Navigating Recovery — Consumer Foods Brands
The Ankur Capital team caught up with Ashish Potdar (Business Head, Keya Foods International), Harpreet Tibb (Ex-Kellogg, HUL) and Mayank Gupta (Founder & CEO, To Be Honest Foods, an Ankur portfolio company) about consumer food businesses. With 40+ years of experience among the panelists, we covered a wide range of issues and challenges, with diverse perspectives from an industry veteran, a matured consumer food business and a growing startup in the space.
The session kicked off with a discussion around some of the key challenges currently being faced by consumer food brands due to COVID19. Mayank was able to offer insights into the three key challenges faced by TBH and the steps they are taking to overcome them — managing human resources, tackling supply chain issues and dealing with the cash crunch! Tackling HR issues required constantly providing reassurance to workers and alleviating their paranoia by increasing communication, providing monetary incentives and arranging transport. Importantly, Mayank viewed this as an opportunity to build the organisation. To manage supply chains better, distribution was the main challenge. A strong focus on leaning out the supply chain, working with multiple partners to ensure end-to-end distribution and building their own channels were some of the steps TBH took. Cash issues were dealt with by negotiating discounts with distributors and cutting costs in a manner that the core business would not be impacted.
Ashish, on the other hand, added a different flavour to the discussion by speaking of challenges faced by a company in the space which has achieved scale. He identified maintaining a balance between care and agility as the main challenge and emphasized on the importance of having a clear vision to navigate through difficult times. Reaching out to employees to inform them of the current situation and its implications and planning with military precision helped people focus and kept the organization going. While it may have been a difficult month, the motto at Keya was that it will be a normal month. Difficult times also shifted focus on future innovation!
When asked about the role technology played in the organization, Ashish spoke of the important role played by remote conferencing tools and ensuring that all employees adopted and eventually adapted to these tools. Another important step was shifting to a sales automation platform and creating clusters of retailers who had the means to pick up stock from distributors.
While Ashish and Mayank spoke of challenges at an organization level, Harpreet offered general advice that would benefit each organization operating in this space. Each one must understand that while businesses come to a halt and business metrics are affected, people are coming under attack and are scared and anxious about the future. While we are keen to get back to business, we must focus on the safety of our employees. This is the time when the culture and values imbibed by an organization come to the forefront. It is time for organizations to walk the talk and live up to values mentioned on the posters on their office walls. While business metrics are important, companies should adopt a people-first approach and ensure that the well-being of their employees and customers is the key. To quote Harpreet on this aspect,
Business metrics are only the what — the critical aspect is to focus on how — and the ‘How’ is how you treat your people. There is no greater moment than now to over-communicate — so all organizations must communicate, communicate, and communicate!
After speaking of key challenges and steps that can be taken by organizations, the discussion moved to how brands should communicate with their customers. While Mayank spoke of TBH’s push towards conscious marketing and ensuring that the brand sends out a positive message, Harpreet offered candid advice that organizations must reassure customers and inform them of steps and measures taken by an organization on the health and hygiene front to ensure the safety of their workers as well as customers. An emerging trend is ‘contactless deliveries’ and brands can build their market strategies around initiatives such as these, especially to respond to the anxiety gripping consumers.
On responding to the question of recovery, Harpreet offered his take on whether we will see a ‘V-shaped’ recovery or ‘U-shaped recovery’, V-shaped meaning all goes back to normal once the pandemic ends and U-shaped meaning that brands will take a long time to recover by taking small proactive steps and measures. It is already clear that we will see a change in consumer behaviour.As in-home dining will go up, it is up to brands to capitalize on this trend. Consumer spending will be conscious owing to salary cuts. We will see a shift towards spending on essentials and less discretionary spending. Lastly, we will see people go back to trusted brands — thereby highlighting the importance of building trust, even more so for emerging food brands. In the near future, we might see several brands showcasing their backend processes to build trust with consumers.
“Reassure people and become a trusted brand” is the motto to live by!
Another emerging trend is the increased demand for healthy brands which are focused on wellness — for instance, the folks at To Be Honest are offering healthy alternatives in the snacking space. We will also see a greater shift towards digital channels which is why you’ll see brands like TBH tying up with players such as BigBasket and hyperlocal players like Scootsy etc. Ashish mentioned how Keya foods is very excited by this opportunity and that it will also benefit a lot of small and medium-sized brands as a shift towards digital channels will unlock new doors.
The panel offered useful advice on recovery as well, speaking of how everybody will survive this together and as brands suffer stress so do their vendors and partners. Now is the time to reflect on relationships and spare a thought on the impact on reputation among stakeholders of business measures such as squeezing out greater margins. The discussion also had some interesting pointers on likely shifts in consumer behaviour in a post COVID-19 world. Emerging food brands will need to take note to adapt to these shifts and remain flexible in their approach!
In case you were not able to attend the session, you can watch the full length video here.