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COVID-19 Summit: The Question That Keeps Online Grocers Up at Night

It’s no secret that as the pandemic rages on, more and more consumers are ordering groceries online. But as with everything else right now, circumstances and protocols seem to change minute by minute. As Peter van Stolk, CEO of Canadian sustainable e-commerce grocery store SPUD.ca, put it during our virtual COVID-19 summit last week: “The ground is moving under our feet everyday.”

That sentiment seems to be especially true of grocery. We know that we’re relying on grocery — and grocery delivery — more than ever before to keep ourselves fed while social distancing. But how are grocery stores reinventing themselves to stay relevant, safe, and profitable?

That’s exactly what van Stolk discussed with Phil Lempert of Supermarket Guru at last week’s virtual summit. To keep up with this fresh demand and new safety protocols, grocery retailers — both online and brick & mortar — are having to institute new protocols and readapt their current business models.

One big change that SPUD.ca has been tackling is staffing. Van Stolk said that in the two-week period after the coronavirus pandemic hit, the company’s inbound employee applications skyrocketed from 200 to 10,000. Of the people they hired, SPUD.ca had to figure out best practices to keep the workers (not to mention shoppers) safe, including allowing employees to don personal protective equipment (PPE) if they so choose.

To that end, Lempert asked van Stolk about the question that’s keeping him (and presumably other grocery owners) up at night: How can grocery stores absorb additional costs from PPE for grocery workers, bonus payments, and paid sick leave, and still stay profitable?

For SPUD.ca, the answer was simple: start charging handling fees. In the interview, van Stolk said that SPUD.ca had originally stated that it would never charge delivery fees for their online orders. However, as with so many things during the pandemic, van Stolk said that has now changed. SPUD.ca will now charge customers a handling fee for grocery deliveries which is around $6. The company breaks down the fee to show where all the money will go: packaging, labor, sanitization, etc.  

SPUD.ca has had to make other compromises to keep their shoppers safe during the pandemic. Previously, one of the retailer’s main selling points was its emphasis on sustainability: it delivered food in returnable totes which it would later pick up, used reusable cups, etc. For now, the company has had to halt those initiatives to reduce the risk of contamination. “There’s a stop right now on that process,” van Stolk said. “People are focused on safety.”

SPUD.ca is a smaller retailer that only serves the Vancouver and surrounding regions of Canada, so it’s obviously not going through the exact same challenges as, say, giants like Walmart or Amazon which have to coordinate shipments around the globe. However, some problems are universal to the grocery industry right now, including safety, staffing, stocking, and the threat of impending price hikes for certain foods. I’m sure many retailers, large and small, will have sleepless nights as they try to figure out how to navigate this new normal for grocery.

You can watch the full video of the fireside chat below, and check out the other videos from the virtual conference here.

The Spoon COVID-19 Summit: How the Grocery World is Evolving During the COVID-19 Pandemic

COVID-19 Summit: Coronavirus Could Actually Help us Reduce Food Waste (in Some Areas)

Unpopped popcorn kernels from movie theaters. Pre-wrapped cheese plates for airline passengers. These are just a few of the unexpected food resources that, due to social distancing recommendations, are going to waste during the coronavirus pandemic.

True, reducing food waste might not be one of the top-of-mind priorities right now for many of us, including airlines and movie theaters. But as Dana Gunders, Executive Director of ReFed, pointed out during yesterday’s COVID-19 Virtual Strategy Summit, as the coronavirus shakes up the food system from top to bottom, our food waste patterns are shifting too. “There’s enormous volatility in the system right now,” she said.

As we shutter restaurants, Gunders explained that we’ve cut off the supply chain to half of the food system. With that outlet closed, farms, processors, and distributors that typically work with foodservice are eyeing the grocery market and trying to establish new sales channels. Gunders walked us through how each sector of the food ecosystem is experiencing change — and what that means for food waste.

