Direct-to-consumer models key to post-pandemic future for many British businesses
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A year ago, the way many of us approached food, shopping and eating out changed overnight. The doorbell ringing non-stop with deliveries of pantry staples and piping-hot takeout has since become a regular feature of life under Britain’s COVID-19 lockdowns. Only a year ago, though, delivery posed a logistical nightmare for many businesses.
Until last March, London-based food supplier Smith and Brock’s clients were strictly commercial: Hotels, pubs, restaurants, schools. When the hospitality sector was forced to close because of lockdown, founder Nick Fowler and his team were in a rush to offload produce before it went bad: going direct-to-consumer was the obvious option.
Fowler came up with an “essentials” box filled with basic fruit and vegetables, priced at it at around $60, and sent it via WhatsApp to a few people to assess interest. His offering went viral and business boomed.
“We were doing the same amount of revenue at the start of lockdown that we were doing to hotels and restaurants but we were doing a heck of a lot more deliveries. So, logistically, it was quite challenging getting it all out,” he said.
With 20% of their corporate clients now out of business, that division, officially called Knock-Knock Smith and Brock, is not only keeping the company alive, but thriving. The range has grown from basic fruit and vegetable boxes to gourmet options like a steak dinner for two, cheese and charcuterie, even a collaboration with one of London’s top seafood restaurants.
Now, according to Fowler, there’s no going back to the wholesale-only business model.
“It’s a kind of change for the good, really. It gives people more time to think about what they’re buying and how they’re buying,” he said. “Buy more locally, and be more interested in what suppliers we use.”
It’s a change the wider hospitality industry is undergoing. The founders of London’s Honey & Co. restaurant have just thrown open their doors after a tough three-month lockdown. The joy of co-owner Itamar Srulovich and his wife is palpable. “We have an amazing clientele base who really rallied around us and kept us going,” Srulovich said. “There’s no words to describe that feeling. People write us proper real letters and they send us flowers. Who sends flowers to a restaurant?”
In the same way grocers like Smith and Brock pivoted to a direct-to-consumer business last spring, Srulovich and his wife launched “heat-and-eat” meal kits that they delivered nationwide. Their multi-course meals included fun extras like a customized Spotify playlists, free desserts and even candles and white linen napkins for Valentine’s Day. Honey and Co. hope to hold onto this new slice of business.
“There’s so much knowledge we’ve gained,” Srulovich said. “How do you pack hundreds of meals on the same day, how do you send them all? It’s a real, valuable skill we’ve developed. It would be a shame to go to waste.”
A recent survey from IHS Market shows four-in-ten British businesses plan to hire more staff over the next year; corporate spending plans are at their highest level since the pandemic began.
As businesses try to figure out what a post-pandemic future looks like and how they should spend their money, data from consultancy McKinsey shows that consumers want to have healthier, more sustainable food options that cost less and are available online. There’s been an increase of more than 50% of growth in e-grocery in Europe.
“Last year was a record year for the grocery sector. Now that restaurants return, some of the calories consumed from grocery retail will definitely flow back to restaurants, so that will put pressure on the grocery sector,” said Daniel Läubli, who leads McKinsey’s European retail and consumer packaged goods division.
For Honey and Co., that means finding a way to continue offering meal-kit boxes while maintaining three London restaurants. And for Smith and Brock, it means investing in a new brick-and-mortar produce store in central London to hold onto the customers they’ve won over during lockdown.
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