How to handle a 650 per cent surge in demand

Julianne Ponan is the CEO of Creative Nature, a free-from snack brand which provides vegan-friendly baking mixes, bars, nibbles and superfoods. The business has experienced a huge surge in demand for its products since the start of the pandemic – particularly via its Amazon channel.

As coronavirus hit, and business started to surge, Julianne explained how she and the operation responded.

Please let us know a little about the company’s normal situation – turnover, staff count, sales channels, etc

“Normally we’re a small team of eight and our current turnover is projected to be near £2m this year. Our routes to market are via large supermarkets, but we also sell to independent outlets which wish to offer free-from choice to their customers. Consumers can also buy direct from us online and our Amazon shop.

What has changed for the business since the coronavirus outbreak started – both positive and negative – in relation to sales?

“We were concerned what this might mean for a brand such as ours. However, we found was that online sales increased – with the surge in demand on Amazon particularly dramatic. As soon as we realised this was going to be the way many consumers were choosing to shop at this time, we diverted marketing spend that way. We have since seen an increase to date of about 650 per cent via Amazon alone.

“Challenges around sales have been more about creating a good team dynamic when you are not together in the same space. If we’re all working from home with varying degrees of connectivity, that creates multiple problems. We’ve worked hard on that as, I believe, having a committed team leads to better productivity and higher sales. Another challenge was the fact that we had a product launch planned in John Lewis in Oxford Street London, which for obvious reasons had to be stopped. That was concerning when you have a new product to share.

“We also had all our trade and consumer shows cancelled. Having spent thousands of pounds already on these, we have not been given a refund for many. This was one of our main marketing activation plans to reach new customers with our product which meant we had to find other ways of promoting the Creative Nature range.”

What kind of increase in trade have you experienced?

“In terms of trade we have seen a surge in demand on Amazon by over 650 per cent, while Ocado has grown at 44 per cent year-on-year and our website sales increased by 280 per cent. However, there are other areas that have been hit, such as food on the go with people not commuting. We have also tapped into areas we would have never thought of before by thinking out of the box, such as supplying essential food boxes, looking at garden centres, pharmacies and generally places that have been able to be open throughout.

How have you coped with this increase in demand and what changes have you had to make (production, staff numbers, distribution, customer service, etc)?

“It’s certainly been a learning curve so far. The business has had to move manufacturing to meet demand and get new equipment and training to make sure we keep supply and distribution going. There has also been a need to take on more warehousing space because forecasting for across various lines has been difficult.

“With the majority of the team working from home, we have had to adapt and get used to virtual technology with regular video calls and even a workout Wednesday fitness session.

“Matt, my operations director, and I have had a lot of crazy early starts of 2am and late finishes – but we have made it work. During this time we are finding we are speaking more with our direct customers, which has been fantastic as interacting more has enabled me to see what our customers like, what they don’t like and get great feedback on products.”

Has the last three months made you think differently about how the business strategy might change in the future?

“It’s certainly given us all pause for thought – and I think this is a good thing. I now know that my team can work effectively from home and we can focus on tasks rather than the time any ‘bottom’ is on any ‘seat’. We do have to have people in regularly, socially distanced, to get orders ready but that can be managed and rotated around those of us who can do that. We have learned that selling online, which we’ve always done but on a smaller scale, can be very powerful and will be looking at some extra spend on digital and influencer marketing and perhaps spending less on attending certain trade shows for example.

“I think this will create greater respect for the SME sector and I welcome that. Every business has value, and those who behaved with care and compassion at this time, as well as being agile in making business decisions, will come through stronger. I think there will be positives from this.”

What are you doing now to ensure this is not a flash in the pan and that you are able to retain some of the new customers you’ve had in the last three months?

“We intend to keep in touch with customers via our social media channels and our email marketing to encourage them to stay with us. We do regular flash sales to thank them for their ongoing support and we appreciate every single client – large or small. We see them as human beings not as numbers on a spreadsheet. For us good customer service is good sales. We didn’t want the surge in demand to damage our customer satisfaction.”

How are you stress testing big decisions that are being made now to ensure you are not left over-exposed in the future?

“I have used the business model canvas in the past which I learnt from the Goldman Sachs 10,000 small business programme, which taught me a lot about managing risk and nurturing your key partners while developing the value proposition.

“Yes there has been a lot of fast decision making in terms of handling the surge in demand, getting new manufacturing up and running and new suppliers. However, each decision I have made with the team has been thought about in terms of what this will look like in six, 12 or 18 months time. Could this hinder help the business with new avenues. I think it’s important that, during times like this, you react fast – but not without calculating risk.”

What have you learnt about yourself and the business having had to deal with a significant surge in demand and sales during this period?

“The main thing I’ve learned is that I can trust my team. I always thought I could, but as a business owner you can be guilty of expecting others to be as dedicated as you – and of course that’s an impossible ask. No one can be as committed as me as the business is my whole life. This period has made me realise my team will do what’s needed and come together to get the work done.

“During this time, where we’ve shifted a lot of focus online, the younger members of our team who look after digital and influencer marketing have shone. They have grasped the opportunity and gone for it in ways I didn’t expect – and it’s borne fruit. This has allowed me to look at the business overall and do the ‘other stuff’ which can get left unattended when you are stuck in the operational side of the business.”