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Shutdowns during this pandemic spread across all industries. We reached out to an unusual source—a food wholesaler—to see what we could learn and understand about a different industry's particular distribution and supply chain interruptions, and how we can apply it to our own industry. Today, we bring you part one of this fascinating interview with Penny Cole of Lotus Foods.
Nolan Johnson: Penny, can you start by introducing yourself, what you do, who you work for, and what industry you’re in?
Penny Cole: I work for Lotus Foods. We’re a value-added rice company. I’m the Western Regional Sales Manager for the company, so I cover all of our business in west Texas. This includes natural and conventional grocery stores, food service, and e-commerce.
Johnson: You engage in a business-to-business, rapid delivery, short turn-time model.
Cole: Correct. We also sell directly to the consumer. It’s a small piece of our business.
Johnson: Walk me through your typical work week before the outbreak.
Cole: We work with brokers who represent us in the field; most food companies do this, so our brokers are our feet on the street. These are the people who go into the stores and talk with buyers and make sure the items are on the shelf that are supposed to be there. If they’re not, they talk to buyers to get them placed. They also make meetings with buyers. When they’re meeting with buyers for chains, we go along with them to make those presentations. A big part of my day-to-day responsibilities is managing my brokers, giving them direction on what I want their priorities to be, and looking at and analyzing our sales numbers.
Johnson: There was quite a bit of a trade show activity for you as well.
Cole: Correct. We attended a lot of them. Our distributors had trade shows, and some of our larger retail partners did their own, but that quickly changed.
Johnson: How many trade shows a year did you attend or were affiliated with?
Cole: Of all the different levels, at least 10. The last one I attended was the CHFA Show at the end of February in Vancouver, which was right before things started getting weird. The second week of March was supposed to be Expo West, which is the largest trade show in our industry. Approximately 95,000 people usually attend. The Friday before Expo West, we started hearing that retailers were canceling. Our company got together and asked, “Should we still go or not?” By Sunday, my company had decided we were not going to attend. At 1 p.m. on Monday, the trade show was still going as planned, but by 4 p.m., they had postponed it. All the big retailers had dropped out, as well as many manufacturers. Eventually, they canceled the show completely.
Johnson: That one key event in the beginning certainly sent a message that everything’s different. What else has changed? What’s it like doing your job now?
Cole: I had some new brokers in the field, and in February, I had plans to visit their territories and work directly with them. I traveled to Northern California with a few of them before I went to Canada. Then, I had planned trips and trade shows for the whole month of April and beyond. I was scheduled back in Northern California, Southern California, Texas, and Colorado. Of course, all of that came to a screeching halt.
On the West Coast, we were some of the first with stay-at-home orders. People couldn’t go into stores because they were all supposed to be closed unless essential. Grocery stores, of course, were open, but all of the brokers—because they want their people to be safe—didn’t go into the stores. Consequently, they couldn’t do those jobs. The brokers had to start changing up how they were doing things, which also changed up the way we were doing things.
Johnson: Walk me through that experience. Suddenly, we’re talking about supply chain and delivery, which is a huge topic.
Cole: As I said, our brokers are our salespeople on the street, so they had to stop doing everything they were doing at the store level. On the other side, all our products go through distribution. We sell to distributors who then sell to the retailers. Suddenly, when “pantry loading” started, the distributors couldn’t keep up. They were sending us huge purchase orders. They couldn’t deliver everything that the retailers wanted.
Whole Foods is a big customer for us. Their distributor was holding each store to a set amount of cases per order, which is nowhere near what they wanted. But that was so they could allocate and give products to everybody. That trickled down to us too. If one distributor order came in first, we couldn’t give them everything and give the next distributor nothing. We looked at what percentage of business these distributors did and allocated the product we were giving them.
The sales numbers we saw from the end of February were the last true sales cycle in the “old normal.” The numbers for the end of March were double, if not triple. April was back down near normal, yet still elevated. The pantry loading we saw happen in March is still happening; people are buying a lot because they feel like they don’t know if they’re going to be able to still get food or not. As more areas start opening up, we’ll probably see more people starting to eat out again, but even restaurants have to change the way they’re doing things. We still have no idea what the “new normal” is going to look like.
Johnson: How has your job as a salesperson changed?
Cole: In our industry, there are a lot of category reviews. Various product categories are reviewed in different months with different retailers. In March, all that stopped, because all the buyers were concentrating on how to keep things afloat. Grocery has always been driven by the category review with large chains. If a review is canceled, we won’t have a chance to present to that retailer for another year. The category reviews that were canceled in March, April, and May mean that we now have lost the chance to expand our presence in those retailers for another year—unless they decide to review those categories again.
On the natural food side, where the chains are typically much smaller, they’re not so by the book on category reviews. We can still present it to them. But in those cases, unless it’s some new item that you have out, they already carry our bestsellers. But it’s the larger chains, with the largest potential sales upside, where we have to work within their timelines. If they cancel completely, there’s absolutely nothing we can do for another year.
We had a major competitor that went out of stock on a big commodity product. We went to this larger chain and said, “We still have products. Is there a chance that we can get it in your stores?” We sent them samples within a week—a process that could have taken months. They said, “Yes, as soon as you can get it out to the distributor to get in the stores, we’ll start placing it.” There are upsides. If we hadn’t said anything, this never would have happened. In these times, even though some chains are going by the book, some are looking outside the standard process.
Johnson: Let’s pivot and put on a quick sales seminar. How do you succeed in this environment? As a salesperson, what do you do when you can’t go see the store staff or meet face-to-face with your brokers?