Pivoting strategies with sticking power

Catherine Sayer

They say when one door closes, another one opens. Admittedly, when you are focused on the door that’s closing, it can be overwhelming, particularly in a year like 2020, but like most clichés, it happens often enough to have the ring of truth about it.

By Food South Australia CEO Catherine Sayer. 

Covid-19 slammed doors all over the place, but for some months now there has been discussion about the opportunities Covid-19 has delivered along with the challenges. So, are new doors really opening?

It seems they are.

For example, consumer research from around the globe is showing that Covid-19 has super-charged demand for personalised products targeting wellness, immune health and convenience. That’s resonating with the Australian government who recently released its Manufacturing Priority roadmap for the food and beverage sector, which recognises existing Australian manufacturing strengths in this category and is now providing support through the Modern Manufacturing Initiative fund to help food and beverage manufacturers make the most of the opportunity.

The search for plant-based alternatives has gone beyond replacing meat or dairy and on to the desire for enhanced sources of protein, along with greater consumer focus on the planet. Sustainability means more than it used to – it’s now about responsible and conscious business management as well as protecting the environment.

It’s not enough to ‘feel’ good, business now has to ‘be’ good – and prove it.

Then there’s the world of e-commerce. Consumers went online in droves last year. Some are now back in the stores but even so, the restrictions accelerated traffic online and that’s delivered a greater sense of confidence and comfort using online ordering among consumer segments who were previously slower to adopt this technology.

We are all aware of the rapid pivoting of many food and beverage businesses last year – but the question now is which of those strategies has sticking power in the face of the ‘next normal’ for food and beverage? That’s the question we’ve been asking in our Covid-19 Response and Recovery survey of South Australian food and beverage manufacturers.

This survey follows our initial impact surveys undertaken in April and May 2020 and is revealing learnings for both manufacturers and their customers.

While the survey is still open at the time I’m writing this, early indicators are that for South Australian food and beverage businesses at least, a key strategy has been the development of closer relationships with customers, and seeking opportunities to present products in different formats to give customers and consumers more options and greater flexibility.

Approximately half the businesses who have responded to our survey so far have reported they diversified sales channels in response to the pandemic, with the most popular strategies including diversifying from food service to retail, adding e-commerce facilities to be able to supply consumers direct, or diversifying from wholesale to retail.

So far, around 30% of respondents to date have indicated they also changed product sizes and packaging to meet requirements for new sales channels. New product development also appears to have been a popular strategy, while diversifying into new markets has also been a frequent response.

Businesses motivated to work more closely with customers and seek out these diversification opportunities is good for everyone along the value chain, and it’s certainly a strategy that is likely to continue.

At this point, and perhaps counterintuitively, our survey responses to date are showing the overall impact of the pandemic on South Australian food and beverage business has actually been somewhat positive. Now, I’ll be the first to say that it’s really still early days, but that’s why we want to understand what has happened and where those all-important opportunities now are.

Other doors now opening for our sector, and strategies with the potential to keep on delivering in the new environment, will also be the focus at the 2021 Food South Australia Summit on 2 June, when our program of global and national speakers will be offering their insights on what this all-important ‘next normal’ looks like at the global level, where the actionable insights are, and how to recognise the signals the emerging trends are sending.

It’s interesting to see that over half the respondents to our Covid-19 survey participated in our first online Summit last year or accessed the sessions on our website, making the most of the expert learnings and insights on offer. This year we are presenting the Summit as a hybrid event so you can attend in person or join us online if you can’t make it to Adelaide. Registrations are now open here – I will hope to see you there either in person or online.

For more information, visit Food South Australia Summit.

 

About Catherine Sayer

Catherine has led Food South Australia since it was established in 2010, passionately guiding the development of the industry’s peak body with a focus on industry growth and advocacy. She also is a member of and chairs a number of boards.

catherine@foodsa.com.au

About Food South Australia

Food South Australia is the state’s peak body for the food and beverage industry, with a mission to support and sustain the industry in the state by helping businesses of all sizes to grow their markets, capability, and industry connections. Food South Australia is independent, industry led, and membership based.

For more information, visit foodsouthaustralia.com.au.