**4 Operational Tactics for Maintaining and Growing Consumer Confidence Amid Coronavirus**
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May 18, 2020

Covid Consumer Impact

The Covid-19 pandemic has been a reminder of the critical role played by companies in the food and beverage supply chain. But even as they rise to the unprecedented challenge of keeping their people safe and products moving,company leaders have had to navigate a rapidly shifting marketplace.

When states began issuing stay-at-home orders in early to mid-March, consumers turned to hoarding behaviors, exemplified by shelves emptied of toilet paper and hand sanitizer. Eggs, pasta, milk and frozen foods were next to fly off the shelves. Demand collapsed, meanwhile, from restaurants,hotels, colleges, sports stadiums, amusement parks and other institutional venues.

But as consumers adjusted to life at home, clearer patterns began to emerge.While it is too early to say which behaviors will last and which will fade as life slowly returns to normal, they are worth noting.

Home cooking: No longer able to eat out, many consumers learned it was not so hard to prepare a home-cooked meal. And they discovered that it cost less. These are lessons that will not be lost in the short term, especially for Millennials and Gen Z. Indeed, Americans of all ages will likely remain thrifty until the economy heals and employment returns to pre-pandemic levels.

Baking: Consumers picked up a range of hobbies while they were stuck at home. Baking proved one of the more popular. That led to runs on flour, sugar and other ingredients. In March, for example, our client The Hershey Co. saw a 30 percent jump in sales of Hershey’s Syrup, Cocoa and Baking Chips.

Comfort: Before the pandemic struck, health and wellness drew all the buzz in the food and beverage industry. Consumers have not lost their interest in products that make them feel better. They have been especially interested in items that deliver a boost to the immune system. But consumers also have been looking for an emotional boost, leading them to cheese, salty snacks and even familiar vegetables.

Variety: Confronted by depleted supermarket shelves during the pandemic, consumers were forced to venture beyond the staples that typically filled their shopping carts. Maybe they tried new pasta shapes or new flavors of soup. Or they found alternatives to their go-to brands and grocery stores. Consumers likely will return to their old habits but many will carry with them a willingness to experiment and try new things.

Online: Over the last few years, ecommerce has been the fastest-growing segment for food and beverage sales. That grow accelerated during the pandemic as consumers looked for a safer and more reliable shopping experience. Many logged into online ordering for the first time. And it wasn’t just for their weekly grocery run. Consumers turned en masse to convenience-store delivery services like GoPuff, while food andbeverage companies like our client Mondelez have been seeing spikes in theirown ecommerce sales.

The rapid changes in consumer behavior – and the unpredictable longer-term impact of Covid-19 – have forced food and beverage companies to think fast, often with limited information. They need partners who are equally flexible and can offer innovative ways to adapt manufacturing processes. It is a challenge that K2 Kinetics is ready to help you meet!

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