Will Coronavirus Destroy Small CPG Companies?

Three months into the coronavirus lockdown and results have been mixed for major CPG companies. Companies that have diversified product offerings and sell through a variety of channels are doing moderately well. P&G, the Ohio based conglomerate, saw consumers stock up on paper goods and cleaning products. Fear of stock-outs led to panic buying and fear of the virus meant people washed their clothes more-and P&G owns Tide and Charmin. The result was a rise in revenue of 10 percent. Companies whose products decline in value during quarantine-beauty, luxury, travel-were not as lucky. Unilever saw flat sales, but with $58 billion in annual revenue, they will be fine. But what about small CPG companies?

Earlier this week Bloomberg Businessweek published an article on the coronavirus’s impact on the specialty coffee producers.

For the time being, consumers are buying more coffee to get their fix at home, aiding producers like Nestle. In the 13 weeks ended May 17, U.S. retail sales at supermarkets and other outlets rose 15% from a year earlier, according to data from Chicago-based market researcher IRI.

But “at-home increases for coffee will never compensate for food-service loss,” according to Judy Ganes, the president of J. Ganes Consulting, which follows the industry. “Recovery won’t be quick.”