(5512)#foodrecipes | ‘It’s a huge blow’: How businesses are moving forward after coronavirus canceled Expo West

Sydney Chasin, CEO of The Lil’ Pops, was finagling for a better booth location at the annual Natural Products Expo West on the trade show floor in Anaheim, California earlier this month when she looked down at her phone to see an email that the event was postponed — less than 24 hours before it was set to begin.

"Everybody was there all day setting up. We were already there because we said we can’t take the hit. If you’re not canceling the show, nobody is getting money back. If one buyer walks by, that was better than losing the entire thing," she told Food Dive. "And then they canceled after set up had started. It was like a ghost town there."

Many people were like Chasin, finding out the news on the show floor.

Days before Expo West's annual five-day trade show, numerous brands started dropping out because of safety concerns as COVID-19 began spreading throughout the U.S. The event, however, was still set to go on. On Monday, March 2, one day before the start, New Hope Network announced the event would be postponed.

"We were listening to the community and the position of our community changed pretty rapidly over the course of Sunday to Monday, in terms of companies that were choosing to voluntarily cancel or pull out of the show due to the coronavirus situation," Carlotta Mast, senior vice president of content and insights at New Hope Network, told Food Dive.

Chasin said she understood that New Hope Network was in a difficult situation, but if the decision had come sooner, many could have canceled their travel plans. 

"I was up multiple times the night before I flew out, Sunday night, checking to see if this was still going on, and the fact that we got a message from New Hope super late Sunday night saying that this was happening, I don’t think that was an appropriate way to handle it," she said. "That is the email that officially put people on a flight."

About two weeks later, New Hope said that Expo West would, in fact, not be rescheduled. As uncertainty around coronavirus continues, the group plans to shift its focus toward its Natural Products Expo East September trade show in Philadelphia. This is the first time in 40 years there will not be an annual natural and organic products show in Anaheim.

Similar to many other smaller food and beverage companies in the natural products industry, Chasin said Expo West is the company’s biggest expense all year, and the money they already spent on the canceled event will be difficult to recover from. Booths can cost thousands of dollars, according to an exhibit space contract, in addition to airline and hotel fare.

An independent advisory council has been formed to help New Hope establish criteria for how to disperse a $5 million rebate fund it created for those "most impacted" by the canceled show and will provide recommendations by the first week in April. According to the group's FAQ page, those who were scheduled to exhibit or sponsor at Expo West will be offered a full credit for space toward future activity.

"The timing was very unfortunate for everyone," Mast said. "We understand the mix of emotions and reactions that everybody's feeling and we're feeling them ourselves as well. ... It's really our top priority to help the community navigate the situation as best as possible."

Below are some of the stories from show attendees as they grapple with — and try to recover from — the loss of one of the biggest food industry shows of the year. 

CEO Natalie Shmulik of The Hatchery

Megan Poinski/Food Dive

 

Networks helping others recoup lost opportunity

The Hatchery, an incubator for food startups in Chicago, had 11 members planning on attending Expo West. Most of them were fairly early stage companies and many had never been to a trade show before, CEO Natalie Shmulik told Food Dive. Some were even planning to launch at the show, she said.

"It's a huge blow and it's pretty heartbreaking," Shmulik said. "It's more than just the money — and the money is significant. ...It's also just an exciting time for these companies. This is what they look forward to all year. For most, this is their entire marketing budget for the year."


"...the fact that we got a message from New Hope super late Sunday night saying that this was happening, I don’t think that was an appropriate way to handle it. That is the email that officially put people on a flight."

Sydney Chasin

CEO, The Lil' Pops


Shmulik said most of The Hatchery’s members had made the cross-country trip and found out about the postponement of the show when in California. They were trying to make the best out of the situation, but many had booths, samples, flights and accommodations to deal with — totaling thousands of dollars.

"They are trying to connect with whomever they can," Shmulik said. "...They're in the West Coast, they've got products on hand, so they're going door to door, trying to connect with retailers there. ...They want to make sure they're still working hard and making the most of the situation.”

However, the biggest cost, Shmulik said, is that of missed opportunities.

