At our Cornwall Innovation Club event: Adapting to Change, Joe Healey, Managing Director (Trading) outlined how the largest independent cyder-maker in Cornwall altered their business model during the recent disruption. Joe called what they’ve done at Healeys Cyder an evolution rather than a revolution but clearly what they have tried and tested over the last few months has had a positive impact on the company’s bottom line.
Healey’s started the year in a strong position, having made good recruitment decisions, plugging gaps and learning from mistakes made in previous years. They had invested in their site by purchasing machinery and improving their on-site visitor experience. New lines were launched and improvements had been made to branding. Overall things were looking rosy in the Healey’s orchard.
Quite early on in the year they began to see the warning signs about the looming pandemic and started thinking about the possible impact on the business. When a £50,000 order was cancelled it really struck home what might lie ahead. What was clear is that the team were thinking ahead from very early on. The benefits of seeing daily figures showed that while demand for on-sales diminished immediately, off-trade sales were increasing. The key was in acting quickly and trying out ‘sprint experiments’ starting with making the most of the vans that had been used pre-lockdown to deliver locally. Through a Facebook post they offered free local delivery for those ordering three+ cases of cider. Demand was high and not because customers were making the most of the free delivery option. 92% of sales were from out of county. The message was clear: people from across the UK wanted to bring Cornwall to their homes.
The demand in off-trade supermarket sales rose and enabled staff to be brought back from furlough to service the markets that clearly existed. However it was a previous employee that was working as a lab technician at a nearby hospital that brought about another key moment. Knowing that there was a distillery at the site, he approached Healey’s to ask if they could produce sanitiser for the hospital who were desperate to find a local source. With little knowledge of what was involved, Healeys worked closely with the hospital and HMRC to produce the necessary goods within four days. It was not cheap to make, yet the company committed that they would produce 100 litres a week completely free of charge and for as long as it was required. With the general public desperate to hear some good news stories, this community-driven decision to help paid off in good will, with the story being covered by various press outlets including BBC Spotlight.
The biggest change to the company’s business model was with their on-site visitor experience. Historically the business model for the visitor centre has been based upon free entry, free sampling and free parking. The free entry gave all visitors limited access to the facilities with the business relying on upselling guided tours and products to make money. The issue was that on rainy days when people couldn’t go to the beach, they would turn up en masse to the site between 10am – 12pm. There were queues everywhere for everything. Although this generated a good income it wasn’t a particularly enjoyable experience for visitors or staff. Obviously with the COVID-restrictions this would have to be addressed. Fortunately digital technology enables immediate changes to an admission model that printed marketing collateral cannot and it was decided to charge an admission price for all visitors, unless the purpose of a visit was solely to purchase products from the shop, in which case people could use an alternative entrance.
Luckily there had already been investment (Pre-COVID) in table-ordering apps that could be used in the restaurant. Instead of restricted access, visitors were given access all areas through a timed system. Even this was changed from an initial trial of 50 people per half hour to a steady stream of 20 every 10 minutes. The site was fully booked throughout the summer, with a greatly improved onsite experience for staff and visitors. There weren’t any queues.
Joe reported that while it was difficult to read some negative reviews on Trip Advisor from people who were used to visiting the site for free and who could not quite get to grips with the idea of paying an admission fee, Healeys are still learning and prepared to adapt their model further, looking at ways to layer on some additional benefits for visitors like a gin experience, cider sensory experience and introducing day tickets alongside the annual pass.
In other areas of the business Healeys are looking at how to maximise on their learning from the changes in demand by recruiting an e-commerce manager along with automating their packaging capabilities. Joe Healey was keen to express how very lucky they have been and recognise that not everyone has been in the same position, including many of their customers.
“We’ve created something which we never dreamed of creating. All we’ve done is evolve. We’ve done nothing revolutionary. We’ve looked at what we’ve got and we’ve tried to work out how else can we use it.”