Driscoll’s president Soren Bjorn and The Packer’s retail editor Ashley Nickle discussed how the coronavirus COVID-19 is affecting business, supply outlook and promotional activity.
Sales for many produce items spiked the week ending March 15, according to IRI, including 31.8% for berries. The next week also saw big sales gains, including 23.5% for berries.
“In the first couple of weeks there it was crazy as everybody was out buying everything they could, then that messed up all of the supply chains, and I think that what the retailers did, then they started looking at their data and then of course they wanted to order more, and then the next thing the whole supply chain got backed up and they were having a difficult time keeping their stores full,” Bjorn said.
“Particularly fresh produce in the last couple of weeks maybe took a little bit of a hit as the center store really got depleted, and so we have several examples of customers that really slowed down the produce intake, maybe eliminated SKUs temporarily or slowed down their distribution centers, so what started as a mad rush turned into a crawl,” Bjorn said. “I think now here, by week four or five, is probably what we’re at, things are maybe beginning to settle into a pattern. I wouldn’t call it a new normal because there isn’t anything normal about this, but it’s beginning to look like maybe a little bit of a pattern, so hopefully that will make it a little bit easier as to business going forward.”
While Driscoll’s wants to keep product flowing, the company is prioritizing the safety of its people, including with numerous social distancing measures being implemented in the fields. Breaking up harvest crews into smaller groups and adding many more wash stations so people aren’t having to congregate to use them are a couple of examples.
Barring a major harvest interruption, like an outbreak in the farmworker community, berry supplies are set to increase soon as the domestic season gets started, with “very significant volumes” expected from California in May, Bjorn said.
“One of the question marks in our mind is to what extent can we promote and drive consumption like we historically would have done,” Bjorn said. “It’s very clear that the pattern of shopping in the stores is changing. People aren’t all coming in on Thursday night or Saturday morning to do their shopping, so can you generate those impulse sales that particularly the berry category is very dependent upon? We build big, beautiful displays of great-looking berries, and that’s what helps sell the product. The question is, is that still what’s going to sell the product this year, and we’re about to find out in the coming weeks.”
Retailers, after focusing the first couple weeks of the coronavirus crisis on simply maintaining operations and keep items in stock, are making plans along those lines.
“Nobody wanted to talk about promotions and displays in the last couple of weeks, but I think probably the one thing that we have started seeing changing this week is that retailers are now beginning to look ahead,” Bjorn said. “They know what has to happen for us to be successful with the crop that’s coming — and of course behind the berry peak you’ve got lots of other things, you’ve got cherries coming, then you’ve got the stone fruit and so forth, and the grapes coming later on, so there are a lot of things that will have to get promoted.
“They know that they need to figure out whether this is going to work on berries, so they are making those plans, but it’s one things to make the plans, it’s another thing to execute it,” Bjorn said. “I think that’s still a question mark, how successful it will be, Our customers today feel like they can do it and they are and they want to do it, so that’s the plan we’re going forward with.”