Farm Business - from the Fall 2019 Farming Smarter Magazine
Websites and social media are the new grocery stores
Online sales; home delivery; drive-through farmers' markets; chef-curated ingredient boxes; pop-up mini-stores; restaurant prepared meal-kits; CSA boxes that include recipes, sauces, even wine or craft beer: consumers are turning to all sorts of new ways to shop and eat these days. The (multi) million-dollar question, of course, is how much of consumers' new buying behaviour is likely to stick?
"Nobody knows," says Jo-Ann McArthur, president and CEO of Nourish Food Marketing. "I can say it is absolutely the hardest time in history [to make predictions on food-use trends] because if you look at any research that was done pre-pandemic, it's not going to be predictive going forward."
Several factors are aligning to spur on unprecedented change.
Pre-COVID-19, CSA boxes, farmers' markets and farm gate sales were already gaining popularity, pushed by growing consumer interest in all things local and burgeoning 'foodie' culture.
Once the pandemic forced everyone home, those trends accelerated exponentially. Uncertainty encouraged people to buy local, both because consumers became suddenly aware of supporting their neighbours and because buying direct from producers felt safe. Too, cooking took off: in fact, says McArthur, consumer trends show cooking from scratch has been the number one activity increase during the pandemic in Canada.
Producers are also pushing the change.
"When the whole food service side collapsed, all those farmers who were supplying restaurants lost their markets, so they had to pivot quickly and find any place to sell those items," says McArthur.
Forced into change by necessity, farmers came up with all kinds of creative selling opportunities. Many turned to online sales, building websites of their own for direct-to-consumer sales or working through larger existing channels like Spud.ca, TruLocal.ca, MochaLocal.ca and many more to move product.
Now that the pandemic's initial crisis stage has passed, farmers, retailers, and food industry crystal-ball readers like McArthur are catching their breath and looking to the future. While McArthur cautions that much remains unknown, she says there are certain clear indicators for what's ahead.
First, she points out, traffic patterns have changed now that so many are ≥ and are likely to continue - working from home.
Second, now that people cook and eat more at home ≥ and in many cases enjoy doing so ≥ McArthur questions whether they would choose to go back to eating as they did pre-pandemic, even if they could.
"They say it takes three weeks to form a new habit. We're at over six months now," she points out.
And, she thinks the move towards local ≥ preferably next-door but at least Canadian ≥ will stick.
"It was already trending up and this acted like an accelerant: like putting gas on a fire," she says.
While consumers may long for farm-gate interaction, that won't be possible for the majority, especially urban-dwellers. Therefore, McArthur expects a lot of relationships between producers and consumers to move permanently online.
Marc Lafleur is already making the most of exactly that shift.
Four years ago, the ex-door-to-door meat salesman unveiled a very new kind of meat-shopping experience to Canadian consumers. Founder and CEO of TruLocal, his company was among the very first to offer from-your-couch ordering convenience and home delivery of local, value-added meat products (think pasture-raised chicken, grass-fed beef, etc.).
"The whole TruLocal model is that when someone goes online in Ontario, they're going to see producers, processors and butchers only in Ontario. When they go online in Alberta, they'll see only Albertan-produced product. They can build a box of exactly what they want, and it'll get shipped the next day," says Lafleur.
"We understood what people cared about: the transparency and trust they needed to build. There was no one in the market doing that online four years ago."
Two years into the business, TruLocal expanded into software with TruLocal Connect, allowing producers and farmers to sell their own branded products through their own online shops.
"Think Shopify, but only for farmers and producers," says Lafleur. "That's where I see so much opportunity."
In addition to benefiting from TruLocal's brand and existing reach, farmers using TruLocal Connect get the benefit of simplified logistics via an easy-to-use software platform and, when necessary, TruLocal Connect's warehouse and delivery service too.
While COVID proved difficult for many bricks-and-mortar retailers, it has been a huge boon for online retailers like TruLocal. That said, Lafleur believes COVID isn't forcing people to change; it's only speeding up adoption that would have ultimately happened anyway.
"There is a lot of fear [among online retailers] that this is a spike; that it's not going to stay. I think that's totally unrealistic," says Lafleur. "If you look at e-commerce adoption, the Bank of America shows a 16% adoption pre-COVID. In the course of six weeks [in March and April], we jumped to 27%. We weren't supposed to hit that kind of e-commerce penetration 'til 2030. All those people who wouldn't have touched online for five, six, seven years were forced to do it. And when they did it, low and behold, it worked: they went online, ordered their box, entered their credit card, got a delivery the next day. Even if we lose half of the new adopters ≥ say we're at 20% adoption ≥ that's still millions and millions more people now trusting online."
Lafleur believes e-commerce is the new form of retail, and more producers need to use online opportunities to sell direct to consumer.
"If you look at any business, direct to consumer is a must-have. It's good to have a third-party channel too, but when you only rely on the third party, they have all the power and all the control over the customer experience," he says. "If you're not building a one-to-one relationship with your consumer, someone else is going to."
Whether online or via other alternatives, McArthur believes COVID-19 is translating to new and better options for Canadian farmers.
"There is real potential. Canadians want Canadian farmers to do well, and they trust Canadian farmers. Farmers' markets haven't been easy to shop at [through the pandemic] and people are lined up around the block to get in because there is that desire to connect with our food. This seems to be the time to really start leveraging those direct-to-consumer relationships."