COVID-19: Are companies surviving the pandemic pivot?

Nick Ngo still vividly remembers the spring of 2020 and the sudden influx of new stores making the same acrylic screens as his business.

“During that time, companies popped up like mushrooms. I remember (that) anyone with a saw could cut it,” says Ngo, project manager at Sixstream Signs Ltd. in Surrey, British Columbia. “I don’t necessarily agree It does, but that’s what they’re doing.”

What Ngo sees is part of a larger trend of a swath of companies jumping suddenly into the COVID-19 economy, shifting production away from other sectors to make everything from protective barriers and hand sanitizers to cleaning wipes and personal protective equipment.

Fast forward three years, and many of the companies that produced and sourced PPE in the early days of the pandemic have gone out of business. But others, like Sixstream, had existing product lines before pivoting to pandemic-related products related to social distancing and hygiene, but have successfully pivoted back as supply lines and demand factors have recovered and stabilized. in situ.

Scott Thompson, founder and distiller at Mad Laboratory Distilling in Vancouver, has shifted from producing whiskey and other spirits to alcohol-based hand sanitizer and wipes during the pandemic.

With Mad Lab now back in full-time production of alcoholic beverages, Thompson said the key to navigating the COVID-19 market was determining the nature of the volatility and developing long-term plans accordingly.

“We decided not to make selling sanitizer part of our business,” Thompson said. “It turns out we were right, but we hope it will be a short-term need.”

Still, Thompson said he can understand why other distilleries or alcohol producers would go all-in in the spring of 2020. In the early months of the pandemic, he said, there was demand for hand sanitizer that he hadn’t seen before — or hoped to see again.

“They said, ‘We need more, more, more, more,’ and I thought, I can do so much, this is what I can do. And really have to prioritize who gets it first… I It’s a shipwreck.”

The last of Mad Lab’s sanitized products left the Vancouver distillery in early 2022, though others continued to be produced until the province ended its emergency production authorization in May of that year.

Stills have survived the hand sanitizer switch, said Tyler Dyck, president of the Craft Distillers Association of British Columbia. But, Dyke said, the transition hasn’t been easy, especially for the many homeowners looking to make hand sanitizer a permanent part of their business.

Dyck, who is also CEO of Okanagan Spirits Craft Distilleries, said most distilleries in B.C. started producing hand sanitizer in March 2020 because they saw shortages in hospitals and other public facilities.

Dyke said many distilleries are spending 80% of their total production on hand sanitizer after the government issued an emergency request for supplies. When normal supply chains resume and sanitizer prices plummet in 2022, BC switches back to original suppliers and tells brewers to stop production. Dyke said they had only “hundreds of thousands of liters” of sanitizer left, but no major demand.

“The transition back was not difficult,” Dyke said of the line. “The problem is that some people have invested a lot in (disinfectants) … wineries are disappointed.”

With up to 10 percent of guild members breaking even on sanitizers, the industry as a whole is forced to deal with an estimated $750,000 in “unrealized capital” when alcohol that could have been used in spirits is made into sanitizers for storage, Dyke said. agent.

Some producers have managed to reduce inventories by selling directly to consumers. But the whole experience was so traumatic that Decker said few wineries would be producing emergency supplies again if there was another pandemic.

Most of the businesses that cut and installed barriers that popped up almost overnight are now out of business, Ngo said.

Those who stay are those who had stable, hassle-free businesses before COVID-19, Ngo said.

Today, Sixstream is back to making signage almost entirely in acrylic, with the rest of the barrier work involving maintenance or other follow-up work.

The transition has also gone smoothly for companies that not only had a dedicated market before the pandemic, but already established sources of material that can be used for both COVID and non-COVID purposes.

Ngo said many of the barrier stores created in 2020 closed before COVID-19 restrictions were lifted because they could not get acrylic through frayed supply chains.

Others have inexperienced installers who screw up projects.

“We’ve always had stock, so even three years ago, we’ve always had these products on our shelves,” Ngo said of the acrylic used by Sixstream. “Again, we mostly used them for signage, but because of demand, we did reallocate some inventory to start making barriers and shields and these physical distancing products.”

Burnaby outdoor gear maker Mustang Survival also shifted its focus to pandemic-related production in 2020, shifting production lines to make protective medical clothing. Like Sixstream and Mad Lab, the Mustang wasn’t overproduced because anticipated demand never materialized.

Mustang parent company The Wing Group’s vice president of quality, Paul Heel, said the company never produced more than what was contracted.

“We joked at one point that there would be a medical products division in the future,” Heel said. “If there was an opportunity for more products, if Health Canada was interested in doing that, it might be easy to move forward, but that hasn’t happened.”

Mustang is partnering with Arc’teryx and Boardroom Clothing on the gown production project, producing 9,000 pieces per month between April 2020 and June 2020. Mustang then ordered 150,000 gowns from Health Canada between July 2020 and February 2021.

For Mustang, that means restructuring production. Training staff was harder than sourcing materials because the company uses a similar waterproof membrane in its jackets.

That flexibility, rather than overproduction, ultimately played a big role in the company’s ability to return to normal production, Heel said.

The experience has solidified the Mustang brand and strengthened the company’s manufacturing capabilities, he said.

“We did learn a few things,” Heel said. “We also have demand for our regular product. It’s gotten to the point where there’s been a push, ‘let’s get this contract done so we can go back to our regular product, our regular market’… …We’ve learned to be a little more agile in certain areas.”

The Canadian Press report was first published on March 19, 2023.

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