The Covid-19 pandemic caused online sales of consumer packaged goods to take off and, according to a recent Prosper Insights & Analytics, 44.6% of adults 18+ are changing their shopping behavior and shopping in stores less. As a result of this shift, even CPG categories that have historically been slower to embrace E-commerce, such as the food and beverage industry, have begun shifting their strategies and dedicating resources towards online channels.
That very same Prosper Insights & Analytics reports 45.2% of adults 18+ believe the changes they made to their shopping behaviors due to Covid-19 will become habits after the pandemic is over, so it’s clear leveraging these online channels is crucial as companies look to the future. However, E-commerce presents unique challenges, and many companies are forging ahead with caution to avoid experiencing thinner margins than they have as a result of tried-and-true brick and mortar channels.
I sat down with Chuck Coyle, Director of E-Commerce at Idahoan Foods to discuss how this leading fresh-dried mashed potato brand has successfully incorporated E-commerce into its omnichannel strategy. Idahoan kick started its E-commerce efforts back in 2019, navigated uncharted waters during the pandemic, and implemented a number of effective online strategies along the way on a mission to become an E-commerce leader over the course of five years.
Gary Drenik: How did Idahoan Foods get started in the world of E-commerce?
Chuck Coyle: We launched our E-commerce effort in earnest in 2019. Like many brands, we started on ship-to-home services like Amazon and on e-retail platforms such as Instacart. As our presence grew on these channels, we saw a need to create a centralized repository of digital assets and content that we could easily syndicate out to all our partners. This allowed us to have consistent messaging across all platforms, with the opportunity to efficiently scale our business. We focused on the best ways to drive awareness of our brand and intercept consumers during their path to purchase through digital marketing. On March 1, 2020, we took our E-commerce efforts to the next level by launching Idahoan’s first ever direct-to-consumer website.
Drenik: How has the Covid-19 pandemic affected Idahoan’s E-commerce strategy?
Coyle: Across the board, the pandemic accelerated the adoption of E-commerce by four to five years. Changes we expected to occur by 2025 – such as growth of in-store grocery pickup and delivery, consumer adaptation of new technology, and more – are happening now. We had to be nimble and pivot quickly to keep up with new shopping behaviors that have been rapidly emerging over the last 18 months.
At the same time, Idahoan kept a priority on promoting the attributes of the company that set us apart from our competitors: that we offer a convenient side dish made with 100% Real Idaho potatoes, our industry leading relationship with our retail partners, and how we provide a preparation friendly product.
The pandemic caused a significant channel shift for many consumers, with many shifting their buying habits from in-store to online, and it became clear we needed to work to retain our current customers and introduce new consumers to our products.
Drenik: What are the main challenges CPG companies and food brands, face when it comes to E-commerce?
Coyle: The main logistical challenges many CPG companies face are related to shipping, warehousing and generally keeping up with demand in a channel where forecasting can be more unpredictable. At Idahoan, one struggle we overcame after launching our DTC site in March of 2020 was the surge of orders we experienced at the onset of the pandemic. It was lightyears ahead of what we had planned for and initially it put an enormous burden on our warehouse.
However, it was important that we were available for our customers during such an unprecedented time. Everyone from senior leadership to the crews fulfilling orders rallied to ensure shipments were delivered in full and on time, all the while keeping our teams safe. We also leveraged our fantastic relationships with our retail brick-and-mortar partners as they worked to implement new E-commerce strategies. This proved to be an extremely valuable lesson for our team, putting us in a better position to manage demand moving forward.
Drenik: How does Idahoan work to retain current customers as they shift their buying habits to include more online shopping?
Coyle: It’s important we ensure Idahoan products are easily discoverable through keywords and product placements on the sites of our partners, while also reminding consumers of our unique product attributes like our proprietary process and how we use real potatoes in all of our products. Additionally, digital marketing has been a part of Idahoan’s strategy for a long time, and many of our long-term tactics help drive both traditional retail and E-commerce sales. We utilize purchase decision targeted ads and recently implemented a global flavors recipe strategy on social media focused on encouraging consumers to “travel the world” through their tastebuds. We coordinated TikTok challenges last year that drove brand awareness with over 14MM views and a 20% engagement rate, surpassing the industry benchmark. When working with Instagram influencers, we’ve even been able to direct consumers to our DTC site via “Swipe Up” on Stories and links in their bios, and we’ve created unique DTC site coupon codes for these partners’ followers.
Drenik: What are the key elements that make a direct-to-consumer website successful?
Coyle: We look at our DTC site as a chance to engage directly with our consumers and to surprise and delight them. We do this by shipping the majority of our orders the same day using 2-day shipping. We always include additional goodies like stickers, recipe cards and a note from our CEO. We now also offer a build-your-own variety pack, so consumers can order any 12 of our Idahoan Flavored Mashed Potatoes in the assortment they like best, an opportunity that is unique to E-commerce. Any of our products can even be ordered as a subscription, where consumers have them delivered on a regular basis, at a discount with free shipping.
Drenik: What steps has Idahoan taken to optimize its E-commerce strategies each year?
Coyle: In 2019, we were just getting our feet wet, but we had an amazing year as we worked to expand our presence on ship-to-home services and E-retail platforms. Launching our DTC site was a major milestone in 2020, and the pandemic accelerated the process in ways we never expected. Additionally, thanks to our B2B functionality in our E-commerce store we can now make our foodservice products available to business owners directly.
In 2021, we’ve been focused on growing sales on each of these platforms by raising consumer awareness around our products’ availability through E-commerce channels. With the increased shift towards online grocery, we are ensuring our existing fans include us when they choose to shop via E-commerce channels. But we also have the opportunity to increase our household penetration by engaging with new purchasers of our brand. Looking ahead, that’s how we plan on becoming an industry leader in the grocery E-commerce space.
Drenik: As more and more companies look to embrace online selling strategies, thank you, Chuck, for your insights on what has made Idahoan’s E-commerce efforts successful.