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How H-E-B planned for the pandemic
- mimixco 7y agoI shop HEB and I noticed they were ahead of this thing weeks ago. Their delivery service is terrific and, though quantities are limited and deliveries have to be scheduled several days in advance, you can still buy everything. The article doesn't mention the huge food bank donations the company has made during the crisis. HEB is a good corporate citizen and a great place to shop. As the story says, thank an HEB employee for everything they're doing right now.
- draw_down 7y agoThis is an ad.
- smacktoward 7y agoThe interesting bit here: this is a company that has a full-time Director of Emergency Preparedness. They've had plans for dealing with a pandemic flu outbreak on the books since the bird flu outbreak of 2005. So when it actually happened, they could just pick up those plans and run with them. This is remarkable because it's hard to imagine most American companies, which are always looking to squeeze out a little more profit to juice the quarterly report, keeping someone on staff whose full-time job is to plan for what seem in good times like extremely remote contingencies. H-E-B, notably, is privately held.
- gfisher 7y agoWhat's even more interesting to me is that HEB has a chief medical officer on staff at all times as well.
- leetrout 7y agoI dig this. If I were ever blessed with the opportunity to run a private, profitable company these are the types of people I would want to hire and retain. Building a company with a slice of my citizens. My local food distribution company had the volunteer fire chief on payroll in a town that couldn't afford to pay a salary for a full time chief. I think it was a great civic service to let him leave work when we had calls during the day. Some day...
- tbyehl 7y agoEveryone operating at scale in the food supply chain needs an executive with medical/scientific expertise. The risks from foodborne illnesses are real. It feels like an eternity ago but there were several major food scares, recalls, and deaths, from contaminated vegetables last year.
- theNJR 7y agoThey were by far my favorite retailer to work with when I was CMO at Quest Nutrition.
- tnorthcutt 7y agoIt probably doesn't hurt that the Texas coast regularly gets hit by hurricanes, so they deal with emergencies (albeit on a smaller scale than this) somewhat frequently.
- superquest 7y ago> This is remarkable because it's hard to imagine most American companies, which are always looking to squeeze out a little more profit to juice the quarterly report HEB is privately owned and run by the owners. Those are very different incentives than public or VC-backed ventures.
- _bxg1 7y agoYeah, it's amazing how much of a difference that often makes. Being guided by people instead of a number.
- vikramkr 7y agoYou're still guided by a number. But you've got a different cost of capital, risk profile, and time horizon, as well as room for more stuff in your utility curve. So you will behave differently.
- notJim 7y agoI don't think contingency planning is actually that unusual for large companies. I did Google searches for "$groceryChain director of contingency planning" and found that many major chains have them (via LinkedIn). Also found some for hotel chains, etc.
- criddell 7y agoIs contingency planning the same thing as emergency preparedness?
- kortilla 7y agoYes. https://en.wikipedia.org/wiki/Contingency_plan https://en.wikipedia.org/wiki/Contingency_plan
- criddell 7y agoFrom that page: > A contingency plan is a plan devised for an outcome other than in the usual (expected) plan. That sounds a lot broader than emergency preparedness.
- akiselev 7y agoEmergency preparedness is a tiny subset of contingency planning since real emergencies are so rare compared to mundane day to day problems like a truck breaking down or too many people in operations calling in sick during flu season. The less glamorous parts of the job mostly include calling alternative vendors in a rush trying to get something or someone replaced without making it appear like they're desperate.
- eterm 7y agoIf you're a big company then busuiness continuity plans are required to get those magic ISO numbers that enterprise clients and insurers like to see.
- worldsoup 7y agoalso important that this is a private company that does not face the same quarterly earnings pressure as a publicly traded company
- ranrotx 7y agoAnother thing worth noting: HEB is privately (family, I believe) owned. The difference is night and day between their stores/employees and those of the competing grocer in my area that is owned by private equity.
- dopamean 7y agoWhich could explain the lack of interest in squeezing every bit of profit out of it. For them their name is literally on the business so being prepared to do the right thing is important to them.
- _bxg1 7y agoEven our government can't be bothered to keep someone on staff to plan for contingencies, apparently.
- adrianmonk 7y agoSeveral days back, they put out a video to try to discourage panic buying by reassuring customers they have plenty of everything in their warehouse: https://www.youtube.com/watch?v=A7hCw5Q8qGw https://www.youtube.com/watch?v=A7hCw5Q8qGw I enjoyed watching the video just because it gives an idea how big one of these company's warehouses is. (Best view starts about 0m55s.) Those are some tall shelves, and there are a lot of rows of them. They're supplying probably millions of people with food, so it makes sense, but I still found the visual impact interesting.
- mc32 7y agoWhat I don’t get is people hoarding perishables. Like what is your plan? Have it, is that the plan, have it? At least TP or water have a long shelflife, but (regular) milk and eggs???
- stagger87 7y agoYou can freeze milk and eggs for like a year no problem.
- StillBored 7y agoIf the st really hits the fan you won't be able to run that freezer for long unless you also have sufficient solar and an ability to run it without grid tie.
- maxerickson 7y agoThere is shelf stable milk. Buying a sensible amount of that in normal times is probably the way to go. I haven't tried it, but my understanding is that it has the same caramel-sweet flavor that most lactose free milk has, because of the higher heat during pasteurization (UHT https://en.wikipedia.org/wiki/Ultra-high-temperature_processing https://en.wikipedia.org/wiki/Ultra-high-temperature_process... ). I think the shelf stable is heated more than the lactose milk, which the lactose milk is still plenty noticeable.
