COVID-19: Did companies survive the pandemic pivot?
Nick Ngo still remembers Spring 2020 vividly. It’s a sudden wave of new shops making acrylic walls identical to his business.
Ngo, project manager at Sixstream Signs Ltd. in Surrey, British Columbia, said: That was what they were doing though. ”
What Ngo saw was part of a larger trend. A string of companies were suddenly jumping into the COVID-19 economy, switching production from other areas to make everything from protective barriers and hand sanitizers to cleaning his wipes and personal protective equipment.
Fast forward three years and many of the companies that emerged to manufacture and source PPE in the early days of the pandemic have gone bankrupt. However, other companies such as Sixstream, which had existing product lines before pivoting to pandemic-related products related to social distancing and hygiene, have since declined as supply lines and demand factors have recovered and stabilized. I managed to restore it.
Scott Thompson, founder and distiller of Mud Laboratory Distilling in Vancouver, has switched from his normal production of whiskey and other spirits to making alcohol-based hand sanitizer and wipes during the pandemic. rice field.
Mad Lab has now returned to full-time production of alcoholic beverages, and Thompson said the key to navigating the COVID-19 market is to identify the nature of the volatility and plan for the long term accordingly. I was.
“We decided not to make selling sanitizers part of our business,” Thompson said. “It turned out that we were right, but we expected it to be a short-term demand.”
Still, Thompson said he understands why other distilleries and alcohol producers have jumped into the fray in the spring of 2020. He said the demand for hand sanitizer in the first few months of the pandemic he hasn’t seen before or wants to see again.
“They said, ‘I need more, more, more, more.’ I really had to prioritize…I’m a wreck.”
The final batch of Mad Lab sanitizing products left the Vancouver Distillery by early 2022, while other products continued to be produced until the state ended emergency permits for production in May of that year. rice field.
Tyler Dyke, president of the Craft Distillers Guild of British Columbia, says distillers have survived the hand sanitizer switch, but Dyke specifically wants to make hand sanitizer a permanent part of the business. He said the pivot was not painless for many owners who wanted to.
Dyke, who is also CEO of Okanagan Spirits Craft Distillery, said most distilleries in British Columbia began making hand sanitizer in March 2020 after seeing shortages in hospitals and other public facilities. said.
Dik said many distilleries spent up to 80% of their total production on hand sanitizer after the government issued an emergency request for supplies. When normal supply chains resumed and sanitizer prices plummeted in 2022, BC switched to its original suppliers and told distilleries to halt production. remained, but there wasn’t much demand for it, Dyck said.
“It wasn’t hard to put it back together,” Dyck said of the production line. “The problem is that some people have invested heavily in[sanitizers]… distilleries have been disappointed.”
At most 10% of guild members went bankrupt over disinfectants, according to Dyke, forcing the entire industry to deal with an estimated $750,000 in “unrealized capital.” .
Some producers have been able to reduce inventories by selling directly to consumers. But the overall experience was so bitter, Dyke said few distilleries would make emergency supplies again in the event of another pandemic.
Most of the businesses that popped up almost overnight to cut and install barriers are now out of business, Ngo said.
What remains are those who had stable, barrier-free businesses before COVID-19, Ngo said.
Today, Sixstream has returned to making signs almost exclusively in acrylic, with the remaining barrier work including maintenance and other follow-up work.
The switchback has been smooth even for companies that not only had dedicated markets before the pandemic, but also established sources of material that could be used for both COVID and non-COVID purposes.
Many of the barrier shops created in 2020 closed well before COVID-19 restrictions were lifted, Ngo said.
Others had inexperienced installers ruining their projects.
“We always had this in stock, so even three years ago, we always had these products on our shelves.” but due to demand, we have reallocated some of our inventory to begin creating barriers and shields and these physical distancing products.”
Burnaby outdoor gear maker Mustang Survival also pivoted to pandemic-related production in 2020, converting its production line to produce medical gowns. Like Sixstream and Mad Lab, Mustang didn’t overproduce in anticipation of unfulfilled demand.
According to Paul Heal, vice president of quality at Mustang’s parent company The Wing Group, the company has never produced more than specified in the contract.
“We joked at one point about pushing the medical products sector forward. It may have been easy, but it didn’t happen.”
Mustang partnered with Arc’teryx and Boardroom Clothing on a gown production project, producing 9,000 per month from April to June 2020. Health Canada has since ordered 150,000 of his gowns, and Mustang will be in production from July 2020 to February 2021.
For Mustang, that meant a reorganization of production. The company used a similar waterproof membrane for its jackets, making staff training more difficult than sourcing materials.
The flexibility to not overextend production ultimately played a big role in the company’s ability to return to normal production, Heel said.
He said the experience has strengthened the Mustang brand and strengthened the company’s manufacturing capabilities.
“I’ve definitely learned a few things,” Heal said. “There was also demand for regular products. It got to the point where there was a push to say, ‘Let’s end this deal so we can go back to our regular products, our regular market’… in some areas. But I’ve learned to be a little more agile. ”
This report by the Canadian Press was first published on March 19, 2023.