spoke about how they shifted and managed their production to be able to produce food for the pandemic at a webinar sponsored by the Consumer Brands Association on Wednesday afternoon. Huge increases in demand, a highly contagious virus and a changing consumer all add up to some of the most unique challenges that the leaders said they have faced.
McMullian said he faced difficulties from the beginning. Flowers Foods, which makes bread products, has practically no inventory. Products are made fresh, and the company utilizes direct-store-delivery, where they are taken directly to stores on a regular basis. The DSD model did a lot to help Flowers understand and meet demand, especially in the beginning of the pandemic, and McMullian said that there is no better way to serve retailers when your product is fresh.
McMullian said that Flowers also quickly started concentrating on its top SKUs and streamlining what it could produce in order to meet demand.
"We had a lot of experience with this, particularly in the Southeast because it's kind of the model we go to when a hurricane comes through Florida or Texas, or up the East Coast," McMullian said. "...The company knew how to do it, but we've never done it across all 46 bakeries before, so it was quite a feat to get it done."
Idahoan, which turns Idaho potatoes too small to sell on their own into a variety of side dishes, responded to the large increase in sales with quick research and marketing campaigns. In the face of a pandemic, consumers were a little more lenient with what they purchased, and many who might shun a processed product from Idahoan in favor of actual potatoes put Idahoan in their carts. In order to keep those consumers, Idahoan launched videos to communicate what goes into creating its products. Facer said it is important to show consumers that while their products are shelf stable and processed, they are essentially the same as what they would make at home.
"We felt like we had a unique opportunity to recreate and re-establish a foundation of trust with consumers," Facer said. "We know that people want products that offer convenience, quality, authenticity and save them time. So we felt like it was time for us to really communicate what our platform was."
Facer said Idahoan also commissioned IRI to do consumer research during this time. He said he doesn't want the pandemic to be a sales bump. He wants people to use Idahoan's products and become repeat consumers, something they won't do if they leave the packages they bought for quarantine in the back of their pantries.
Even though sales have been good and companies have been able to pivot, all three CEOs said dealing with the virus itself has been challenging. Food manufacturing workers have continued to come into plants and produce products throughout the pandemic, and keeping workers healthy and lines running has been difficult.
"We felt like we had a unique opportunity to recreate and re-establish a foundation of trust with consumers. We know that people want products that offer convenience, quality, authenticity and save them time. So we felt like it was time for us to really communicate what our platform was."
In late February and early March, Williams said Bush's didn't have enough personal protective equipment for the employees at its factories in Tennessee. There were also some employees who tested positive in the very beginning of the pandemic. Through a mix of determination and good fortune, Williams procured a coronavirus test for every employee through the University of Tennessee right before the federal government locked down the testing supply. He shut the plant down, tested every employee, deep cleaned the plant and implemented protective measures. The company was also able to buy a truckload of masks from a seller in Georgia. As the test results came back, six more employees had tested positive, so they and other employees who worked closely with them were placed on leave. And the plant reopened.
Flowers Foods has had to temporarily close down a couple of bakeries in recent months due to coronavirus cases among staff. The bakeries put several protective and screening measures to contain any outbreak, and plants all have tight restrictions on who can come inside, but cases among employees are slightly ticking upwards.
"The real challenge now is not spread within the bakers. We're doing temperature screening, doing all these different things," McMullian said. "It's what people are doing when they leave. And when the economy's opening back up, people socializing more, going back into restaurants and all that, that's in large measure why we've seen the number of cases rise a bit since about June."
Outside of manufacturing, the pandemic has also created major shifts in how the companies do their work. Since March, the administrative side of all of their businesses has been done with most employees remote. At Flowers, McMullian said there was never much of a push for more remote work before. He said he's pleased with how it's turned out and all that they have been able to get accomplished. When business can get back to normal, he said some of the strategies being mastered now can be used to help the company save on travel costs.
Facer said he has also been impressed with his employees' productivity, but at the same time he is concerned about missed opportunities for mentorship and training, as well as helping employees grow and develop. While some of that can be done virtually, he said it is not the same as it is in person.
Remote work has helped Bush's employees in a time that they need more flexibility, Williams said. It may become a permanent part of the way they do business.
"I think a lot of people love it," Williams said. "There is a camaraderie that you get from being around people, especially us. Culture's very important to us. And so we do want to get back together at some point. But I don't know that you ever go back to the way it was completely. ...I think it opened our eyes to a different way of doing some things. I think we'll continuously evaluate that."
Consumers have also changed, with more of them embracing online grocery ordering. Flowers Foods sees getting its products on the digital shelf is now as important as getting them on the physical shelf, McMullian said. The company has increased its marketing budget mostly for more exposure in e-commerce. Williams said they are doing the same. Canned beans have traditionally not been a big e-commerce product, but now Bush's is concentrating on learning more about how to make it into a digital shopping basket — and stay there in future trips.
Idahoan has a high degree of customer loyalty, Facer said. He noted that 90% of customers buying flavored mashed potatoes will purchase them again, and he hopes that e-commerce providers help build that by offering carts of "meal solutions" — packaged combinations of different products to make full meals.
"I think if we can use that as a better platform to help people build all those solutions and pull them together and take advantage of that, then it's going to build the [e-commerce] basket size," Facer said. "And there's hundreds of partners that can come together, that can work together, to benefit each others' brands. ...I am not looking at this naively just as our own brand, but how it serves the needs of the consumer on a more holistic basis."