NFU - Advice and tips

May 2020

ADVICE AND TIPS TO HELP YOUR FOOD & DRINK BUSINESS SURVIVE AND SUCCEED DURING CORONAVIRUS During this unique time, food & drink manufacturers have had to quickly adapt their business operations to ensure that Government restrictions are enforced, and staff, suppliers and consumers are protected.

Darren Seward Sector Lead for Hospitality, Food & Drink

The pressures and concerns faced during this difficult time will be different for each business, but now that we’re past the first few weeks of the lockdown period, it could be a good time to reflect on the changes you’ve quickly had to impose.

To support you in navigating your business through this ever-changing landscape and to aid in its survival during and post Coronavirus, we’ve outlined some key things to consider and also provided some tips that could help with your business operations.

HOW YOUR CUSTOMERS COULD HELP • Review all payment options that are available to help support you with your cash flow. You’ll need to be sensitive in this area as customers are likely to also be feeling the pinch • Communicate and be transparent - let customers know what your challenges are, such as the impact on your range and your productivity and keep them informed of your contingency plans.

REVIEW YOUR DISTRIBUTION CHANNELS • If you’re not already selling online, then this could be a great time to trial online orders for deliveries direct to consumers. If successful, this could end up becoming part of your business-as-usual operation • Consider if you can offer a click and collect service, so you are reducing contact with the general public but still delivering your product.

May 2020

MANAGE YOUR SUPPLIERS • Ask to see their contingency plans, so you can have peace of mind that your operations and commitments to deliver will not be affected • Consider and understand how your suppliers are being impacted • Review supplier stock holding • Explore the possibility of different payment terms.

KEEP UP WITH YOUR MARKETING INVESTMENT • Continue to invest in marketing – it’s important during times like this that your customers and consumers know you are still open for business and are supporting the nation • Be sensitive with your tone of voice when marketing. Anything perceived as ‘cashing in’ won’t come across well, but providing a solution to problems that people may be experiencing will be welcomed.

COMPETITORS AND OTHER MANUFACTURERS • Work together to establish distribution routes and utilise the network fully • Talk to each other and share learnings, especially when in the same category, as these will be most relevant • If you normally trade at farmers markets or a place of high footfall, you won’t be the only one impacted. Build up relationships with other key suppliers and producers and consider creating a ‘virtual farmers market’ – work out logistics so you have one delivery • If you have spare capacity, speak to other manufacturers who may need it. How can you adapt your capabilities to fulfil their needs?

• If you undertake direct to store or consumer deliveries, can you support the local communities with care package deliveries, or to hospitals for instance? Remember it’s the meaningful difference that will drive the speed and strength of the recovery.

REVIEW YOUR PRODUCT RANGE Putting more volume through fewer lines will create efficiencies, reduce downtime and potentially give you economies of scale on ingredients.

You can identify the potential temporary range or things to delist by considering: • Ingredient availability • Production efficiencies (what you can produce most effectively, particularly lines that take less manning) • Waste creation – examine lines you can normally live with but drive high waste, either in production or sales • Profit margin per stock keeping unit (SKU) as well as a total range.

INCREASE CAPACITY • Depending on the size and number of factories available, can you switch capabilities into a site which would normally produce a product range that is not so sought after?

• Temporarily switch shift patterns to maximise outputs • Reduce deep clean time (with guidance from your Operational, Technical or Health and Safety representatives) • Review frequency of deliveries with hauliers, couriers and retailers • Speak to other manufacturers – can they adapt their capabilities to produce your products in their factories?

• Understand if there is any unused equipment at other sites or facilities that could be used.

May 2020

ADAPT • Take the lead from your customers – what are they asking for and what can you see that they need from social media, conversations with them or by observing shopper habits?

• Consider smaller case sizes to reduce waste, or larger case sizes to increase availability • Find a more cost effective or alternative ingredient if you are having trouble sourcing your normal raw materials.

REDUCE FOOD WASTE • If you are a producer using perishable raw materials, speak to the local growers and suppliers to see if you can utilise their stock, to either make your current range, or something different • Review options to freeze stock or ingredients to reduce waste. Is off-site storage an option for you for a short period of time until you can get back to ‘normal’?

KEEP THE CASH IN THE BANK Reduce costs where possible: • Review your ordering quantities accordingly.

It may be better to pay a little more per unit for a raw material but buy less of it, which could support an immediate cash flow situation • Consider more cost effective or alternative ingredients. Now could be the time to review a new recipe using a different quality or grade and assess if it makes a difference to the overall quality of the product • Review payment terms with customers and suppliers • Pricing adaptations may be required but avoid discounting if possible as this can have a longer-term negative impact on brand perception and values. Upselling could be more beneficial.

QUESTION EVERYTHING • If it’s causing you problems in production, ask yourself, why are you doing it? Challenge the status quo.

Whatever changes you are making to products, distribution, or technical protocol, it’s important to ensure you are still adhering to the ‘safe and legal’ guidelines and rules with respect to labelling, testing, cleaning, and record keeping, as well as the latest Government guidance on social distancing.

Making a short term amend now and not following the correct procedures could end up in it being a bigger, longer term problem.

DON’T FORGET, COMMUNICATION IS KEY #GetBritainTalking – this hashtag has been set up to keep the nation talking, especially to support the most vulnerable, but it applies to business as well, and demonstrates the importance of keeping up communication with customers, suppliers, consumers and competitors.

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