While the impact of the COVID shutdown was fast and furious, it was no surprise to us to see the response of our member businesses just as quickly. Our members are as varied as our region itself, but the effects on their business models, personnel, and financial performance is a shared experience.
Along with a shortage of toilet paper and hand sanitizer, you probably also noticed the bare shelves in the rice aisle. Lundberg Family Farms was already facing an increase in demand due to the bankruptcy of a leading private label supplier and had made plans to “plant all we could plant”.
“We felt confident that our excess planting would cover that surge,” remembered VP of Administration Tim Schultz. Had Lundberg’s sales executive not put the brakes on the pipeline, the supply would have been depleted by June.
In fact, February was a great month. Then COVID-19 hit and demand surged.
How much? It tripled, sending the team into a scramble to learn how to, for the first time, restrict sales. Because rice is a crop and inherently in finite supply, had Lundberg’s sales executive not put the brakes on the pipeline, the supply would have been depleted by June. To put product on the grocery shelves and fill the immediate need, the team quickly pivoted to prioritizing shipping rice in stock and redirecting from restaurant to retail.
Coupled with the arduous task of managing inventory during an unprecedented situation – even Lundberg’s 83-year history hadn’t prepared the family for business during a pandemic – was managing an essential business with 300 employees with little insight or direction, at least early on.
“Every day there was something new from the FDA and CDC, in the thinking of how to keep everyone safe.” – Tim Schultz.
Lundberg switched up the shift schedule, production lines and sanitization protocols, all while trying to maintain morale and enforce safe behaviors. The company’s weekly updates to employees help, as do the updated testing information, waived telemed copays and ‘thank you’ pay.
Of course, challenges remain. Many employees do not have access to childcare and, with twice as many people cooking at home, executives scrapped plans to launch a new snack product and instead are focusing on how to do the most good with a limited resource. Spring 2020 plantings were higher than ever before, limited only by the land and water available.
But in the days of COVID, financial forecasting and supply chain management are more like exercises in futility. Explains Schultz, “How do you keep your expenses in line if you support anticipated need with higher volume and the need doesn’t materialize? Whatever our forecast is it will be wrong. I can guarantee it.”
So agree Grant and Tyler Deary, part of the family ownership group of Nor-Cal Beverage, manufacturer and packager of ready-to-drink teas, ades, sparkling waters, energy drinks, juices and other noncarbonated drinks as well as a service provider for fountain drink and draft systems – both considered essential businesses under shelter-in-place guidelines.
Since the business was continuing to operate, the family had to queue up along with thousands of other businesses for PPE and other sanitization supplies, then implement a thorough social distancing campaign. Adding to the ‘perfect storm’ was a shortage of CO2, a required element to produce carbonated beverages. “When everyone stopped driving, ethanol production declined, leading to a shortage of the process’ main byproduct, CO2,” explained Tyler.
Grant Deary, EVP Marketing
Nor-Cal Beverage Co., Inc.
Tyler Deary, Strategic Account Manager
Nor-Cal Beverage Co., Inc.
“Never in a million years did we think we’d have to prepare for a shortage, let alone when we were working through so many other variables. That was definitely the most unexpected challenge we faced.” – Tyler Deary
All things considered, at least Lundberg and Nor-Cal are permitted and encouraged to continue business as (close to) usual. Not so for Sacramento River Cats. With Major League Baseball in disputes as to how many games will be played and at what salaries, the season has a July start date, taking the majority of the season from the Savage Family, owners and operators of River Cats.
If baseball alone were the problem, Sutter Health Park gives the family the resources and property to host other revenue-generating events. But all large-scale events have been banned and CEO Jeff Savage has led his team through several months of brainstorming to remain top-of-mind in the community, maintain morale among his workforce (33 of 55 full-time and all 600 seasonal employees are furloughed) and simply pay the bills.
The field and facility are still at the ready, requiring only about a week’s notice to host an event in line with guidelines from Sacramento Public Health. To celebrate what should have been Opening Day, the team hosted a drive-through event. “We thought we’d go through a couple hundred hot dogs. But instead, we sold out of 1,000 and realized that demand is out there. People are excited to get out,” explained Savage.
“We sold out of 1,000 hot dogs and realized that demand is out there. People are excited to get out.” – Jeff Savage
To support the community, the team has packed groceries, hosted blood drives, sent Dinger on virtual classroom drop-ins, and regularly lends the parking lot to the local food bank. Those looking to celebrate Father’s Day outdoors were invited down to the field for a hot dog and to play catch.
If baseball resumes this summer, the goal is to play in front of small groups, renting out a fraction of the 14,000 seats to companies or private groups. If not, the immediate future may lie in private events on the field, movie nights and batting practices.
“Like everyone else, it’s just wait and see.”