"It's a time when everyone in the industry can connect and celebrate and share information and hopefully open new accounts and build their business," Shmulik said.

The Hatchery is doing what it can to help those members both recover their losses and make some of the same connections. The incubator pledged to give all of the donations it receives in March to the 11 member companies impacted by the trade show cancellation. Shmulik said she’s not expecting those donations to zero out the dollars lost, but it is an opportunity for the wider food industry community to show its support. There have been quite a lot of people reaching out to Shmulik asking how they can help those startups, she said.

The Hatchery is also going to make a special push to help get the news out about launches, packaging redesigns or new SKUs for its members.

And the incubator hopes to expand its Annual Buyers' Event in June. Shmulik said the event itself is designed to put upstart brands together with buyers. Buyers love talking with startups, she said, but startups aren't always familiar with the process of getting into a store or restaurant, and don't always have what they need. The Hatchery works to prepare its companies to make worthwhile pitches to buyers for the event — one of the important things that brands do at Expo West. While the buyers' event won’t be as large as Expo West, Shmulik hopes to bring buyers out this year to give their startups more people to pitch to.

"Hopefully, these companies will be able to overcome this hurdle," Shmulik said. "It's a big one, but that’s part of business sometimes too, these ups and downs. We're rooting for them all to get past it."

Brian Erickson, new markets program manager at the Minnesota Department of Agriculture, told Food Dive that his team had just landed at Los Angeles International Airport and hopped into a rental car when they heard the news. Erickson was running the Minnesota pavilion at the Expo, which was a 2,300-square-foot space with 17 brands.

"If you're going to postpone an event, you don't want to do it a day and a half before when you have people traveling from around the world to go there. Of course, this decision was, I'm sure, agonizing for them as well. It's not good for anybody, but the timing was particularly problematic,” Erickson said. 

Erickson said he is trying to connect Minnesota businesses with opportunities and special offers that have been spread throughout the community on forums such as LinkedIn

"We're trying to make sure that they're all connected to those opportunities," Erickson said. "You know, frankly, I don't know that there is a way to recoup this cost."

The hope of faster expansion stalls

Ian Walker was coming to Expo West with hopes of meeting funders and buyers to try and make a U.S. launch of his brand, Hippie Snacks, a success — and to put the mistakes of 20 years ago behind him.

"I actually had a small brand that I brought to the States in the late '90s," Walker told Food Dive. "And I was a young guy, just out of university, and I did everything wrong. So we kind of retreated back to Canada and said, 'We're never going back to the States until we have the right products. We'll go back on our own terms.'"


"It's a huge blow and it's pretty heartbreaking. It's more than just the money — and the money is significant. ...It's also just an exciting time for these companies. This is what they look forward to all year. For most, this is their entire marketing budget for the year."

Natalie Shmulik

CEO, The Hatchery


The years have helped Walker learn more as a businessman and also improve his brand. Now known as Hippie Snacks, the brand is well known throughout Canada for its cauliflower and avocado chips. And with success at home, the best way to grow is to look south. Hippie Snacks entered the U.S. market last year through a partnership with Starbucks, and Walker thought Expo West was the right time to show the rest of the nation what he had.

The company’s biggest need to grow is more funding. Because the products, which are made from custom ground ingredients, are difficult to make, Walker said the company has to expand its plant. He's been talking to potential investors who could help make that happen, but was hoping to have some face time with them.

While Walker said his business can and will go forward without Expo West, the show's cancellation really will hurt them too. Hippie Snacks has made some inroads with potential U.S. investors, but phone conversations, emails and videoconferencing can only go so far.

"It's amazing how visual is important. How seeing people and seeing the product and having that tangibleness is a lot harder to dismiss than just an email or a phone call," Walker said. "There's a real importance to that physical nature. You know, I think that gets lost with this new way of doing business. ...We have to remember that everything we are selling in this goes in peoples' mouths. That's a super important thing."

