Companies who are helping out their communities could score a long-term payoff.
*I wrote this story towards the beginning of the pandemic in 2020, but I wanted to publish it and tell the stories of those who helped out. So, there may be references and dates from things that have already happened*
Scott Bush was on spring break with his family in Florida when the outbreak really started hitting the U.S. He saw the news reports like the rest of us. The store shelves were emptying out. The toilet paper disappeared. Hand sanitizer was being treated like gold. Demand skyrocketed past supply. Grocery stores to pharmacies; it was sold out everywhere.
But unlike a lot of people, Bush was in a position to help. He’s the owner of a distillery in Des Moines, Iowa, called the Foundry Distilling Co., where they make a variety of high-proof alcohols. He called up his distiller Greg Biagi, and with his degree in chemistry, asked, “Can we do this? Can we help?”
The active ingredient in hand sanitizer, Bush says, is high-proof alcohol, something they make every day. Once Biagi figured out the chemical formula to make it, they began production. On their first weekend they gave away 2000 12 oz bottles of hand sanitizer to their community. Like a factory line, paid volunteers came in to help bottle, cap, label and package the sanitizer. Eventually, with FDA approval, they started making enough to sell 8.5 oz bottles to Fareway grocery stores all over Iowa.
“We call ourselves Des Moines’s distillery.” Bush said. “We just thought it was the right thing to do.”
He’s not alone.
The profit of helping
Businesses all over are hurting. From corporate conglomerates like Starbucks to small businesses like the Foundry Distilling Co.,profits are not where they were even a few weeks ago. Despite these financial troubles, companies are stepping up where they can. From making hand sanitizer to giving essential workers better employee benefits, they are doing what they can to make a terrible situation better for those who need it.
And those acts of kindness might just be a smart business move. They associate empathy with their brands. Now it may not seem like it at the moment—having already binged all the good Netflix shows—that this isn’t going to end anytime soon. But it will end, and when it does, what is going to be the payoff for those companies that stepped up? Could it mean the very survival of some small businesses?
In a press release regarding a study done by the U.S Chamber of Commerce early May 2020, 24 percent of small businesses have already shut down temporarily and 40 percent say they will within the next two weeks. With congress passing the CARES act, the largest economic relief bill in U.S. history, $2.2 trillion will be allocated to businesses and individuals affected by the pandemic. While this could help stave off permanent closures and bankruptcy for some, no one knows exactly how long this pandemic will last.
Stepping-up and helping the community could give businesses that extra bit of income they need. “Some entrepreneurs have been able to adjust and see new opportunities to serve the market,” said Michael Goldberg, Professor of Innovation and Design at Case Western Reserve University.
For five weekends now Bush has been giving away free hand sanitizer to members of his community. “People ask to pay, and we say no,” Bush said. “But if they want to buy a bottle of spirits they sure can.” And that’s exactly what they’ve been doing. Their company has been lucky, Bush says, making the financial net effect normal. But he stresses this is not why they did it. It was something they knew they needed to do. Turns out Karma’s out there.
Big corporations step up
Bigger corporations have also stepped up. Walmart, along with other grocers, has instituted a senior-only hour. McDonald’s franchisees are offering free meals for medical professionals and Happy Meals to children who need breakfast and lunch.
Even Starbucks is actively taking steps to help those the company affects. CEO of Starbucks, Kevin Johnson, said in a press release March 18, 2020, “We are a resilient and enduring company by staying true to our Mission and Values with a purpose that goes beyond the pursuit of profit.” A big statement for a big corporation.
But they have held true. The company has instituted paid sick leave, catastrophe pay and a new mental health benefit that gives employees 20 free therapy sessions. They have also donated $13 million to relief efforts under the Starbucks name. It’s safe to say they’re doing their part where they can. But how is this going to benefit them later on, when things start going back to a new normal?
Goldberg mentions the term corporate social responsibility, saying that when companies are seen as good members of the community and responsive to crises like this, customers want to support those businesses. “Corporate responsibility is also good business,” Goldberg said.
This rings true when we see people buying spirits from the Foundry Distilling Co. or still using the drive-thru at their local Starbucks. Even when this eventually ends, customers will remember what those companies did, creating more brand loyalty as a result.
Small business outreach
For Tanya Fleisher and Roy Katz, making masks was not a part of this year’s business plan. Neither was having to layoff their employees at their Denver based business, Winter Sessions. Normally their website boasts bags, backpacks, wallets and other goods made from wax canvas and vegetable tan leather. But six weeks ago they started crafting masks out of materials leftover in their shop.
“We did some research to find out which types of masks are being accepted at local hospitals and medical facilities and choose one of those designs,” Katz said. “Then we started asking for volunteers.”
Since sending out their newsletter asking for volunteers (this was March 2020), 200 people have signed up to help make and distribute these masks. The operation started off as a strict donation until the leftover material ran out. The same day the CDC announced their recommendation for everyone to wear masks, Fleisher and Katz put their own masks online.
