The COVID-19 crisis generated changes in consumption and sales strategy in Panama’s local industry. Part of the lessons learned from last year’s coronavirus pandemic has to do with how companies respond to new consumer demands while trying to keep the supply chain uninterrupted: from production to the marketing channel to reach the end-user and adopt new business models in the digital era. Aaron Rodriguez, a specialist in digitalization processes and market research, provides a detailed explanation of how Panama has taken positive advantage of digitalization after the COVID-19 crisis hit its businesses hard.
A clear example of this is Empresa Panameña de Alimentos (EPA), which has made it clear that the task has not been easy. This entity annually produces 12 thousand tons of products and integrates two industrial centers, distribution agencies throughout the country and acquires more than 50% of the country’s coffee harvest, and employs 1,400 collaborators.
“EPA is an important actor in the country’s food supply,” emphasizes Rodriguez, pointing out that the pandemic was a surprise event for the company, even though it had contingency plans and saw a crisis like this as something far away. “In March of last year, it was prepared for the start of classes, which is a high consumption season, so this crisis took us with full warehouses.”
EPA’s first reaction was to set up the biosecurity devices, send 100% of the administrative personnel to telework, and ensure the operating personnel with all the sanitary controls in the different facilities of the company.
“This company knew how to manage its operations so that it was not so affected, and that is something that has really surprised me,” Rodriguez said. “The inventory in the warehouse, which could have been at risk of being lost, was placed in different programs and social organizations to help those affected by the pandemic, such as the Food Bank, which without a doubt, is an action that deserves to be applauded.”
The company refers that in the midst of the pandemic, consumption of the company’s emblematic and recognized brands increased, added to the new way in which users now interact with brands, which privilege digital sales channels. It also details that there was a rearrangement of the participation within the commercialization chain served by the company.
Before the pandemic, supermarkets accounted for 40% of the commercialization of the product portfolio distributed by EPA; stores and wholesalers had 45%, while restaurants and restaurants had 15%.
With the sanitary crisis imposed by the confinement between March and part of September last year, which meant the closure of businesses such as restaurants, hotels and small neighborhood stores, the commercialization structure was altered and affected. Supermarkets as modern channels gained ground in consumer preference which accounted for 60% of EPA’s business; stores and wholesalers became 30% of marketing, while hotels and restaurants dropped to 10%.
The number of customers served before the crisis, for example, businesses to which EPA supplied products, was 9,000 per week. It is estimated that of this number, about 3,500 establishments closed at the beginning of the health crisis.
Currently, although economic activities have resumed, certain businesses remain closed, or with limited operations. Most of them are neighborhood stores and small businesses. “It is possible that approximately 500 commercial clients may not have had the capacity to open, or they are recovering up to this moment,” indicates Rodriguez.
EPA sought to readjust its strategy to revive the entire chain and meet the demands of consumers. Part of this adjustment has to do with new digital tools. The company also designed a platform for consumers to place direct orders through eCommerce, which was implemented earlier this year.
There is no doubt that for EPA the pandemic has been an opportunity to innovate, reinvent itself, and drive demand with new consumer insights. Like this company, many others, both inside and outside of Panama, have managed to adapt to new eras and thus survive a crisis that has not yet completely faded.