Before the coronavirus pandemic, many food and beverage companies were not drawn to direct-to-consumer channels. Numerous food and beverage items are perishable and delicate. Therefore, they depend on quick delivery. Customers often want to pick out their own items to make sure they get the ones that are right for them.
Even though companies and customers were slow to adopt the direct-to-consumer (DTC) shipping option in the food and beverage industry, the pandemic changed everything. Elevated concerns about health and safety, local lockdowns, and increased demand for product delivery have forced food and beverage companies to adapt. Now, many businesses are pivoting, focusing on direct-to-consumer channels as they reorganize to meet the demands of the market.
Unfortunately, shipping charges have increased significantly as well, taking a major bite out of food and beverage company revenue. Now that new habits have been established, how can food and beverage providers optimize their shipping strategies to meet long-term demand for DTC options? Learn more about the top recommendations below.
Examine Data Related to Shipping: Before and After
Even though many companies are still in the process of evaluating their new normal, most businesses now have several months of data they can use to figure out what is working and what is not. In particular, companies need to pay close attention to several areas, including:
- What services they use the most, including ground shipping, air shipping, and expedited shipping
- The average weight of the orders they ship
- How long it takes their orders to get where they need to go
Businesses need to pay close attention to how much money they are paying for shipments, how much they are charging for each order, and how much their shipping expenses are eating into their revenue numbers. The only way food and beverage companies will be able to address shipping concerns is if they know where the money is going.
Analyze the Performance of Each Carrier
Next, food and beverage companies need to take a look at the performance of the individual carriers they use. It is not unusual for food and beverage companies to use different carriers for ground, air, and expedited shipping. A lot of food and beverage companies make guarantees that products are going to arrive at the customer’s doorstep intact, fresh or frozen.
Food and beverage companies depend on their carriers to hold up their end of the deal. It might be possible to speak to carriers who performed well and negotiate some assurances, increasing the reliability of shipping carriers while also building customer loyalty.
Renegotiate Contracts with Shipping Carriers
Many food and beverage companies do not pay close attention to their shipping contracts. With food and beverage companies shipping more orders than ever before, it is important to change shipping contracts to reflect a changing business model.
Food and beverage companies should take a look at their historical numbers, establish the forecast for the rest of the year, and use these numbers to negotiate changes in shipping contracts. Some shipping carriers might be willing to negotiate a cheaper rate for large, bulk orders. This can lead to massive savings every year.
Adapt to Changes in Consumer Behavior with the Help of Gray Growth Logistics
Consumer behavior has changed significantly during the past 18 months, and many of these changes are here to stay. If you are ready to adopt a full-fledged DTC model, you should work with professionals who can help you get the most out of these models. At Gray Growth Logistics, we can help you do exactly that. Contact us today for help setting up your DTC model!