Farms
Farms, many of which rely on restaurant partners to sell their goods, are trying to pivot to find new retail channels. “But it’s not that instant,” Gunders said. She explained that instead, millions of pounds of green beans, tomatoes, and cabbage are getting tilled under because farmers can’t find outlets for them. So until farmers are able to forge new partnerships for e-commerce and D2C delivery, farm waste will increase. 

Processors and Manufacturers
With retail shopping on the rise, Gunders said that processors and manufacturers, such as CPG brands, are seeing up to triple the typical demand. But they’re also trying to navigate social distancing regulations and employee illnesses, which negatively affects their production capacity. This is bad news for upcyclers — companies that make goods out of traditional waste products, like spent grain from breweries — who are suddenly having difficulty sourcing their raw materials. 

Photo: ReFed

Distributors
When foodservice entities are forced to shut down and cancel their orders, distributors are the ones stuck with extra product. Distributors are seeking new retail channels to find an outlet for these leftover foods — but Gunders pointed out that the food is not often packaged for retail sales (e.g. the aforementioned popcorn kernels and cheese trays). 

Grocery and Retail
If you read The Spoon on the reg, or have gone shopping for toilet paper over the last month, you know that grocery stores and retailers have been experiencing a huge boom. At the same time, grocery stores are having difficulty forecasting how much to stock, since demand is so volatile right now. And as Gunders pointed out, volatility leads to challenges in purchasing, which could actually lead to more food waste on the grocery level. 

Restaurants and Foodservice
As we know, restaurants and foodservice establishments have been one of the hardest hit by the coronavirus epidemic. Forced closures over the past few weeks led to an initial spike in donations to food banks as restaurants tried to avoid throwing away food — the donations were too much for the system to handle in some cases, said Gunders. But as restaurants stay closed, these donations are now dropping off. There are also challenges around logistics; transporting food donations the last mile can be tricky when restaurants have laid off employees and volunteerism is down.

Consumer
One of Gunders’ biggest takeaways from the summit is that COVID-19 is forcing us all to be a lot more conscious about what food we’re buying and how we’re using it. When going to the grocery store means standing in line for an hour, you’re forced to be more strategic about how to use up food you already have at home — and that means less food waste. At the same time, Gunders pointed out that hoarding behavior at the grocery store can lead to more food waste when people discover they didn’t actually need that 6-pack of brie cheese wheels.

As more people cook at home, we’re also gaining kitchen skills. These could serve us going forward; consumers will learn how to freeze, preserve, and make use of their food, instead of just throwing it away. Gunders also said that people might begin to eat food that’s past its “sell by” date, which is notorious for being confusing and overly conservative. It’s also an opportunity for the adoption of smart kitchen tech which helps use up food, like IoT-connected containers or meal planning resources.

The majority of food waste right now happens within the home. If we start being more conscious about our food, and how we consume and preserve it, the COVID-19 outbreak could actually be a significant opportunity to cut food waste. But only if we all do our part.

You can watch the full session with Dana Gunders below or check it out on Crowdcast.

The Spoon COVID-19 Summit: Dana Gunders on COVID-19's Impact on Food Waste.

COVID-19 Summit: For Struggling Restaurants, the Key Terms are “Shapeshift” and “Break Even”

“It’s really f***ed up right now,” That’s how Robert Egger, founder of DC Central Kitchen, summed up the current restaurant situation on our COVID-19 Virtual Strategy Summit. “I’m sorry dudes, but there’s no other way to put it.”

There’s no doubt that the coronavirus epidemic is wreaking havoc on the hospitality industry, decimating restaurant sales and forcing massive layoffs. So how can restaurants, bars, and catering services innovate to make it to the other side of the pandemic?

