The COVID-19 pandemic may have actually helped pasture-raised egg company Vital Farms, because it played a role in introducing the brand to new consumers, the company’s CEO said.
Speaking during a quarterly earnings call on November 11, Vital Farms CEO Russell Diez-Canseco said the growing brand may have been unknown to many consumers prior to the pandemic. But when shoppers started panic-buying and stocking up on eggs, many picked up a carton of Vital Farms eggs for the first time. Since then, he said, it appears a meaningful percentage of those first-time buyers are now making repeat purchases.
“If my math’s right, we were able to convert about 20% of those COVID triers at a time when maybe we were one of the few eggs available on the shelf into what looks like potentially loyal customers, which I think is a healthy conversion rate, considering it didn’t involve a lot of marketing spend,” said Diez-Canseco.
While Vital Farms earlier in 2020 completed an initial public offering (IPO) and has identified four key elements to its growth strategy, with increased household penetration and growth in the retail channel as two of those elements.
In addition to gaining new end consumers, Diez-Canseco said the company is also gaining new retail customers, which has been encouraging.
“It’s early days to see how our business is trending in our newest doors, but in terms of kind of our playbook, we’ve got a pretty historically successful playbook around launching in new retailers and ensuring that we get off to a good start. I can’t remember the last time a retailer wasn’t pleased with the results,” he said.
But at the same time, Diez-Canseco said Vital Farms must still give a high level of attention to its longer-term customers.
“We’re having to be a little flexible in terms of the portion of our growth that we see from increased velocities and just general household consumption and in the amount that we see from new doors. So (Vital Farms is) reflecting that, and monitoring that to make sure that we’re striking the right balance between new doors and really taking care of our trusted retail partners,” he said.
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