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Extended-form Case Study
The effect of COVID-19 on online grocery sales: Taylor Farms
Published on October 31, 2021 16 min
A selection of talks on Strategy
My name is Heather Sprandel, and I am a lecturer at the Sam M. Walton College of Business at the University of Arkansas, where I have worked for over 20 years. I teach various undergraduate business courses, and I also develop and coordinate career training programs, as well as workforce development classes and events. Today we are going to examine the external factors, pre-Covid and during the pandemic, that have affected an American-based fresh foods business, specifically Taylor Farms.
The COVID-19 pandemic greatly impacted the way Americans shopped for groceries in 2020, and the type of foods they purchased and consumed. Many Americans turned to online purchases to buy groceries, and e-commerce grew significantly, with 17 per cent of households using online as the primary means for buying groceries during the pandemic. According to an IRI October 2020 survey, the pandemic fast-forwarded shopper demand for online groceries ahead five years, resulting in challenges and opportunities for retailers, suppliers, and all organizations involved in the supply chain of consumer goods.
The surge in online grocery sales was a result of the pandemic stay-at-home orders, business closings and restrictions, as well as the shift to work-from-home for adults, and the move to remote learning for children. Late into 2020, in the fourth quarter of the year, 55 per cent of school age children and 61 per cent of teens were in school online, and taking classes remotely. In addition to a majority of students still attending school remotely as late as October 2020, 53 per cent of working adults continued to work from home or from an alternative location. With children and adults at home so much, overwhelmingly, 81 per cent of meals were being prepared at home. This increase in home meal preparations pushed meat and frozen food sales to unprecedented new heights. Fresh foods, also known as perishables (such as fruits and vegetables) also saw significant increases in sales. During the pandemic, 14 per cent of shoppers said they planned to buy more fresh foods each trip, through the fall of 2020. With so many households cooking at home, and many restaurants closed or only open for carry-out/delivery, I wondered just how much change consumer products companies, particularly fresh foods companies, had to implement due to the pandemic.