How They Keep the Flavored Water and Veggie Burgers Coming

Dr. Praeger’s Purely Sensible Foods, a privately held maker of veggie burgers and meat alternatives based in New Jersey, saw the crisis swelling in the New York region in mid-March. Seeking to stay ahead of it, Larry Praeger, a co-founder and the chief executive, took a series of swift actions that prioritized sanitation and social distancing in the company’s factory.

In San Francisco, Hint Water was facing its own challenges. Though the company’s automated manufacturing facilities were less vulnerable to disruption, Hint had to figure out what to do with its employees who usually spend their days handing out samples at grocery stores and events. Kara Goldin, the Hint founder and chief executive, redeployed those staff members, and has managed to avoid layoffs. Both Dr. Praeger’s and Hint are now hiring.

This conversation, which was condensed and edited for clarity, was part of a series of new live Corner Office calls discussing the crisis. Visit to join upcoming calls.

DAVID GELLES Kara, when was it that you realized this was going to be something that disrupted your business in pretty fundamental ways, and what steps did you start taking to adjust?

KARA GOLDIN On March 13, I flew to San Francisco and stopped in a local store on my way home. I noticed that their supply of Hint had been depleted. While I had heard about hoarding starting and people were really stocking up, I really hadn’t pieced together the effect that that would have on our own brand. At that point, I reached out to our sales team and our supply chain and basically said, “I don’t know what’s going on, but I’ve now stopped into a second store just to see, and it’s a consistent pattern. We’re either very low or out of stock on a bunch of our flavors.”

That weekend, we were pretty quick to reach out to our grocery buyers throughout the country and say, “Hey, if we are out of stock and there’s some sort of hiccup in your supply chain, or you guys are inundated with doing a lot of other stuff right now, we’re more than willing to jump in and send trucks in direct to you.” And many of them actually jumped on that, just to be able to stock their shelves.

GELLES Larry, right around the same time, you also started to recognize that this was going to have an impact. Your company is based in New Jersey, and you took pretty dramatic action quite early. What did you do to try to stay ahead of this?

LARRY PRAEGER Our manufacturing facility is based out of northern New Jersey, and we were having similar discussions about what we needed to do. A priority was really to make sure that we had a safe working environment for all our factory workers, as well as the people that were in the office. So around March 18, we did take a bit of a drastic step and closed down our factory for four days.

That was to try to do a heavy sanitizing of the building and the manufacturing facility, but also to give us some time to really come up with a plan so that, when we reopened, we could bring back our factory workers and feel safe about doing it. Now we’re taking temperatures when people enter the facility, we’re providing masks and gloves for all the employees, we’ve increased the cleaning in the factory, we have heavy sanitation in high-touch areas, and we’ve added space in the break and lunchroom spaces, and set up some satellite break and lunchroom spaces.

The one thing that we really wanted to instill in the employees was to make sure that they understood that if they weren’t feeling well, they should not come into work, and their job wasn’t in jeopardy. The most important thing, as a first line of defense, was to have them not come to work. If people aren’t coming to work sick, then you have less to worry about in your facility.

GELLES Kara, you have manufacturing lines in the United States as well. What changes did you make, if any?

GOLDIN We have multiple bottling facilities throughout the U.S., and we were actually very well set up. We pasteurize our product because we’re not using preservatives, and the actual location where it’s being filled is a clean room, so there’s no people in there when it’s going through the process of killing any microbes. So there has not been a dramatic change in the way that we’re filling.

GELLES Larry, despite the precautions you took, at least four of your employees have tested positive for the virus, including some who worked inside your factory. What happens when factory workers at a food company test positive for this virus? What steps have you taken to ensure that their illness didn’t become a problem for the business?

PRAEGER We’ve had about four or five cases. Those people are quarantining at home for 14 days. And we’ve actually had one person who’s come back since then. They saw a doctor and have a doctor’s note that confirms that they’re OK.

GELLES Has this caused any disruptions to your manufacturing?

PRAEGER It’s definitely slowed down some of the manufacturing. In addition to the confirmed cases, we probably have another about 12 to 15 cases where people have had symptoms and they’ve stayed home because of that, or because they have no child care. It’s definitely a challenge. We’re definitely not running as efficiently as we used to be. But that’s OK, as long as it’s a safe environment.

GELLES Kara, Hint employs a large marketing team that goes to events and in stores to hand out s
amples. What are they doing in the midst of all this?

GOLDIN We have about 200 people in the company, and that same weekend in March, we decided that it probably wasn’t a great idea to have our team handing out sample cups. I don’t know how you can stay six feet apart in that case. So we decided to reallocate those people into sales and other roles, and we haven’t furloughed or laid anybody off.

GELLES Larry, did Dr. Praeger’s see a spike in demand as people stocked up? If so, were you able to meet it?

PRAEGER Starting in March, we saw a big uptick in purchases at the retail level, supermarket level and club channel level. It was across the board, from veggie burgers to chickenless tenders to products for kids. We’ve seen that come down a little bit in April. But our food service division, which is mostly selling to restaurants and hotels, has seen a huge decline. In March, we saw it head way down, and now we’re seeing probably close to 70 percent decline in comparison to the prior year.

GELLES Kara, people haven’t hoarded flavored water in quite the same way they have hoarded toilet paper, but what have you seen on the demand side?

GOLDIN The good news for the business was the hoarding, to some extent, in the grocery businesses and really stocking up on Hint. We’ve seen that start to slow in retail stores, but we’ve actually seen it pick up in other areas that we know where people are going into stores, including Instacart. And our direct-to-consumer business, which is and Amazon, has gone up a crazy amount. I mean over 100 percent. In times like these, it’s really about convenience and what the customer wants to do.

GELLES Larry, you have a complex supply chain, with lots of different ingredients, the need for cold storage and shipping all around the country. What disruptions have you seen to your supply chain, be it on the materials side or on the delivery?

PRAEGER We’re seeing costs going up on vegetables because people in the farms are not working as well, or there are a limited amount of people. And the freight prices coming in have been increasing. But the supply chain over all, so far, has been pretty steady.

GELLES What advice would you give to someone who’s currently looking for a job?

GOLDIN You should work for companies that you’re really passionate about, that you really believe are doing things that you want to be doing every single day. I’ve talked to a few people that I know that, before, were just working for companies that they didn’t necessarily believe in or enjoy, and they got furloughed. Now they’re looking at it as another chance to just go and try and figure things out. So, if that’s you in this situation, try and figure out, “What is the perfect thing that I want to be doing? What company do I want to support to really go and be that company that I want to invest in?” Maybe you started moving up in that company, getting paid too much money, whatever it is, and now this is an opportunity to go and reset a little bit.

GELLES When this is over, what’s the biggest change that you’ll be making at your companies?

PRAEGER The biggest change will definitely be moving more toward some of this distancing that we’ve done in the factory. It would have been a benefit to really come into the crisis having those kinds of systems set up.

GOLDIN We had already set up for direct-to-consumer and Amazon and some of these other services. But as we see consumers’ habits changing, we will be looking at growing those businesses, working closer with an Instacart and just making it faster, quicker and easier for the consumer to get our product.

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