Innovation by means of creating new business opportunities has always been a task that many business owners tackle with difficulty. Some of us get absorbed by the day-to-day of our business operations, and the fear to face certain risks this makes innovation a far-off goal to employ. Nevertheless, the worldwide health crisis brought by COVID-19 moved every brick on the production and management of every industry, forcing everyone to take new measurements to survive and create new business plans that seemed impossible before. Even though the repercussions vary per industry, in general it seems like the candle industry has strongly benefited from this situation.
In this special article, three candle manufacturers and a raw material supplier share their impression on the effects of the pandemic in their companies, and the decisions taken to keep operations going forward; all of them show us a promising future for the industry.
Innovation is fundamental to overcome crisis
The President of Almon del Ecuador, Alfonso Hernadez, says that despite the numerous crisis that his country has suffered, his company has developed a culture of adaptation and flexibility, where innovation has been a fundamental factor to overcome crisis and continue growing.
“We need to constantly renovate ourselves, analyze our decisions, innovation requires a lot of work, initiative, technology and investments, we’ve been witness to the bankruptcy of companies that have not controlled their investments” says Hernandez. Alfonso mentions that in his company they’ve been alert of the global implications of the pandemic, expressing a great concern with the cost and availability of raw materials in the international markets. At the same time they’ve taken decisions internally like adapting certain departments to home office which has provided more efficiency than before.
In 2020 this Ecuadorian Company created an important investment for their employees by providing them with COVID-19 testing, adapting their employees work areas to meet strict biosafety requirements. They quickly organized a plan for the optimization of their resources and processes which allowed them to continue working practically without any interruptions.
Hernandez says: “The country needs a capital investment and as business owners we need to provide from within. In times of crisis, we tend to over protect our resources, but now is the time to actively participate in the recovery of the economy, lets avoid being plain spectators on what’s happening, lets practice our team spirit and lets help our society.”
Mr. Alfonso confirms that the candle industry in Ecuador is going through a difficult moment and it is hard to forecast what is to follow, similarly to what happens with the rest of products in a market with a much more cautious demand as it is time to go back to “normalcy”. However, he foresees that his post-pandemic company will be “much more efficient, focused on meeting specific objectives and with a culture strengthened by innovation.”
He also visualizes a company where human solidarity is manifested, he makes a final remark for all his colleagues:
“it is much needed to not lose sight of our surroundings, we need to humanize our companies, we need to worry about our employees, their families. It is our responsibility as leaders and citizens.”
We understood that life goes on despite uncertainty
Mexico declared quarantine right after the first spread of COVID-19 cases, this mandate practically resulted on the absence of workers in the companies. The “impactful” interruption of normality in the global commerce, the increase on freights from Asia and low availability from wax containers have been some of the challenges that Jesus Huerta, Commercial Manager from Veladoras Misticas had to face.
Huerta said: “we’ve lived moments of great uncertainty in which we’ve been forced to take decisions without having mayor elements; neither did we have the time to being able to outweigh and evaluate any outcome, but this has allowed us to understand that life goes on despite uncertainty. There is always a new door, we can survive, and problems always bring new opportunities.”
This company invested on adapting new hygiene methods throughout their facilities in order to create new ways to recover their day-to-day operations.
At the same time, they have been adapting to working remotely, and they’ve been getting more acquainted with having online conversations with their customers and suppliers. “We’ve adapted communications tools as part of the changes implemented in the company, we now share, sign revise and authorize documents online,” said Huerta.
The Mexican chamber of commerce requested the national government to defer tax payments to support the payment of wages during quarantine, but this among other requests were denied. However, Huerta and his team created a change in their sales strategy, reinforcing the commercialization of more profitable products, and an optimization in their production processes, which has allowed them to overcome the crisis by their own means and without the help of the government. Huerta affirms that the recovery of domestic demand is going to be in the medium growth term, but he sees an opportunity in the export market to replace this decrease in local sales.
We closed 2020 with a 10 % growth
The quarantine decree brought down the entire planning that Velas Cristal company had designed, according to its general manager, Ivo Berrío; a few days before the start of Easter, a time when the consumption of candles increases in Colombia, having 95% of the production and distribution plan completed for all his customers, Velas Cristal had to put a stop to their business.
“It was very worrying news for us because we had been preparing for months, we had produced more than 400,000 pillar candles, we had business committed with suppliers, a payroll for 32 workers. With the total closure of churches, supermarkets and shops, it was impossible to move another candle. It was crazy and our problems were growing day by day,” says Berrío.
Later, the government started the opening phases by industry, with a little more flexibility but still a lot of restrictions. To their surprise, when their turn came to open, they found out that the supermarkets shelves had run out of their candles and the demand for their product line was so high that at the end of the year, they closed with a growth near 10% compared to the previous period.
The need of the Colombian people to pray and be closer to God to plead for the health of the world and their loved ones increased consumption. “At a time when we were full of uncertainty there lied the beginning for a new opportunity. To our advantage, in Colombia we have the Ecopetrol Refinery, which supplies us with the raw material on a regular basis through distributors,” says Berrío.
To comply with the biosafety protocols established by the government, the company made a significant investment on equipment for their staff, workstations, disinfection routines for the company’s distribution vehicles, among others changes that were needed to achieve the government approval required to continue operating.
Ivo says he is proud of the work done, because after several management meetings, the company decided to keep all of its staff, paying them 100% of their salary at a time of little clarity; the payback came at the end of the year when they surpassed their sales expectations.
“After the pandemic, I see many opportunities for growth in the candle industry, as long as there are not raw materials shortages, it only takes the ingenuity of each candle manufacturer and a focus on the opportunities and needs of their countries to develop new products to introduce them to those markets”.
We see an increase for the interest in decorative candles
The pandemic has had a ripple effect, beginning with a significant reduction in purchases of raw materials by manufacturers between the months of March and May, due to the almost total cease of production processes in companies. Then, between June and July, orders begin to emerge little by little, until finally in August there is a recurrence of purchases with historical volumes, which, as Luis Ramírez from Globalwax tells us, it ended up “saving” the sales of the year for this company.
“It has been a period of great uncertainty and with important effects in terms of price and availability. After resuming trade at the end of 2020, we are starting to feel the unbalance in the flow of containers back to China and its neighborhoods, which creates a shortage of containers in Asia and, consequently, a strong limitation of shipments and an unprecedented increase in maritime freight”.
at the same time, Luis mentions that internally the pandemic has made them value the importance of the great employees they have. Switching to home office “implies having trustworthy personnel with a big sense of responsibility”. Home office was a short-term goal for Globalwax, but they have now achieved it faster than expected and consider that they have a more flexible administration.
Finally, Ramírez makes a series of remarks on the future of the industry. “We perceive an increased interest in decorative candles, which is a promising market with a lot of potential in Latin America. People are spending more time at home, which makes it possible to create a special environment. ”
Luis considers that candle manufacturers will have to develop a direct distribution channel for online sales. “In this case, it will be very important to differentiate yourself from the others, since the competition will also be available to customers in an easier way.”