The Specialty Food Association has refunded or extended credit for future Fancy Food Shows to the vast majority of its Summer Fancy Food Show exhibitors (81 percent) a month after announcing that the show, which had been scheduled for June 28-30, would not take place as planned due to COVID-19-related events outside of its control.
“We knew that our members would have problems with cash flow and liquidity so we immediately moved our organization around to plan for the refund issuing process so that it would be very fast,” said SFA President Phil Kafarakis, who noted that the majority of exhibitors sought refunds as opposed to show credit. “We made it clear that we would honor their spot in a future show and there wouldn’t be changes with priority points and no one would be penalized for opting for a refund.”
The SFA launched an extensive outreach campaign and established a Refund Center on specialtyfood.com where show exhibitors and attendees could initiate a refund or credit, when it made its show cancellation announcement on April 13. Once an exhibitor indicates its preference for a refund or credit, they receive a phone call from someone on the membership team acknowledging their request. A second call is placed to exhibitors once the refund or credit has been issued electronically or when their check has been mailed.
"The exhibitors who we've heard from so far received a call from SFA staff within hours of their request and in most cases their credit or refund was processed within a few days," said Bill Lynch, SFA’s vice president, engagement & experience.
Business Continuity, Risk Mitigation
The SFA has also provided relief by launching two free webinar series focused on helping industry stakeholders navigate business disruptions during the pandemic. “We started with our Ask the Expert: Business Continuity and Risk Mitigation Planning series since we realized that a lot of members would be having challenges with business activities,” said Ron Tanner, SFA vice president of education, government and industry relations.
More than a dozen free webinars focusing on topics such as CARES Act Grants and Loans for Small Businesses, Relief During COVID-19: SBA Programs that Can Help, and Insurance Considerations Related to the Pandemic, have been presented as part of the series.
A second series, called Working with Buyers: Rise to the COVID-19 Challenge, has featured weekly presentations and Q&As with buyers from retailers such as Di Bruno Bros., The Fresh Market, Kings Food Markets, and Zingerman’s. “Those are really letting members know what’s going on, what’s selling, how they’re stocking shelves, how they’re caring for employees, and if they’re still looking for new products,” Tanner said.
The SFA is also developing plans for a virtual event for late summer/early fall 2020 that will focus on product categories and buyer and member engagement.
Show Cancellation
These activities followed an exhaustive decision-making process that ultimately led to the cancellation of the Summer Fancy Food Show, a first in the Association’s 68-year history. The SFA kept in close contact with the show venue, the Jacob Javits Convention Center in New York City, as the area became a COVID-19 hotspot and the exhibit floor of the Javits was converted into a makeshift hospital, in late March.
The SFA has a good relationship with Javits’ leadership and was receiving weekly updates about its activities, but, according to Lynch, even as it was transitioning into a hospital, it wasn’t given any indication by city, state, and federal agencies, about how long it would be occupied in that capacity.
“We were getting to the point where our community was starting to ask if the show was happening or not and we couldn’t give them a decisive answer,” said Lynch. “We found that other food-related shows were informing their communities about cancellations without ample time for them to change plans and save them from losing their investments. We wanted to handle things much differently, so we set a 12-weeks-out target to get an answer out to our community.”
As that deadline approached, Javits' leadership explored the possibility of moving events to the back half of the year but maintained that it could not release the SFA from its show contract.
“We found that for a show our size that occupies the entire center for almost 10 days, it’d be almost impossible to move it to another date,” said Lynch. “Javits was great in trying to maneuver customers to accommodate us but at the end of the day we didn’t feel it would be right for our members.”
The SFA explored the financial implications of the show’s cancellation, including excusing its contractual show obligations due to a force majeure clause, but was told it couldn’t be excused from its liability since there was no government order in place, explained Kafarakis. At the same time, the SFA sought assurances from its insurance provider that its coverage would be honored in the event the show was cancelled. SFA continues to work collaboratively with the insurance company on the claim.
“We were really working to protect the solvency of the Association,” Kafarakis said.
Maintaining Fiscal Health
The SFA’s financial reserves are strong after a 10-year bull market, but it wouldn’t be prudent to rely solely on those funds to refund exhibitors, given the rocky economic climate, said Irene Math, SFA treasurer and senior vice president of finance & strategy. Boding in the Association's favor is the fact that “we have event cancellation insurance and an infectious disease rider on top of that,” which is somewhat rare, Math said.
SFA took steps with its financial advisors from Raymond James to help balance a need for cash and prudence with the reserve given that it anticipates the insurance claims process will take months. “This mitigates our risk and allows us to maintain our fiscal health,” said Kafarakis.
Additional cost savings measures have also been implemented. SFA has, for instance, put recruiting efforts for 10 new positions on hold; eliminated temps and contractors where feasible; and reduced budgeted operating expenses, revenue-based bonus expenses, and its discretionary 401(k) contribution. In addition, members of its executive team will take a pay cut and board of director fees have been reduced.
“After taking these steps, we wanted to wait as long as possible before making some painful decisions around choosing between potential staff reductions and/or a furlough plan. Both were being considered, ” Kafarakis said.
While it was a last resort, the SFA, which is not eligible for the Paycheck Protection Program, placed about 30 percent of its employees on a 90-day work furlough, earlier this week.
“We’re going to offer as much support as we can during the furlough by covering medical, dental, and vision insurance and the hope is that 90 days later, we’ll get these folks back,” said Lisa Gauchey, SFA vice president of human resources.
Sofi Awards
The pandemic has also forced the postponement of judging for the Specialty Food Association’s sofi Awards, which were scheduled to take place March 23 through April 3. Tentative new dates for the sofi judging are July 27 through August 7.
Since February, thousands of specialty food products had been arriving at the Food Innovation Center at Rutgers University in Bridgeton, N.J., in preparation for the judging, leaving a large assortment of perishable delicacies needing a home.
Thanks to the generosity of the participating companies who entered products to be judged, FIC and the SFA collaborated to ensure that those perishable foods have been donated to feed local area residents.
“Our members are dedicated to combating hunger and food waste. It is comforting to know that they are making a real difference to the local community in need,” said Tanner.
FIC and SFA collaborated with Gateway Community Action Partnership, a local nonprofit, which received the donated specialty foods that included breads and tortillas, coffees and teas, a wide variety of cheeses, dips, yogurt, honey, soups, snacks, chocolates, and specialty candies.
“We are grateful to have these truly special foods to provide to our community, especially at this time where our residents are at a greater need than we have seen in recent months,” added Marcus Weaver, director of agriculture and food initiatives for Gateway Community Action Partnership.
Earlier this year, the SFA selected FIC as the new host location for the 2020 sofi Awards, which have been held annually since 1972 to recognize innovation and remarkable taste, and to highlight the flavors and the creativity found across the specialty food industry. A prestigious list of buyers, chefs, food writers, and distributors were preparing to arrive at FIC as judges to sample the hundreds of entries and select the gold, silver, bronze, and new product winners for each of the 49 categories.
Margaret Brennan-Tonetta, co-founder of FIC and executive director of economic development and innovation at Rutgers New Jersey Agricultural Experiment Station, said, “Every cloud has a silver lining, and I am so glad that the Food Innovation Center, with the support of the Specialty Food Association and the food company applicants, were are able to bring these delicious foods to our neighbors in Bridgeton during this challenging time.”
Related: SFA, Rutgers Team to Bring Specialty Food to Those in Need; Summer Fancy Food Show Is Canceled.
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