What are your biggest business concerns surrounding COVID-19?
My biggest concern, overall, is the tremendous human toll this pandemic is taking on us all physically, emotionally, and economically. More specifically as it relates to CAVU, I’m concerned about the stress on our entrepreneurs and their teams as they seek to navigate this perpetually changing business environment while at the same time keeping themselves and loved ones healthy—all while juggling work-from-home and shelter in place dynamics.
From the beginning, we advised portfolio executives to reassess their annual plans, consider strategic and operational pivots and lean into their ecommerce channels.
Fortunately, we primarily invest in better-for-you foods and beverages, which many consumers are seeking today for their health and functional benefits. On the flip side, we’ve also invested in some better-for-you retail outlets which are obviously struggling more right now, so we’re seeing both sides of the equation. Regardless, the biggest change to our business involves our level of daily involvement with our partner brands. We’ve always been active investors—in fact, one of the factors we look for in potential investments is the opportunity to add significant value—but coronavirus has taken our involvement to a new level. Quarterly board meetings have been replaced by monthly and sometimes weekly meetings, and we’re speaking to portfolio executives daily. From helping them shift business strategy to advising them on the new stimulus bill, it’s never been a busier time.
What is your current business strategy for dealing with the situation?
From the beginning, we advised portfolio executives to reassess their annual plans, consider strategic and operational pivots and lean into their ecommerce channels. That strategy has proven to be on point, but the details are changing daily. Among each portfolio company the business environment is changing so quickly that each week is like a year. It’s our role as their advisors to help them navigate and make the most of this turbulent time.
How do you think things will look in your industry a year from now?
Online food and beverage shopping has long been the wave of the future, but this pandemic has expedited the evolution exponentially. This shift in consumer purchasing behavior will become permanent as convenient home-based shopping becomes a new norm. CPG brands unable to shift to multi-channel commerce through online sales (be it their own website or Amazon) in addition to grocery and big box stores will struggle for share of stomach.
Furthermore, this pandemic is bringing health and wellness to the forefront for consumers who are realizing the critical importance of maintaining one’s health and wellbeing. Retailers who offer a wide array of health and wellness products will lead the pack as consumers seek products that not only taste good but also do more for them.
What have you learned from other difficult times in the past?
Through my decades as an investor, I’ve been through recessions, but never anything as sudden, all-encompassing, or multi-faceted as this. If you think about it, we simultaneously experienced two “Black Swan” events—COVID-19 and the oil collapse—which has never happened before. I don’t think anyone can weather this storm perfectly. It’s always darkest before the dawn, meaning that this storm will pass, and when it does, the struggles, experiences, and learnings will make us all stronger, better entrepreneurs in the long run.
Safe–and entertained–at Home: What business leaders are doing with their downtime
It’s definitely different now that I’m working from home alongside my wife and three kids. My workday and home life are necessarily blending a bit, with more breaks to entertain my kids, and therefore longer nights working to make up the time.
I just finished Billions. I know co-creator Andrew Ross Sorkin from segments I’ve done with him on CNBC’s Squawk Box. The show is such fun escapism with just enough exaggerated realism to make it a fun, guilty pleasure.
My wife, Hillary, and I just started Ozark on Netflix. So far, so good!
Well, now that we have three kids at home all day every day, I’ve been reading an awful lot of children’s books lately. I highly recommend everything Mo Willems for silliness that transcends generations.
In terms of more grown up fare, I just finished Grit by Angela Duckworth, and I’m about to start Can’t Hurt Me by David Goggins.
What are you doing to spend quality time with those you’re sheltering with?
My wife, three kids and I have had a lot of movie nights, bike rides, and games of Uno and Monopoly. We love taking hikes through the base of the Santa Monica Mountains, which has great views of the Pacific Ocean.
And then there’s been our kids’ virtual learning/homeschool, which has been a humbling experience for me. I’m grateful for my wife—she has been amazing through this process.
What are you doing to stay healthy mentally and physically?
Fortunately, the weather and scenery are both beautiful here in Santa Monica, so I’m able to work out in my home gym, go on a run, or bike ride or hike with my family. Spending time outdoors and with loved ones clears my mind and helps me stay grounded during this troubling time.
Where are you dreaming of visiting once things are back to normal?
Honestly, I’m eager to be able to do the things we did before all of this, the sorts of activities we took for granted and will appreciate so much more after this experience: going to dinner with friends, traveling to be with family across the country, or just being able to watch my kids play sports.