Insights
Pandemic Pivots: Lollicup USA Becomes Mask Supplier
By Daisy Lin
How small businesses are reworking business models to meet pandemic needs and build trust
The COVID-19 outbreak has turned the business landscape upside down. A new Small Business Majority survey shows that one-in-three small businesses in the U.S. have closed and 40 percent have laid off workers permanently. Stock markets have plunged around the world, and the ability for business leaders to make creative pivots quickly can mean the difference between sinking or swimming.
Big retailers like Nike and Gap have shifted production in order to make masks; cosmetics companies like L’Oréal and Estée Lauder have turned their facilities into production sites for hand sanitizer, while automakers have revamped factories to produce ventilators.
These kinds of conversions are beneficial, says Laura Beken, a business consultant at SBDC Tech, who advises entrepreneurs and tech startups on strategy and innovation. “You're helping others, and at the same time you build awareness about your own business.”
Likewise, small and mid-sized companies are also pivoting to meet pandemic needs, serve clients and enter new industries.
Lollicup USA CEO Alan Yu is no stranger to pivots. His California-based company started out as a single boba shop, grew into a chain of boba shops, diversified into wholesale of boba ingredients, then expanded to manufacturing of cups and packaging for restaurants across the country. Now he has added one more role: mask supplier.
“You’ve got to be a one-stop shop,” Yu says. “Right now, my thought is to get as many masks out there as we can, and help as many people as possible.”
Thinking ahead
When COVID-19 hit China in January, Yu explored the feasibility of manufacturing masks from his factories but couldn’t find the proper raw materials. Then the virus spread to the United States, and he immediately began working with reopened Chinese factories to produce and import masks.
“We have stock every day, flying in from China. Then we ship it immediately. Our policy is within 72 hours—a lot of times 24 hours—shipping,” Yu says.
In the past few weeks, Lollicup USA shipped over 5 million masks. “Right now we’re using air cargo to import masks, but once the ocean freight starts coming, we’ll lower the price even more,” Yu says. “We want to beat the price down so that other people won’t be able to price gouge.”
“Right now my thought is to get as many masks out there as we can, and help as many people as possible.”
Not only is he able to supply masks at a reasonable cost to outfit restaurants, hospitals and workers in a multitude of industries, he is also donating masks to emergency responders.
“We’re going to donate 10,000 masks to the City of Chino police and fire departments, because they couldn’t find masks,” Yu says.
Strategic customer outreach and building trust
When pivoting, keep in mind that one of the areas that’s important for business owners right now is building trust with customers, according to Laura Bechard, who heads ProVision Business Advisors. “Businesses that have been competing on price are going to find that customers are more concerned now about trust and safety. Make sure that your marketing messages and your communications are built around trust and safety.”
Julienne Fine Food and Celebrations in San Marino, California turned their restaurant and gourmet market into a local grocery store to service the local community. In addition to prepared meals, they stocked the shelves with eggs, flour, produce, even toilet paper. In addition, owner Julie Campoy posts updates on social media about the safety measures that the restaurant has taken, by staggering staff hours, and spacing work stations in the kitchen 7-10 feet apart to accommodate both food production and safety.
“I man the door, every day, all day allowing only two people in at a time for appropriate social distancing,” Campoy says.
When pivoting, keep in mind that one of the areas that’s important for business owners right now is building trust with customers.
Beken also suggests using this time to build relationships and do some strategic public relations and customer outreach. For example, drone company Sensofly began offering free drone services to companies and public agencies in Southern California that are affected by COVID-19.
“One of my good friends is an inspector, and using the drones would be good to get a lot of photos of roofs, so that there’s one less person to interact with to go up there,” says Han John Tse, founder of Sensofly. “For realtors, you can scout out a location, and for virtual tours, you can get a big picture of what the neighborhood looks like.”
“You have a window of opportunity right now to reach customers that you were not able to reach before,” Beken says. “There will be customer segments that will be willing to talk to you, whereas before they would not open the door.”