Meat producers and distributors are notorious laggards when it comes to embracing ecommerce, preferring instead to rely on the same basic sales model they have used for decades: selling to supermarkets, grocery stores, restaurants and food-service providers through their sales teams.
But the effects of the coronavirus pandemic has begun to alter meat producers’ and distributors’ approaches to sales as more businesses, and consumers, are increasing their reliance on ecommerce to make purchases.
Over the past year, Silver Fern Farms Co-op Ltd., a Dunedin, New Zealand-based cooperative of 16,000 New Zealand sheep, cattle and deer farmers, and Marx Foods, a Seattle-based distributor of specialty and game meats, poultry, seafood, produce, and more, have taken steps to up their ecommerce game and learn how to better engage customers online.
While both companies are placing a greater emphasis on ecommerce, each has taken a different path along its journey. Silver Fern Farms, for example, launched a direct-to-consumer channel. Marx Foods, a distributor for Silver Fern Farms, is launching a B2B ecommerce site to complement its retail site at MarxFoods.com, which already receives some orders from businesses as well as consumers. As the pandemic disrupted in-person B2B sales transactions, Marx’s business customers began to place more orders through the retail ecommerce site.
“When the pandemic hit, our online business took off, and it reminded us of the need for diversification in how we digitally service our customers,” says Justin Marx, the fifth-generation chief executive of the family-owned Marx Foods.
Many reasons to dive into ecommerce
For Silver Fern Farms, which had been looking to open a direct-to-consumer ecommerce channel the past five years, the decision to take the ecommerce plunge was driven by myriad factors.
First, the company figured a business-to-consumer website would establish a stronger brand connection with consumers. Second, Silver Fern ran into distribution issues when stores and restaurants began closing as the pandemic swept the globe. Finally, the explosion of consumer ecommerce sales during the pandemic for all types of items, including food, convinced the company the time was right to launch a B2C channel. Indeed, online purchases of groceries have increased 41% since the pandemic hit, according to management consultants McKinsey & Company.
The new Silver Fern Farms ecommerce site, which launched last November just before Thanksgiving, is intended to service consumers in the United States, the company’s second-largest market after China. It is also expected to build on Silver Fern Farms’s brick-and-mortar retail presence in the United States. Silver Fern Farms, which opened its first retail store in the U.S. in 2019, has 615 retail locations in the New York City metropolitan area, the Midwest and California.
Building a closer brand connection to customers
Consumers logging onto the website can purchase bundled items, which contain various cuts of meat, such as steaks and ground beef, as well as individually packaged cuts. The website, which runs on the Shopify Plus platform, was developed and launched in about six months, Silver Fern Farms says.
“Our goal is to build a closer connection to our brand with consumers, and having a direct-to-consumer website is a way to tell our story about our sustainable farming practices and the quality of our meats,” says Kyle Wehner, strategic marketing project manager for Silver Fern Farms. “Traditionally, we have followed a wholesale and commodities sales model. Having a quick path to market for ecommerce, which Shopify offered, was important to us.”
While Silver Fern Farms declines to reveal sales volume through the website since its launch, the company says it is experiencing steady revenue and repeat-customer growth.
Looking ahead, Silver Fern Farms plans to track such metrics as how consumers navigate the site, whether consumers favor bundles or single-serving packages, and frequency of purchases. The company will use that data to determine the type of products to add to the website.
“We’re in the initial learning stages right now and expect to evolve the site a lot in the next 12 months when it comes to the customer experience and how we engage the customer,” says Wehner. “What products get added in the future depends on the data we gather. Being our own supply chain puts us in a better position to create a better end-to-end customer experience.”
For Marx Foods, B2B and B2C
While Silver Fern Farms sought to launch an ecommerce channel to engender brand loyalty with consumers, Seattle-based Marx Foods is planning to launch a B2B site in April to better service the B2B customers purchasing online through its B2C website, which launched in 2007. Prior to launching the site, which accounts for all its B2C sales, Marx Foods operated a retail store in Seattle but shuttered it after launching ecommerce sales.
Despite the lack of a dedicated B2B website, Marx Foods, which carries Silver Fern Farms products, has plenty of experience selling digitally to businesses. When a B2B buyer enters their credentials to log into the retail site, they wind up on a special landing page with products geared to their needs, such as cases of food items.
While B2B ecommerce sales represent just 2% of Marx Foods’s total ecommerce volume, they have grown considerably since the start of the coronavirus pandemic. And Marx Foods expects them to keep growing in the coming year, says Justin Marx.
To promote its new B2B website, which will run on the Oracle NetSuite platform just as its B2C site does, Marx Foods has begun an email marketing campaign for its B2B clients. In addition, the company plans to extend many of the same customer service tools used by its sales representatives and on its B2C site to the new B2B site. For example, online B2B buyers will be able to contact customer service reps with specific product questions, plus questions about how to better manage food costs to help minimize waste, which is a big issue with restaurants.
“Ecommerce is a hugely important part of our business,” Marx says, “which is why we are putting the resources and energy into expanding it.”
Peter Lucas is a Highland Park, Illinois-based freelance journalist covering business and technology.
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