KANSAS CITY — The first blow for many food entrepreneurs was dealt in early March, when the coronavirus’s emergence stateside led to the cancellation of Natural Products Expo West, a so-called Super Bowl for the natural and specialty foods industry. Among the 3,600 expected exhibitors, many startups had invested thousands of dollars to participate in the event, hoping to gain exposure and establish relationships with retailers, investors and other key business contacts. 

In the weeks that followed, the coronavirus and the illness it causes (COVID-19) triggered a tidal wave of additional unforeseen challenges for emerging brands, including supply chain disruptions, staff layoffs, stay-at-home orders and store closings. Founders are now forced to pivot and adapt.

“I am tremendously empathetic to entrepreneurs; this is not only their passion, but it’s also their lifeblood,” said Wayne Wu, general partner at VMG Partners, San Francisco. “(Early-stage businesses should consider) how can they be supportive of their team? How can they shore up their supply chains? How can they hunker down from a liquidity standpoint to ensure they get through to the other side?”

Brands that typically rely on in-store tastings are assessing new strategies. Those who planned to expand distribution into new channels or launch new products in stores are reevaluating their options and leaning into online retail.

Beyond Better Foods, Inc., the New York-based maker of Enlightened ice cream and Bada Bean Bada Boom snacks, is delaying its innovation plans in the short term to ensure it has adequate inventory on hand, said Michael Shoretz, founder and chief executive officer.

Michael Shoretz, founder and CEO of Beyond Better Foods

“We're trying to stay as nimble as possible and adjust forecasts on a much more frequent basis as we adapt to this new reality,” Mr. Shoretz said. “We're listening closely and anticipating the needs of our customers and retail partners.”

Beyond Better Foods has expanded the assortment of products it sells online. The company also pledged to donate half of the profits from its website to Feeding America’s COVID-19 Response Fund.

“Frequent communication is key in an unprecedented time like this,” Mr. Shoretz said. “Frequently communicate with your partners, employees and customers.”

Christopher Hunter, co-founder and CEO of Koia, a Los Angeles-based brand of plant protein beverages, said the emergence and spread of COVID-19 has prompted management to reevaluate all aspects of the business and adjust to new short- and long-term realities.

“As an example, field marketing has historically been the top driver of trial and conversion for Koia,” Mr. Hunter said. “Obviously, that avenue is now off the table.  However, we have quickly redeployed our field marketing team and budget to assist in the increased digital marketing activity and retail delivery options.”

Supply chain is another area of concern for the company, he said.

Christopher Hunter, co-founder and CEO of Koia

“This has caused us to assess all of our current supplier partnerships, look for potential issues areas, establish redundancies to ensure a seamless supply of product, and increase our inventory on some key items,” Mr. Hunter said.

The founders of Three Wishes, a New York based brand of grain-free, high-protein cereal, increased production as COVID-19 swept into the United States. Rather than ordering inventory for two months, the company purchased enough product for five months, a calculated risk based on discussions with health experts, doctors and suppliers.

“Since shelf-stable products are currently in high demand, we’ve been fortunate enough to see an increase in sales,” said Margaret Wishingrad, co-founder. “However, COVID-19 has presented us with some challenges as a new brand. It has been much harder to keep product on the shelf, as manpower to restock product has been limited. In addition, some of our exciting launches in nationwide retailers have been delayed due to the spread of the virus.”

While many early-stage businesses are struggling to stay afloat, brands that are positioned around health and wellness may have an advantage, in spite of the financial repercussions created by the pandemic. Cost-conscious consumers typically reduce restaurant visits or purchases of durable goods, but many will continue to pay more for a better-for-you food or beverage product, Mr. Wu said.

“What we saw during the 2008 financial crisis … for many, not all, the premium of that better-for-you, clean label food or beverage or personal care item was still worth it to (consumers),” Mr. Wu said. “Maybe they would change where they bought their clothes or shoes, but they still continued to prioritize their own well-being and health … and I feel like that is going to happen this time as well.”

Wayne Wu, general partner at VMG Partners

Founded in 2005, VMG Partners supports mission-driven companies that produce better-for-you food, beverage and personal care products. Brands include Bare Snacks, Justin’s, Kind Healthy Snacks, Perfect Snacks, Pirate Brands, Popchips and others.

“Our firm was built during the most formative years of the financial crisis, so we were working with our brands and entrepreneurs to navigate that difficult time, and we’re very much in business today in terms of supporting the broader ecosystem of entrepreneurs, our own companies and continue to be open to supporting new companies and brands into our VMG family,” Mr. Wu said. “With uncertainty always comes a less liquid market, whether it be in the public or private markets, whether it’s equity or debt, there’s just generally less liquidity available on a broader scale. But for those that are highly qualified brands and companies, there’s capital available yesterday, today and tomorrow.”

Following the cancellation of Expo West, many companies offered services or discounts to support small brands that may have been hit the hardest by the turn of events. Retail buyers have offered to receive pitches and schedule meetings with exhibitors. Several businesses offered to help dismantle booth displays and buy or distribute samples already shipped to the convention center. The support and knowledge sharing within the startup and small business community has continued in the weeks since.

“Despite some global challenges I think there’s always nuggets of positivity, of seeing how people come together during challenging times,” Mr. Wu said. “That’s one of the things I love most about this industry. Even before this crisis, just how supportive everybody is of each other and that everybody is trying to move toward this greater good of helping consumers put healthier products in and on their bodies, how to share knowledge with each other to help avoid certain pain points along the way.

“Folks are coming together to share real-time knowledge right now in navigating a very uncertain time, whether it be on the front end in terms of how to work with retailers while they’re overwhelmed, to back-end dynamics of keeping supply chain going, and how to navigate all the governmental programs that thankfully are coming out daily from state and federal authorities to support entrepreneurs, small businesses and employees and their families with children at home while they try to navigate how to put food on the table.”