Brainiac Kids' booth at Expo West

Permission granted by Brainiac Kids

 

Finding ways to make up for what was lost

Mark Brooks, co-founder and president of Brainiac Kids, told Food Dive that his yogurt brand launched at Expo West in 2019 and the company was planning to scale up this year with a bigger booth to launch products for its one-year anniversary. 

"The booth was set up. I got beautiful pictures of our incredibly brand-spanking new booth featuring our new product launch," Brooks said.

But no one was able to see it. Hours after it was set up, the show was postponed. In an attempt to make up for the loss of buyers that would come from the show, Brainiac Kids is offering retailers a stocked shipper of its new applesauce for free. The company also said it will donate all of the product that would have been served to Expo West's planned 90,000 attendees to local children instead.

"I have inventory that was ready for a national launch. What should I do about that? I can't afford to lose six months in the market, and so we have to do something very different, very bold," Brooks said. "It's kind of doubling down on the loss, but somehow we got to play to win."

No Evil Foods co-founder Sadrah Schadel said she and her staff spent months planning menus, logistics, coordinating resources, staffing and other details ahead of Expo West. 

Staff had arrived in Anaheim, preparing its most popular plant-based meat items, including chicken salad lettuce wraps, BBQ sliders and corn chorizo tostadas that it would hand out to thousands of attendees. The gathering, and its sister event Expo East held in September, are one of the few chances No Evil has to connect with suppliers and hand out product samples in one place.

Suddenly the event was canceled.

"It's a significant investment that we won't be able to recoup," Schadel told Food Dive. "When you talk about bringing the booth in, all of the supplies and logistics, the people, the hotels that we had booked for the week, the airfare, all of that, it's somewhere, I'd say between $35,000 and $50,000 by the end of it."  

Instead, No Evil Foods handed out its samples to protestors at a nearby Smithfield Foods slaughter plant, opened a popup outside a Los Angeles restaurant and offered tastes at a launch party for a plant-based cooking show on Amazon Prime. The company has now shifted from retailers at Expo West to boosting brand awareness among consumers.

Schadel said it is turning to Skype and spending more money flying its staff to meet with buyers to connect with retailers and distributors.


"It's a significant investment that we won't be able to recoup. When you talk about bringing the booth in, all of the supplies and logistics, the people, the hotels that we had booked for the week, the airfare, all of that, it's somewhere, I'd say between $35,000 and $50,000 by the end of it."

Sadrah Schadel

Co-founder, No Evil Foods


"We have always been very good at doing a whole lot with very little, and we will continue to do that," she said. "But we'll bounce back, we always do."

Schadel, who said Expo West made the right decision in canceling the event, said No Evil will probably be back again next year despite some initial hesitations.

"The future of this show, given this experience, is a little precarious right now," she said. "But I think that it is such an institution in the natural product world that these shows are going to continue to happen. And if we want to remain competitive and grow our brand awareness, we will continue to attend."  

Like No Evil Foods and Brainiac Kids, Bill Sipper, managing partner of brand management firm Cascadia Managing Brands, had already made the trip to the West Coast.

Sipper told Food Dive he had planned on meeting with some existing Cascadia clients, as well as checking out the show to find promising upstarts and see the up-and-coming trends firsthand. 

The cancellation changed many of those plans, but it didn’t negatively impact Sipper's total business strategy. As a long-time management firm, Cascadia, which maintains a relatively small portfolio of eight to 10 brands, didn't need Expo West to find new clients. 

But, Sipper said, he knew that the show’s abrupt cancellation could be devastating for the types of brands Cascadia works with. Soon after the show's postponement was announced, he sent out an email offering any nonalcoholic beverage or snack brand that was supposed to exhibit at Expo West a month of free consulting services to help them recover from the loss of the show.

Sipper received 27 inquiries from companies. He said this would be a lot of work, but he would make sure to get to them all.

"I think that it is something that we had to do, as leaders in the industry," Sipper told Food Dive.

While the free month of consulting services is very basic and is meant to help brands continue to focus their strategy and keep going without the benefit of the trade show, Sipper said it’s the least he can do to help out. 

"For small companies, it's critical," he said. "I mean it's one of the few trade shows in the world … that really has an impact still."