We tackled that question during today’s socially-distanced summit. In one of the first panels of the day, Mark Brand, a chef, B-corp owner, brewery manager, and professor (okay, overachiever), spoke with Egger to The Spoon’s Michael Wolf about how restaurants can innovate to stay afloat during the coronavirus pandemic. Here are a few takeaways for restaurants that came about from the conversation:

Prepare for an uphill battle
Surviving as a restaurant, even in better times, is damn hard. Brand said that — in the very best of times — restauranteurs are making a maximum of 15 percent revenue on each transaction. “Folks think we have more money than we do as restauranteurs,” he joked. Therefore the vast majority of foodservice organizations don’t have a lot of padding to fall back on when their main revenue source, like in-house dining, suddenly goes away.

To survive, you must adapt
One of the biggest challenges facing restaurants is that there’s no blueprint to go off of. “A lot of people are making this up as we go,” Egger told the summit audience. That said, Egger and Brand had a few tips to help foodservice businesses survive the crisis. “The words of the day are ‘shapeshift’ and ‘break even,'” Egger said.

In short: restaurant operations will have to pivot to stay afloat, perhaps branching into new sales channels. Some foodservice spots are also offering purchase incentives, like a 1-to-1 donation where for each meal you purchase, one is donated to someone in need or a healthcare worker fighting COVID-19.

But no matter how many initiatives or pivots restaurants make, all they can really hope to do, Egger says, is break even. Hopefully that will be enough to help them make it to the other side of the coronavirus pandemic.

Another thing to look out for? A smaller menu. “I think there’s a lot of money to be made in a modest menu,” he said. Not only in terms of selection, but also pricing and serving size.

An opportunity for change
The panel wasn’t all doom and gloom. In fact, both Brand and Egger agreed that this crisis could actually help us transform our relationship with food for the better. “There’s a tremendous opportunity to reevaluate the restaurant structure,” Brand said.

Egger agreed, noting that COVID-19 could catalyze us as a society to prioritize our food more highly. “We can make sure that our food is sourced locally, workers are paid, and we can put together a healthy meal,” he said. “We’ll have a great sense of respect for food again.” 

Here’s the full video below.

COVID-19 Summit From The Spoon: Mark Brand and Robert Egger

Join Us for the COVID-19 Virtual Strategy Summit for Food and Restaurants

During this pandemic that has radically reshaped pretty much everything in our lives in the blink of an eye, we keep coming back to one question here at The Spoon: How can we help?

And so it’s with that in mind that we decided to have a virtual summit to discuss ideas and come up with strategies for navigating the COVID-19 pandemic for the food and restaurant industry.

This virtual summit, called the COVID-19 Strategy Summit for Food & Restaurants, will take place on April 6th and feature experts who can talk to and share perspectives about the operational, business, legal and historical impact that coronavirus is having on the food business. While no one has navigated a worldwide pandemic like COVID-19, we think bringing together some of the industry’s biggest thinkers to share their perspective and some advice, we can maybe help some of those scrambling to figure out this new normal.

The event, which we’re working on with the great people from the Future Food Institute is in just two weeks, and we’ve already assembled some amazing speakers, including:

Chef Mark Brand – Founder of Save-On Meats and creator of the Token Program to feed those in food insecure situations

Sara Roversi – Founder of the Future Food Institute

Paul Freedman, history professor at Yale University and author of American Cuisine: And How It Got That Way

Ryan Palmer – Partner at Lathrop GPM and chair of firm’s Restaurant, Food, and Hospitality group

Dana Gunders – Executive Director of ReFED and recognized expert on the problem of food waste

The event is free to attend and you can register here. We’re using Crowdcast as the platform, which is highly interactive and allows audience members to ask questions share ideas with speakers and other attendees, so make sure to come with questions..

Also, if you are or know a world-class expert on some aspect of the food or restaurant business that could provide hugely valuable to business owners or employees in this new world, we’re still looking for a couple more speakers so drop us a line (no product pitches, please). If you have an idea about how you’d like to support us by getting the world or tapping into your network, we’d like to hear from you too.

Finally, as you know The Spoon team has been working every day trying to uncover stories of people innovating on the front lines of the food world during COVID-19. If you have a story or news you think we should know about, please let us know.

Stay safe and healthy and we’ll see you (virtually) on April 6th!