Food and Drink update: Embracing diversification in the food and drink industry

Published: Thursday 3 December 2020

The uncertainty that came with Lockdown 2.0 and its continued impact on the food and drink industry has only reconfirmed businesses’ need to embrace diversification for the long term. Diversification in the alcohol industry was high profile early in the year when distilleries were turning to the production of hand sanitisers to supply the demand. However, the impact of the year has arguably been felt more by the smaller businesses with less access to additional resources and greater impact on their supply chains.

As the UK and other countries emerge from their state of lockdown, businesses will start to see that their customers have adapted to the new ways of operating and will have new habits and expectations. Many would have thought that the temporary strategies and initiatives that were implemented in March would be short lived, but the reality is these are here to stay, and continued new or different opportunities should be at the forefront of businesses’ minds.

Each business will have its own unique set of challenges, as they look to adapt business models to find new routes to market in a sustainable way. 

We have taken a look at some of the key strategies that have worked for food and drink businesses that we work with.  We have also spoken to Paul Williamson, Managing Director of Hillside Brewery, to understand the changes they have implemented and how they view the future. 

Hillside Brewery were no strangers to diversification prior to 2020, having turned a 40-acre farm with brewing facilities into a conference and events venue with team building sports to maximise the use of space. This year has been a challenge for all, and Paul and his team have continued to adapt their service and products to ensure they are focused on providing a great experience for their customers.

Technology

The widespread use and, to some extent, reliance on digital technologies has increased dramatically over recent months. Investing in technology allows your business to step to the next level and could prove critical to survival. Many of the Government guidelines that were introduced require a pre-order of food and drinks to avoid any queuing at the premises. Alongside the social distancing benefits, implementing technology in this way can also reduce the staff time having to man the phone and increase volumes you can process. The concept of ‘click and collect’ comes alive for fresh food and drinks businesses able to adapt to this approach.

As we head into the festive season, many artisan producers and small businesses are turning to virtual markets; the power of social media in this case allows their products to been seen by a much wider audience than would previously have been possible.

Hillside Brewery have introduced virtual tastings, a ‘pub at home’ pack with mini keg, wine, glasses, pack of cards and access to the Hillside Spotify list, and social media cooking videos, which have all proved successful and are likely to continue, with a Christmas quiz taking place on Friday 4 December. The benefit, as above, is the increase in reach, with people as far as Scotland logging in to take part.

As well as improvements in service for your customers, increased investment in technology could have further benefits for you and your employees. Business performance analytics and forecasting tools can be made simpler and easily accessible with the introduction of the right software. In a time where quick decisions have been required to adapt to immediate change, having a clear view of up-to-date finances and business performance has been crucial.

Collaboration

As traditional markets producers would have attended are closed or reduced in scale, many small businesses have joined niche online distributors allowing their products to be marketed on a wider scale. This route to market can complement the traditional store offering and can be used as an alternative when social distancing requirements reduce footfall.

Others have chosen to join together, to offer a delivery that fulfils consumers’ weekly needs, distilleries joining with breweries offering combined deliveries of products.

Connecting with community

The media has been keen to highlight the increased sense of community that the pandemic has encouraged across the country and, indeed, the world. This has been reflected in the actions of some businesses across a range of sectors.

Paul explained that Hillside brewery has experienced a marked change in engagement with their consumers having introduced a variety of new offerings for the end consumer when hospitality businesses closed, reducing part of their distribution channel.

The business makes every effort to give back to the communities it operates in and feels passionately that people are now equally keen to support local business.

To say ‘thank you’ to the customers who have supported them through the last few months, Hillside Brewery developed a ‘Beer heroes’ product, with an extra special gold label inspired by the children’s classic, Charlie and the Chocolate factory. The genuine message of thanks is received by all who have made a purchase through the challenges of 2020 and helps to set the Brewery apart when so many competing businesses are adapting and developing their offerings.

Keep it simple

Although diversifying in these ways may not generate the same turnover that businesses are used to, the continued operations will support cash flow in the short-term and may unearth a surprising new market for your business.

If you are thinking of diversifying your food and drink business, you may want to consider:

  • Is there a demand in my existing market?
  • Do I need to access any funding?
  • Can my supply chain support this change?
  • How will I make the change sustainable for the future?

For more information or for business advice for your food and drink business, please contact Rebecca Copping at rebecca.copping@hazlewoods.co.uk or 01242 680000.

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Rebecca Copping
Rebecca Copping
Associate Partner
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