28 Apr Social Isolation Measures Provide Producers with a New Opportunity for Direct-to-Consumer Sales
While the COVID-19 pandemic has caused chaos in supermarkets around the world, changing consumer behaviour has had a positive impact for some segments of the market.
Producers who sell direct to the consumer have seen a significant lift in sales as customers look to avoid supermarkets amid social distancing concerns.
For many producer-led food brands, the affects of Corona Virus on the food service industry has forced a change their market focus from hospitality to consumers in order to mitigate losses, a strategy that has worked in favour for some.
“We’ve seen an 85 to 100 per cent increase in order this month alone,” said Debbie Richardson from Running Creek Beef.
Mrs Richardson’s business, which is located on the Queensland / New South Wales border, previously relied on food service trade and on-farm tourism, which were both obliterated after COVID-19 restrictions were imposed.
But a spike in direct-to-consumer sales has helped the enterprise to stay afloat amid the pandemic, establishing a new network of valuable clients.
“Our beef is our lifeline at the moment,” she said, “had we not had those additional orders, we would not have covered our costs and about 200 kilos of beef would have had to be put in the freezer.”
While the spike in sales may be partially attributed to panic buying, Mrs Richardson also sees the benefit of increasing her customer base.
“I do feel there is some additional quantity buying going on, people have bought a bit more and we’ve had a lot of new customers too.”
Bulk Sales to Consumer a Winner for Premium Pasta Brand
For South Australian brand Pangkarra Foods, the freeze on the food service sector has also forced a shift in their marketing strategy.
Earlier this year, the company developed a new range of pasta in 5 kilogram cartons with the aim of improving sales in the food service sector. Their first batch of wholesale products hit their warehouse shelves just weeks before the effects of social isolation measures hit the Australian public.
“With our current restaurant customers being forced to close due to the restrictions of COVID-19, we were left with a significant supply of bulk pasta,” said Pangkarra Foods Managing Director Sam Maitland.
“We needed to look at alternative ways to adapt to this situation and decided to offer our wholegrain bulk pasta to our online consumers at a discounted rate for their benefit.”
Prior to the COVID-19 outbreak, web sales represented about 3% of Pangkarra’s total revenue. Marketing the bulk-to-consumer offer through social media has grown website sales around ten fold and approximately half of those sales were from new customers.
“We’ve now sold half of the stock from the warehouse and, importantly, this has helped to secure cash flow through March and April.”
Mr Maitland sees future potential to drive sales through a better connection with their consumers, post Corona Virus.
“I think that consumers have embraced buying food online, direct from the producer and hopefully this continues. There’s a potential opportunity here for Pangkarra to sell more products through other like-minded paddock-to-plate brands that have also shifted their focus from food service to direct-to-consumer channels.”
The company is also considering adding other brands to their online store, with the aim of increasing the spend per customer.
“We’re planning on offering products like olive oil, stock, salt, coffee and passata, foods that align with our brand and products, adding value to the online shopping experience for our customers.”