‘There’s no rulebook for this’: St. Louis chocolate company VP talks weathering the coronavirus crisis
Chocolate Chocolate Chocolate Co. has ramped up manufacturing safety protocols and closed retail stores while experiencing a drop in sales.
They had spent the last nine months carrying out the acquisition of Bissinger’s by installing manufacturing equipment, onboarding staff, importing customer data, creating new catalogues and redesigning packaging.
Dan Abel Jr., v.p. of operations, said it felt like his family had jammed two years of work into that nine months, nearly needing to go into holiday-level overtime production in January and February.
And it was all starting to pay off. Bissinger’s was seeing positive gains in wholesale, retail and direct-to-consumer channels, and the Abels were earning praise from confectionery industry colleagues for their efforts.
“The second it all started working, the whole industry stops,” Abel said.
Late February and March brought the spread of novel coronavirus, causing more than 5,500 cases of COVID-19, coronavirus-related respiratory illness, across Missouri and Illinois. Under government order and concern for their customers, many companies have closed retail stores.
While food manufacturing has been deemed “essential infrastructure,” allowing it to continue, the COVID-19 pandemic has prompted CCC to adopt even stricter safety protocols. There’s also the challenge of meeting payroll in the face of canceled or delayed product orders.
“There’s no rulebook for this,” Abel said. “We’re all running day by day. I hope every decision we make is the right one.”
Changes in operations
Factory tours have been a cornerstone of CCC’s business, but with the onset of coronavirus, suspending them was the first step, Abel said. He pointed to a local coffee shop, which had a customer with one of the area’s preliminary cases visit and unknowingly exposed the business to coronavirus.
That scenario would be catastrophic for a food production facility.
“If someone goes on a tour and two days later tests positive for coronavirus, then they’re going to come back and let us know, we’ll have to shut the whole company down because they came into the factory,” he said. “It’s not worth the risk.”
A week after suspending tours, CCC closed its retail stores on March 20, just days before the city of St. Louis and St. Louis County issued stay-at-home orders for citizens. Meanwhile, the company’s wholesale, private label and contract customers began canceling or delaying orders.
Abel said his family’s company is trying to make the best of the situation. One production line is running to fulfill increased online orders, make Mother’s Day products and get ahead on manufacturing items with long shelf lives. Its other two production lines are undergoing annual cleaning and maintenance originally scheduled for July.
Abel noted the company hasn’t cut its staff, but 20-30 percent of employees have elected to take vacation time or requested to stay home with children or other family members.
“We understand that,” he said. “There’s no penalty to them, and we’re working with them. Anybody in our retail division or our manufacturing division, if they want to work we will find them a job. As long as we can operate, we will do it.”
On the manufacturing side, Abel said workers have been further spaced out on manufacturing and packaging lines. An employee is stationed in the sanitation area to count out three pumps of soap and 20 seconds of hand-washing time for their colleagues. The company has also staggered lunchtimes so the dining area isn't crowded.
CCC is also taking this opportunity to renovate its second retail store, which opened in Kirkwood, Mo. in 1999. Abel said his family had planned to update the store before but postponed the renovation for the Bissinger’s acquisition.
With new paint, flooring and light fixtures, the Kirkwood store will be the model for CCC’s five other retail locations, Abel said.
In the meantime, CCC is accepting call-ahead pickup orders at its factory store in St. Louis and its store in St. Peters, Mo. Customers can also visit the factory store, point to items they’d like on display in the lobby, and an employee will gather the items and process payment while wearing gloves. No customers will enter the retail stores.
It’s not ideal, but Abel hopes these options, along with online orders, will allow the company to salvage some Easter sales. He’s not getting his hopes up, though.
“I think if we’re down 50 percent, that would be the ultimate goal,” he said. “I think that’s being optimistic. It’s terrible.”
Easter may turn out to be a bust, but Abel is focusing on May. He hopes customers will buy chocolate for Mother’s Day, and ideally, to satisfy unfulfilled cravings. Abel also hopes the company’s grocery customers will restock once the increased demand for cleaning supplies and other essentials lessens.
“Once this is over and we can stabilize, they’ll realize the shelves are empty and we’ll get a big surge of infill again,” he said.
Abel is also optimistic about the aid to be offered through the $2 trillion stimulus package Congress passed and President Donald Trump signed into law last week. Bank loans backed by the Small Business Administration would be forgivable if used for payroll, rent, mortgages or utilities.
“That would be a huge thing for us, because 90 percent of the products we’re manufacturing now are long shelf-life items that we’re not going to get paid on for a long time,” he said. “To get some assistance in covering payroll for the short term is going to be key to our survival.”
Abel is concerned about generating new business and staying connected with buyers ahead of the holiday season without attendance at annual trade shows. Natural Products Expo West, set for early March, was postponed and then canceled. Sweets & Snacks Expo, scheduled for May, has also been canceled.
Abel is also concerned about the Summer Fancy Food Show, set for June in New York City, the epicenter of the COVID-19 outbreak in the United States. The Javits Center, the venue for the show, is being converted into an emergency hospital for COVID-19 patients.
While having revenue from both CCC and Bissinger’s is sustaining both companies for now, the uncertainty and fear surrounding the COVID-19 pandemic will continue to affect business, Abel said.
“We’re being punished so badly for something we didn’t do,” he said. “I think that’s how America feels.”