Jul 06, 2020 by Mark Dingley
The coronavirus pandemic has had staggering impact on Australian manufacturers. But while some businesses are struggling to keep the status quo, others have quickly pivoted to meet the new market.
In fact, “pivoting” has become the number one survival mechanism for small and medium manufacturers.
Here are five pivot models used by manufacturers and other businesses during the COVID-19 pandemic:
We can’t talk about pivot models without shining the spotlight on distilleries.
As demand for hand sanitiser overwhelmed supply, some forward-thinking Australian distilleries changed their production.
Queensland-based Beenleigh Rum Distillery and Bundaberg Rum Distillery both switched to produce ethanol for hand sanitiser using existing production lines and staff.
Beenleigh Rum had arrangements in place to supply the Queensland government to ensure a supply for schools and frontline workers, while Bundaberg Rum agreed to donate 100,000 litres to the Queensland government.
“At a time like this we will always step up and contribute when Australians need it most,” Bundaberg Rum’s parent company Diageo Australia managing director David Smith said.
Urban Sydney distillers Archie Rose also started producing hand sanitiser, but added the botanicals of grapefruit, cassia, cardamom and thyme from its gin production. This boosted community supply while also helping the business keep more staff during this crisis.
It’s not just distilleries; Ford Australia is producing face shields for frontline healthcare workers at its Broadmeadows facility in Victoria, while a consortium of Australian manufacturing and engineering businesses – including Bosch Australia and New Zealand, ANCA and Braemac – have been collectively making ventilators.
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Enforced isolation put pressure on many brands across food and beverage. As a result, they have moved to a direct-to-consumer (DTC) model.
Far from being a negative shift, the DTC model has presented new opportunities. A pre-COVID-19 study by Direct Brands 2020 for IAB Australia found direct brands are using new channels to reach customers, develop new delivery methods, and communicate strong brand purpose by messaging across their own channels.
It also offers access to first-party data, which leads to more insights which can be used to improve products and innovate.
One industry that has made a noticeable shift online is craft beer.
Due to the lockdown of the hospitality sector, the Docklands brewery and brewpub Urban Alley has been selling beer online for the first time, with sales nationwide.
In New Zealand, Epic Beer had an online store that served little purpose, except to sell merchandise, until lockdown hit. In fact, it only accounted for 2% of revenue before lockdown.
Now, owner Luke Nicholas told Brews News that sales exploded with half the online orders from new customers who were unaware they could buy beer online until lockdown.
Even global brands, like PepsiCo have had to make the shift online.
With Americans in isolation going online to purchase groceries, sales of PepsiCo's soda, oatmeal, juice, chips and other offerings soared. Seeing an opportunity, the 122-year old company made the move official. In May, PepsiCo unveiled its first major move into direct-to-consumer sales with a pair of websites: PantryShop.com and Snacks.com
In the UK, Heinz introduced Heinz to Home, using Shopify Plus and consultants Good Growth. The service offered a selection of its popular products – Heinz Beanz, Tomato Soup, and Spaghetti Hoops – packaged as a bundle and delivered in two to three days across the nation.
In the Victorian High Country, brewers have teamed up to produce a special release collaboration, “Can-demic Case”. Available for purchase online, the 24 pack includes beer and cider selections from Bright Brewery, Bridge Road Brewers, Black Dog Brewery, Blizzard Brewing Co and Alpine Cider.
As Bright Brewery marketing manager Laura Gray said: “(This) allows us to send 24 little pieces of the High Country out into people’s homes, which will hopefully help to tide them over until we can welcome them back up here with open arms.
Likewise, Mornington Peninsula breweries have joined together to release the ‘Beach Box’ and a collaboration of breweries from Western Australia’s South West united to create a mixed pack named South West Brews.
Businesses are also collaborating on better methods of production. For example, Outland Denim has opened of new production facilities in Cambodia, called Maeka, where other fashion brands can have their garments made in the same sustainable practices of Outland. New Zealand brand Karen Walker has taken up to the opportunity and now has its denim line made entirely in the Maeka facilities.
Collaboration and adaptability are essential for all companies to survive now and as we move into a post-COVID-19 world.
Whichever way you pivot, the most important rule is to put the customer at the centre. Take time to understand what your customers need and work out the best way to provide it to them in challenging times.
Now is also the time learn about new technologies and solutions to help you adapt more quickly, whether that’s e-commerce or automation tools.