“That first week is when we realized there were two different groups of people that needed masks,” Fleisher said. “One was people who needed them quickly for protection and that we would want to donate, as well as the general public who wanted them for personal use.”
Wanting to keep these separate, they teamed up with a friend and blogger to start a non-profit called Cover-Up Colorado. This helped organize the mass donation process from their buy-one-give-one promotion. For every mask bought online, another one will be donated to an essential care worker. Masks bought online are made in their shop whereas the ones donated are packaged into kits and sent to volunteers to sew.
Since launching, they’ve been able to hire back two of their employees and donated somewhere between 3000 to 4000 masks to small medical facilities and those that need them.
Competing for loyalty
All this short-term do-gooding might have some significant long-term payoffs. Jennifer Konfrst, Professor of Public Relations at Drake University, says corporations are trying to accomplish what small businesses survive off of: continued customer loyalty. Right now, it’s all about how to separate themselves from other corporations. Who is doing the most to care for their employees and their customers? “Brands should do more than just sell,” Konfrst said.
Real authentic action, not just communicating. According to Konfrst, this pandemic has really amplified those businesses that already had a good corporate social responsibility policy prior to the crisis. Now they get to show it. For those businesses like Starbucks that are doing what they can, it will pay off later when the economy starts to open again and the market becomes highly competitive. “Customers will remember that,” Konfrst said.. “Brands they felt were there for them, they’ll want to reward those.” That’s going to be their competitive edge when it comes to picking up sales later on.
For those businesses who have yet to take any actions, people will notice that too. “Doing the right thing is often the smart business plan,” Konfrst said. She mentions insurance companies reducing their customers rates. This makes sense from a business standpoint because the risk from driving has gone down with fewer people on the road. But this also sends a message to their customers “we care about you,” and “we understand where you’re coming from.” Simply sending an email about your company’s plans on navigating the virus is not going to cut it.
Small businesses and corporations have it different when it comes to customer expectations. Often people don’t expect small businesses to step-up because they know most don’t have enough finances to do that. So, when a smaller business can stand-up and help out their community, it could make a bigger impact. Because they’re smaller, they’re better at connecting with their customers on a more personal level.
“The roles that small businesses are playing in our communities, generally speaking, are being rewarded now by customer loyalty,” Konfrst said .
But the key, Konfrst says, regardless of the company’s size, is to respond. “Responding slowly is different than not responding at all,” Konfrst said . Companies can be forgiven for being late to the game if they are still doing what they can to help. But if they fail to do anything, their customers will remember that. Konfrst brought up the problems we’ve seen with outbreaks in the meatpacking industry.
On April 20, a Bloomberg article came out about JBS—the world’s top meat company. Due to an outbreak among its employees, they had to shut down a pork processing plant in Minnesota. A week before, Smithfield Foods Inc. had to shut down a slaughterhouse in South Dakota. Worker deaths due to the virus were reported at a Tyson Plant in Iowa, a poultry plant in Georgia and at a Cargill Inc. plant in Colorado.
As a brand, the decisions that the packing plants are making should matter. People may see what happened with these outbreaks and think—well, what else aren’t they taking seriously? They could start to distrust the brand and associate a negative connotation with it. This is dangerous. Brands are the foundations where purchases are made by consumers, according to Konfrst.
“Reward organizations you think are treating their employees well. Reward organizations you feel are giving back to this pandemic. Reward organizations that understand the severity of the situation and are putting customers and employees first,” Konfrst said.
It’s not all strategy
It’s important to remember that profit is not always the No. 1 motivator, although it helps. Sometimes it’s just wanting to show kindness. Greg Biagi, the distiller at the Foundry Distilling Co., talked about an emotional encounter he had with a gentleman during their first weekend giving out hand sanitizer. The man had walked up to Biagi and told him he hadn’t been able to find any hand sanitizer within 200 miles of his location in Sioux Falls, IA.
“It really took me off guard given the whole gravity of the situation,” Biagi said. “If I wasn’t working here, I wouldn’t have had the opportunity to have it either. It certainly made it (what they were doing) more emotional.” He loves being able to give it out for free to those who know the brand and those that don’t—hoping they will come back during a later time when it doesn’t feel like “the world is ending.”
The atmosphere of the distillery, Biagi says, was a bit “hectic”. The day of the interview they were distilling on site—full-blast bottling with all the paid volunteers, while trying to produce the hand sanitizer at the same time. They were gearing up for their last weekend making hand sanitizer, meaning the end of production. It also meant a break for all the employees and volunteers, pushing out high volumes of product for five weeks straight.
Bush felt good about what they had done, but knows they aren’t built for this long-term. He hopes they gave bigger producers time to ramp-up production on their end and get it to those who need it.
“Emotionally, it’s every bit reassuring that we’re able to help folks, that it makes the exhaustion worthwhile,” Biagi said.