Strong online presence vital during COVID-19 crisis, CBD firm says

A strong online presence has been essential to resiliency through the COVID-19 pandemic, but many larger offline retail chains have also not changed course because of short-term issues and companies focused on selling through these channels may still see a recovery, according to one CBD company.

March – and the start of the pandemic – saw one of the best months in company history for CBDfx and the firm has continued to see high demand, according to Carlo Buckley, CBDFx’s managing director for Europe.

The firm saw a massive spike in online demand which led to some of the volume being lost from in-store purchases being picked up through online sales. This benefitted CBDfx’s business model to some extent. “But if you had no e-commerce capability then you’d be losing out big-time,” Buckley added.

The shift to online did place pressure on direct-to-consumer fulfilment. Warehouses struggled to cope particularly with the introduction of safety precautions and staff shortages.

But larger retailers did not put plans on hold. There was a slowdown within the health food channel and smaller independent shops suffered as people could not come in and browse. This meant that consumers visiting those that stayed open came with a specific goal in mind for what they were buying, and as a result trying new products fell.

Health food stores turned focus onto things like immune boosters, while they and drug stores also focused core lines such as sanitisers and supplements where significant demand remained.

Throughout though, chains kept an eye on the future and some product launches went ahead. For example, CBDfx was able to roll out CBD footcare products into the UK Superdrug pharmacy chain during the pandemic despite some delays and some stores closed due to guidelines (those located within shopping malls, for example.)


‘Plenty of contingency’


Retailers have kept the future in mind and continued to look for points of differentiation – something that CBD products could provide, Buckley said. “We will [continue to be] in very advanced discussions over the next few weeks and months,” he added. “None of the retailers are putting plans on hold due to COVID-19.”

As well as warehousing provision, there were issues with supply chain and importation, but planning and contingency options helped alleviate issues. Dealing with shortfalls was partly down to giving lead times to ensure imported supply. The company initially did not have any delays in terms of clearance or air cargo and if any were to occur – having a bit of extra inventory on hand should be enough to deal with a day or two of waiting, Buckley said.

“Packaging has been a little slower than usual – partly due to COVID. Some does come from China which has led to some issues. But wherever we had issues we changed to domestic suppliers,” he added. “Some of our manufacturing partners have faced issues due to staffing and things like that. But nothing has been business critical really. There’s been plenty of contingency.”

The company sees the same situation likely to continue going forward. As a result, it is proceeding with a novel food application in the UK as per normal. “We don’t envisage any pushing back of the 31st March 2021 deadline [for a validated novel food application to be with the UK Food Standards Agency (FSA) in order for products to remain on market],” Buckley said. “We think the FSA will stick to that. From our side, that’s completely reasonable. Everyone’s had a long enough time to prepare.”

Buckley also does not anticipate COVID-19 leading to much delay in the processing of applications in either Europe or the UK. “Everyone’s seemingly adapting pretty well to remote working. It’s probably the case at EFSA and the FSA as well,” Buckley said. “And as government institutions are unlikely to face job cuts or those sorts of things – from that perspective they should have capacity – so time frames will remain the same. There’s no real excuse for not getting the dossier in before the deadline really.”


What This Means: It has proven vital for CBD companies, as many other companies in general, to maintain a strong online presence throughout the global pandemic. The industry’s resilience has been shown by the number of offline retail chains managing to keep their head above water by utilising this channel more often.

Although there have been obvious barriers such as supply chain and importation issues along the way, CBDfx is proof that with careful planning and contingency, it is possible to weather the storm and continue to grow and develop products and strategies.

 Freddie Dawson CBD-Intel staff

Photo: CBDfx

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