Managing customer relationships during the virus

The growing outbreak of the corona virus is a reminder that the food and beverage industry is essential to life and just how important the work is that you do. It is one thing if a clothing store is out of stock because their container from Asia did not arrive, but quite different when consumers start to see empty shelves in food stores. The recent rail blockades and the litany of challenges the virus outbreak presents are having an impact in our stores. When consumers see empty Costco shelves in the media and sections like the one above in a N.S. store, they behave differently. Unpredictable consumers are a big challenge for a supply chain network that is built on history and a commitment to delivering sales with the lowest possible inventory on hand.

When I was thinking about where I can add value I will go back to my days at Loblaw during 9/11, Y2K and trucking blockades on our roads. All of these events were challenges and we had to change our mode of doing business to navigate through them. Working in the food industry changes when something like this happens. You feel a heightened sense of responsibility.

Here is my advice to manage your customer relationships and do your part to ensure we make the most of a challenging situation.

1. Understand your importance to customers and consumers

If you have an item consumers will be looking for during this outbreak then you need to be front and center so your customer knows what is happening with service level and lead times. On the flip side, if your item is not critical right now, then you might have to take a back seat in the short-term. Products like soap and hand sanitizer do not get a lot of attention unless something like this happens, where they are in high demand.

2. Challenge your supply chain

You have a responsibility to deliver service level (cases delivered divided by cases ordered). You do not always control your own destiny but you have the relationship with the retailer so do your due diligence. Challenge your packaging, ingredients and logistics suppliers to ensure you will be able to meet your obligations.

3. Be proactive in your business

Your own labour is critical to get your products produced and to the market. Provide information and tips to your employees to have the best chance of a healthy work force. Obviously you cannot do everything for them but if you can illustrate you have been proactive and helpful it is worth a lot. Remind your employees how important their role is in the food industry.

4. Communicate with your customers

This is not the time to step back and disappear. Let them know you are on top of the issue and if there will be any impacts on your business. Your communication should be developed after you go through our first 3 suggestions. If your product is on the critical list, they will be looking for your updates. If you are not on the critical list, it is still important to provide an update but do not expect a response. Let them know what you are doing and what the results will be. If there will be an impact to any item: let them know as early as possible. A lot of packaging comes from Asia and lead times are long. Be realistic, not optimistic! Communicate with purpose.

5. Respect there will be changes with your customers in the short term

Resources at retailers are limited and they will be shifting some people from one function to another to execute during this out break. Some initiatives will be put on the shelf to ensure they are able to focus on the short-term priorities. Get clarity regarding these and do not assume they will or will not proceed. Most retailers have offices in large urban centers where the virus could have a faster impact within dense populations. Resources might be limited with their employees out of work.

6. Visit stores

I took 15 minutes to walk a store this morning to see what is happening. Overall I would say the shelf conditions were good and there were only a few holes. Certainly the hand sanitizer section was wiped and I am sure they are trying to replenish, as is every other retailer. When you visit stores you will have the best indication of how your customer is doing. If you see good execution, especially relative to the competition, then let them know. If you are a critical item, update them now on your store visit, if you are not, work it into your next meeting.

7. Take a deep breath

We will see volatility and more pronounced reactions as the impact of this outbreak grows across North America. The stock market is a good indication of this. Your customers will have added stress and perhaps trying to do something other that their regular job. If there is something you can do to make their life easier; offer the help.

Let’s hope this outbreak will be controlled in the near future and the food world will return to ‘normal’. Although we never want to see something like this, it does elevate the importance of food within society. The more proactive and responsive you are will pay dividends for your business today and in the future.

Workshops:

• Keys to Successfully Hiring & Partnering with a Co–Packer

This workshop will feature an interactive discussion and exploration of the co–packer journey - from how to identify candidates that best match your objectives through to the key elements of a successful negotiation.

• Become a Co-Packer & Private Label Manufacturer

Learn about the risks and rewards of private label and contract manufacturing and apply a tool to assess your firm's capability to meet the expectations of potential co-packing customers.

After a morning of training, the workshop participants will be brought together for a networking lunch, panel of co-packing success stories, and short presentations by support organizations. Selected co-packers and support organizations will be available for one-on-one meetings, based on availability, that afternoon.

On top of the learning, tools, networking and connections, each attendee will have access to up to 4 hours of one-on-one consulting hours in follow-up! Don’t miss out on this event. If you think you’ll need a co-packer in the future, or have an opportunity to grow your business by manufacturing for another company at your facility, this is an event not to be missed.

If you have any questions please give me a call at (902) 489-2900 or send me an email at peter@skufood.com.