Why egg & dairy demand is surging amid coronavirus

Vital Farms CEO Russell Diez-Canseco joins Yahoo Finance’s Zack Guzman and Heidi Chung to discuss the unprecedented demand the company is experiencing in the the past two weeks amid the coronavirus outbreak.

Video Transcript

ZACK GUZMAN: Now, we've been taking a look at companies that have been impacted by the coronavirus crisis-- some negatively-- but also some on the positive side as well. One of those companies would be Blue Apron Holdings. We've seen shares in Blue Apron up by about 350% over the last month, as more Americans get curious about meal kits once again as they stay home what that they could be cooking.

And when you look at what they are cooking, we're seeing surging demand for some key staples here-- eggs, cheese, dairy-- all surging much higher when you look at a few of the weeks that we've seen in March versus what they were just a year ago. We saw eggs rise 85% in terms of sales versus last year, cheese up 84% as well. And that's causing a lot of good news for some of the key farm suppliers out there.

I want to bring on Blue Apron's largest supplier when we look on the eggs from the largest pasteurized egg company in the US-- that being Vital Farms. And their CEO joins us now. Russell Diez-Canseco joins us on the Google Hangout. And Russell, I mean, what kind of surge in demand if we're seeing that much on a global scale or, at least, here in the US in terms of egg demand? What are you seeing as you supply some of these more healthy organic options to Americans?

RUSSELL DIEZ-CANSECO: Sure. Well, first, thanks so much for having me. You know, what we're seeing is order flow up between two and three acts normal when compared to pre-COVID order levels. But what's really interesting is to see how I think where people are consuming their food shifts from out of home to at home. It's not necessarily that they're consuming a lot more food. But they're just shifting where they're consuming it. And that's left a lot of empty shelves at grocery stores.

HEIDI CHUNG: Russell, it's Heidi here. Thank you again for joining us. You are actually partnered with over 200 family farmers and over 13,000 retail partners. So a lot of questions have been raised in terms of what the food supply chain situation looks like right now.

Some people have reported that there are some challenges on that front. Can you talk to us a little bit about that about your supply chain? And just the fact that you guys get your eggs from a specific part of the country, so distributing that as well. I want to know the details on that front.

RUSSELL DIEZ-CANSECO: Sure, thank you, Heidi. So, first of all, I would want to emphasize upfront-- we've seen no supply chain disruptions from our perspective, both inbound from our network of over 200 small family farms that you mentioned across the area of the country we call the pasture belt, which is warm enough for meaningful outdoor access for animals and wet enough for there to be great vegetation.

So no supply chain issues inbound from those farms. No supply chain issues in terms of getting product out from our processing facilities to warehouses and to retailers. I think the biggest challenge is simply that the whole supply chain has had to switch from supplying roughly equal volumes to food service outlets and grocery outlets to primarily grocery. And so we're seeing that shift happen. And we're starting to see product arrive on shelves and improvements in in-stock conditions.

HEIDI CHUNG: Russell, talk to us a little bit about the workforce situation over at Vital Farms. How do you had to lay off any of your employees or furlough any of them? Or have you even brought on even more employees? And what are you sort of doing to make sure you're protecting them during this time?

RUSSELL DIEZ-CANSECO: Sure, thank you, yeah. The people are at the heart of our mission and what we do. And so we are strongly focused on making sure that our people are safe. We've laid off no one. And being in the food business, we're one of the few sectors that, frankly, has seen increased demand. And so we're able to sort of maximize our output with our existing crew members. We do have some overtime opportunities which they're appreciative of.

We started focusing on social distancing within our operations when we started to see this effect-- states close to our operations. And so we're being very mindful of checking in with our people everyday about their health without being overly intrusive. We're practicing social distancing. We've done things, like staggering breaks and staggering lunch breaks so that people have fewer people in their vicinity when they're not at their job station. And so far we've had no employees affected by COVID-19 that we're aware of.

ZACK GUZMAN: Russell, I mean--

HEIDI CHUNG: Russell.

ZACK GUZMAN: --at it. Sorry, Heidi. You can go for one more here.

HEIDI CHUNG: Just really quickly, Russell. So we've been seeing reports that, perhaps, truckers are not wanting to necessarily travel long distances anymore in these trucks. I'm wondering, though, because eggs and dairy are such perishable items, unlike canned goods, are you noticing any challenges on that in terms of getting your products to places as quickly as possible, especially as these challenges are rising?

RUSSELL DIEZ-CANSECO: You know, the thing I've seen consistently on our own employees' part-- we call them crew members-- to throughout the supply chain, the truckers, the warehouse workers, and the retail workers is, they all understand that they're part of something really important right now, which is getting food to Americans.

I've seen zero evidence of any reluctance on any part of our supply chain or our partner supply chain employees to do what they need to do to feed America right now. It's actually been incredibly gratifying. And I'm so proud of everyone that's involved in what we're doing.

ZACK GUZMAN: There you go. I mean, I have family back home in Dallas to know you're in Austin, Texas. And it's-- it's exciting. And I'm learning a lot just hearing about supply chain issues-- not at all as easy as just saying chickens need to crank out some more eggs here. There's a lot more going on. And I appreciate you bringing us the details behind the scenes, Russell. Appreciate it. Stay safe out there, my friend.

RUSSELL DIEZ-CANSECO: Right back at you. Thank you.