At the recent Brodies Food and Drink conference, we heard from two businesses that have responded to the Covid-19 pandemic through innovation and taking their business online to engage directly with consumers in new ways. Root to Market, a venture from the team behind Edinburgh's Fhior restaurant, and Adelphi Distillers, which operates the Ardnamurchan Distillery, are very different businesses, but both had inspiring stories to tell.
Scott Smith, chef and owner of Fhior, described the launch of Root to Market. Root to Market's original proposal was simple – provide a way for consumers in Edinburgh to receive home deliveries during lockdown with top quality produce from local producers and "home meals" prepared by the restaurant's team.
In return, Fhior was able to redeploy its restaurant staff and consumers were able to support producers whose trade business had dried up overnight when cafes and restaurants closed. As Scott said, "sommeliers were driving delivery vans."
From a very basic online form launched within 24 hours of lockdown being announced, Root to Market now operates a full ecommerce site and continues to add new suppliers and products. From a proposition borne in lockdown, Root to Market looks like it is here to stay, serving a newly created market.
Adelphi – whilst a historic name in Scotch whisky – in its present-day form operates a fairly new distillery on the Ardnamurchan peninsula, which started producing spirit in 2014. Adelphi launched its initial release of the Ardnamurchan single malt on 1 October this year.
Managing Director Alex Bruce explained that the Covid-19 pandemic meant that many of the usual promotional and launch activities were not going to be possible. This could have hampered the launch, but it just meant that Adelphi had to find alternative ways of getting its message out to consumers. For example, Adelphi ran a number of online tastings with partners including Royal Mile Whiskies, reaching into markets across the globe.. This online and direct to consumer activity was driven by Covid-19 but also highly successful as a result – with stocks running out within 7 minutes of launch.
You can read more about Adelphi's story in this blog by my colleague Jennifer Dool.
Taking your business online – what are the issues to think about?
In a crowded market, standing out online means a strong brand, effective use of social media and partnerships with third parties to promote it.
Make sure your proposed brand doesn't infringe any existing businesses, and take advice on obtaining registered trade mark protection in the countries in which you operate. Make sure you register your domain names and social media accounts. If you are partnering with other organisations, be clear on what each party is doing, and that you retain control of your brand.
Trading direct with consumers raises a number of compliance issues that need to be borne in mind.
Consumer contracts are subject to far more regulation than business to business contracts, including rights for consumers to cancel contracts (though these don't generally apply for fresh goods, goods that are personalised or en primeur sales of alcoholic beverages). It's important that you check your website provides consumers with all necessary information around things like cancellation and delivery charges, and that your contract terms comply with the rules.
You'll also want to ensure that your advertising, products and packaging comply with all relevant regulatory requirements. In particular, as we approach the end of the Brexit transition period, businesses will also need to consider a wide range of issues that are likely to impact trade and EU market access. For further commentary and insight, please see our Brexit checklist.
Finally, producers will be collecting personal data on consumers and creating marketing databases. It's important that this is done in accordance with data protection laws and that electronic marketing campaigns comply with ePrivacy rules.
With both customer terms and conditions and privacy notices it's important that any templates provided by the provider of your online shop or payment platform are reviewed carefully and used with care. Often these will need adapting. In particular, privacy notices need to be customised to each business to ensure that they accurately reflect what that business will do with the consumer's information.
Using Blockchain for food and drink traceability and transparency
At the conference, Alex Bruce, also spoke about Adelphi's use of blockchain technology to verify the provenance and authenticity of Adelphi products. Using a QR code and a smartphone, the consumer can verify the bottle that they have purchased and find out every step of the production process and trace the components back to source. Through localisation, that information can be displayed to the consumer in their local language.
You can read more about the Adelphi example of blockchain in this blogby my colleague Grant Strachan.
However, Alex's ambitions go beyond just modernising the consumer experience. The system implemented by Adelphi can also be used for detecting parallel imports (because it will be possible to trace each bottle through the supply chain and see how it got to market) and, with further planned development, to integrate with HMRC and other third parties.
Blockchain often gets a bad reputation as being a solution looking for a question. The food and drink sector is an exception to that, where there are some genuine benefits to both consumers and brands, particularly in sectors where provenance and authenticity are important.
However, as with any IT system, it's essential that businesses look carefully at their contract with the platform provider. What happens when you fall out or if your provider becomes insolvent? Can you move to another provider, or are you effectively tied in? How long will the system be supported for? These are just some of the questions to consider.
If you would like to find out more about how Brodies can help you take your brand online, or use innovative technology such as blockchain, please contact Martin Sloan or Grant Strachan.
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