Pivot in Packaging
COVID-19 has significantly disrupted the U.S. foodservice sector. One of every six restaurants has permanently closed, and those that have survived are operating with reduced capacities and limited menu offerings. This hardship has reverberated across the foodservice supply chain.
Ventura Foods was among the businesses keenly impacted by the pandemic.
“What initially began as an issue sourcing packaging and ingredients from China quickly became a demand shift challenge,” said Erika Noonburg-Morgan, EVP, CFO of Ventura Foods. “Restaurants moved exclusively to take-out and delivery service due to stay-at-home mandates. We quickly pivoted our operations to ensure our customers, especially quick-service operators in the chicken, pizza, and hamburger segments, received the products they needed in the individual packaging formats consumers required.”
Ventura Foods manufactures dressings, sauces, mayonnaise, frying oils and margarine for the world’s most demanding kitchens in the U.S., Canada, and more than 60 other countries, and produces retail brands including Marie’s® dressings, LouAna® oils, Dean’s® dips, and Gold n’ Soft® spreads.
“Volume dropped nearly 50% in April 2020 following stay-at-home orders, requiring us to furlough employees for the first time in our company’s history. We navigated unprecedented business challenges almost daily,” Noonburg-Morgan said.
I can't think of a better business partner than CoBank to help us through this pandemic.
– Erika Nuunburg-Morgan, EVP & CFO, Ventura Foods
Right from the start, Ventura Foods adjusted safety protocols to keep people safe and production lines flowing. “We then began the work of assessing what this pandemic would mean for our business in the short and long-term,” she said. “We adjusted our financial metrics to evaluate our business against the crisis and ensured clear, frequent communication between our leadership, board of directors, and employees.”
In keeping with its strong values-driven culture, Ventura Foods guaranteed frontline pay and benefits for those employees furloughed in April and quickly returned them to work as the stay-at-home orders lifted.
“We are fortunate to have taken steps before the pandemic, with the April start of our fiscal year in mind, to strengthen our balance sheet,” said Noonburg-Morgan. By August, due to continuing market uncertainty, Ventura Foods turned to CoBank, its primary lender for 20-plus years, to close on a new $100 million, five-year unsecured revolving term loan.
“I can’t think of a better business partner than CoBank to help us through this pandemic,” Noonburg-Morgan said. “We came into 2020 in a position of strength, and we were able to take steps to further strengthen our liquidity. It’s a great feeling to know that, with CoBank’s help, we’ve done everything possible to protect ourselves financially.”