By Olivia Robertson
As most are familiar, many aspects of life were negatively impacted by the COVID-19 pandemic. Many businesses, especially small businesses, were searching for ways to work around unfavorable circumstances and survive.
A new case study by Kelly Goldsmith, E. Bronson Ingram Professor of Marketing, and M’Kenzie Steel (MBA’21), Head of Marketing and Brand Strategy at Daily Crunch, provides an inside look into the trials and tribulations of marketing a small business that was set to launch concurrently with the start of the COVID-19 pandemic.
“Daily Crunch was a fascinating company to profile in a case study because what they experienced, trying to get their startup off the ground right when the pandemic hit, represented a unique moment in the history of business, which I could not resist trying to capture,” says Goldsmith.
Daily Crunch, a Nashville-grown startup, had plans to launch on National Snack Day in March 2020. However, with COVID-19 leading to global shutdowns at this same time, Daily Crunch’s CEO, Laurel Orley, was forced to develop a new plan for her business to succeed during this unprecedented time. The original plan involved in-person marketing with sampling and visits to businesses and food expositions where their product would be popular. However, with the pandemic leading to reduced human contact, they were forced to rely on digital marketing and e-commerce.
In this discussion, the authors follow the trends of different commerce outlets used by Daily Crunch, including Fulfillment by Amazon, online wholesale, business-to-business sales, and their own website. They find that the highest profits were from the Daily Crunch website where they were able to directly interact with the businesses and individuals purchasing their product. However, marketing their product in a direct-to-consumer manner proved to be challenging as they were forced to spend their advertising budget on different marketing methods.
The authors also note a large increase in sales revenue when Daily Crunch began working with KeHE, a health-food-focused wholesale distributor that allowed grocery stores to purchase products from different businesses. Daily Crunch was selected for a KeHE program that introduced many new and innovative products to consumers, and in their first month, the sales revenue from large-scale distributors had grown by 9 times the size of sales in the previous month.
The research also looks at Fulfillment by Amazon, presenting that though there are many benefits such as reaching 126 million Amazon Prime subscribers and access to Amazon Marketing Services, the fees totaled on average 24% of the product revenue before advertising expenses.
The case study states that private-label brands in the nut, seed, and trail mix sectors were the only brands that showed improvement in their market shares between fall 2019 and fall 2020 – a positive light for Daily Crunch. However, there were still some gray areas regarding how to move forward. Should businesses continue working primarily through e-commerce? Will consumers remain more value-conscious due to economic uncertainty?
“Since the research was performed, grocery store distribution has become a vast part of [Daily Crunch’s] business,” says Steel. “Daily Crunch has seen e-commerce sales grow rapidly, mainly through Amazon and online groceries such as HungryRoot and Thrive market.”
Steel also notes that consumer behavior is changing; consumers are becoming more intentional with aligning their personal goals with their consumption.
“Consumers are also doing more research about new foods through Amazon, TikTok, Instagram, and online blogs,” says Steel. “All of these have positively affected [Daily Crunch’s] healthy startup snack business.”
Looking forward to the future, Goldsmith reflects on how the case can inspire other businesses, stating “macro-level factors that are totally out of your control can derail the best-laid business plans […] the case offers a great road map for being flexible and adaptive that all types of companies can learn from.”