According to Bloomberg, there are rumours that a recession is coming. So you may be worried about what an economic downturn could mean for food and beverage companies. Mercer Capital found that during a recession, consumers tend to buy in bulk and they become much more conscious of the products in their pantry, using every last item before going to the store to restock.Even though a recession might mean fewer purchases from your customers, the economic climate won’t last forever. Use the following strategies to recession proof your food and beverage business.
3 Recession Proof Business Ideas To Weather the Storm
1. Don’t Cut Your Marketing Budget
Marketing is often the first thing businesses think to cut when times get tough. You may even think you can survive on the customer base you already have. But, really, marketing should be the last thing that is cut.
Slashing marketing can be extremely dangerous. You need to save money without reducing the number of new customers you are attracting. If you're not marketing to new customers, your sales are almost certainly going to decline.
Inbound marketing keeps your food and beverage company top of mind with your customers by speaking directly to them. Content is tailored to your ideal consumers, helping them to solve problems and informing their decisions.
For example, your long-time consumer who is being hit hard by the recession may want to know where they can find their favourite food and beverage brand at a discounted price. You could offer them alternative suppliers to shop with, or simply ways to save in other areas so that they can afford your particular product. In speaking to a specific persona, you continue your relationship with them, building trust, and keep your brand front and centre.
Hiring an award-winning inbound marketing agency like Tangible Words is another option to ensure your marketing budget is being efficiently utilized. Not only will your food and beverage company benefit from our marketing experience, but it’s also one less task for you to undertake during stressful economic times.
2. Innovate To Stay Ahead of The Competition
Innovation is a great way to diversify your food and beverage product offerings during a recession. There are two approaches you could take to diversification:
- Consider creating products that appeal to a lower cost market. Perhaps even look into creating partnerships with discount retailers, where you know your current customers are shopping more often due to the economic downturn.
- Consider producing products for markets that aren’t as affected by the economy, such as healthcare, waste disposal, education, government operations, etc. These business relationships could also prove to be beneficial to the long-term health of your company, well after the recession.
While your competition is playing it safe during the recession, you can pull ahead by using your creative workforce to diversify your product offerings. This also ensures that you are responding to what customers are really looking for, which improves trust in your brand and builds lifetime customers.
3. Cut Expenses
Make sure what you cut makes sense. The following lists a few places where food and beverage companies can start cutting expenses.
- Look for the little luxuries: Most businesses spend money that doesn't help generate revenue. Look for these costs to eliminate first, whether it's fancy hotels on business trips or lunches on the company credit card. Getting rid of these little luxuries can add up to big savings.
When cash is tight, most employees will understand the need to make these sacrifices. They'll certainly understand it more than a reduction in their salaries or bonuses.
- Renegotiate deals: Examine the long-term contracts you have with suppliers, contractors, and landlords to see if there's room to lower your expenses. Market conditions may have shifted to the point where they have no choice but to renegotiate a lower rate for you.
- Manage inventory: Storing the inventory you already have can make up a major portion of your cost structure. Keeping inventory levels low helps you cut costs and reduces the chances of unsold inventory.
Check if suppliers can be flexible and deliver at a higher frequency. If your supplier agrees to deliver once a week rather than once every two weeks, you can keep a lower level of inventory on hand, reducing storage and maintenance costs.
Tangible Words Recession Proof Business Ideas
During a recession, it’s more important than ever to ensure marketing dollars are spent with efficiency. An inbound marketing agency, like Tangible Words, can help you achieve shorter sales cycles through better quality leads. Tangible Words is a team of trained professionals who deliver measurable results for your food and beverage company. By using an inbound marketing firm, you’ll see long-term success and the continued growth of your business, even through a recession.
Want To Know More About How To Put Inbound Marketing To Use in Your Business?