- totablebanjo 7y agoPutting aside the awful human toll... I’m looking forward to reading and hearing from demand planners/time series forecasters about how they responded. Both in terms of updating models as well and how they communicated within their companies. One idea to alleviate the future forecasting challenges raise from this would be to add an explanatory variable/flag this time period. Another challenge will be if there are aftershocks and waves of social distancing required which could lead to more panic buying.
- yourapostasy 7y agoCheck out the city-oriented forums around the Net for Texas cities. I just sampled cities as diverse as El Paso, San Antonio, Houston, Dallas, and Austin, and the article doesn't do justice to how fervently Texans appreciate H-E-B, and how much the company shows its appreciation to its customers. Some quick Googling around in past disasters shows this is a love story that stretches back decades. Costco and H-E-B are possibly this generation's Nordstrom's story.
- bobbiechen 7y ago>Costco and H-E-B are possibly this generation's Nordstrom's story. Can you elaborate on what this "Nordstrom's story" means? Didn't find anything on a quick search.
- yourapostasy 7y agoNordstrom a decade ago was very well-publicized for its customer service. Example write-up [1]. Could all be PR-drummed-up. But from first-hand experience, at least in my experience they were customer-focused. [1] https://sharpencx.com/blog/nordstrom-customer-service/ https://sharpencx.com/blog/nordstrom-customer-service/
- function_seven 7y agoNordstrom was (still is?) notorious for their customer service. Taking anything back, helping customers with whatever requests they had, and generally going much further than a reasonable company would. https://www.bizjournals.com/jacksonville/blog/retail_radar/2012/09/nordstrom-tales-of-legendary-customer.html https://www.bizjournals.com/jacksonville/blog/retail_radar/2... (The tire story is half-true it turns out. Nordstrom didn't just occupy a former tire store location, they bought out the company that sold the tires.)
- kodablah 7y agoAside from a couple on the far west side of the metroplex, HEB hasn't really moved into the DFW area yet (Central Market notwithstanding)
- PTOB 7y agoAfter moving from Texas years ago, the emptiest hole in my life is still H-E-B.
- skunkworker 7y agoI miss their Hill Country Fare store brand and their meat department
- dustincoates 7y agoAnd their tortillas. Can't forget those.
- Rapzid 7y agoOh man, that location at 1604 and Bulverde has a legit Texas BBQ attached; you can smell the wood smoke when you get out of your car in the parking lot. Amazing.
- heyflyguy 7y agoOn Monday I realized we needed to restock our own shelves for this week. Nothing in large quantities, just trying to be a good citizen. I went to Tom Thumb and they were sold out of most necessity items. Same at Wal Mart. Same at Kroger. I went to HEB and bought a week's worth of everything I needed except eggs which they were sold out of. HEB, Dr. Pepper and Whataburger are Texas treasures as far as I'm concerned.
- bigtex 7y agoDon't forget Blue Bell.
- StillBored 7y agoOr shiner which made a reasonable beer when everyone else was trying to be bud. I thought they had gotten absorbed, but no they are apparently still independent.
- heyflyguy 7y agoI really thought they are owned by MillerCoors now.
- techsupporter 7y agoWhat sucks is the last two aren't "Texan" and haven't been for a while. The original Dr Pepper company hasn't been owned by a Texas firm for decades and Dr Pepper Snapple sued their last iconic bottler, Dublin Dr Pepper, nearly out of existence, but definitely out of bottling cane sugar Dr Pepper, eight years ago. And two years back, the Hobson family cashed in and sold a majority of Whataburger to a private equity firm out of Illinois. I wonder how much longer the Butt (yes, really) family will keep hold of H-E-B.
- look_lookatme 7y agoIf you feel like you need to de-Texas DP and Whataburger, you can replace one of them with Titos which is one of the most incredible growth stories of the last two decades. Same with YETI and Epic meats. Texas has had incredible success in creating ascendant consumer goods businesses for some time.
- mbrd 7y agoI've just got back from doing an HEB shop about 10 minutes ago, our first shop since the crisis full hit the USA. It was surprisingly pleasant! There was a short queue to get in (~5 people stood 6 feet apart), but once inside there were very few customers compared to any other time I've been in the store. I got everything that was on my shopping list. Of the things that I saw labelled as limited to a certain number per transaction, toilet paper was the only one that was completely out of stock (I didn't check hand sanitizer, but assume it was too). I got eggs, milk etc with no problems. I spoke to the cashier and they said toilet paper sells out by 10am most days.
- starpilot 7y agoI'm in Seattle, and the grocery stores here are almost exactly in the same state. 90% back to normal. Just no one's posting on social media the full shelves now.
- skunkworker 7y agoI just shopped at my local Trader Joe’s here in Utah and they had pretty much everything back in normal stock amounts. Costco though still was out of 5 or 6 staples
- empath75 7y agoIt wasn’t a panic. People were rationally stock piling so they would have to make fewer trips to the store later. Now that they’ve stocked up, they’re not going to the store.
- Tempest1981 7y agoSomeone compared it to preparing for a big snowstorm.
- throwaway5752 7y ago"Justen Noakes: So when did we start looking at the coronavirus? Probably the second week in January, when it started popping up in China as an issue. We’ve got interests in the global sourcing world, and we started getting reports on how it was impacting things in China, so we started watching it closely at that point. We decided to take a harder look at how to implement the plan we developed in 2009 into a tabletop exercise. On February 2, we dusted it off and compared the plan we had versus what we were seeing in China, and started working on step one pretty heavily." Read the article. It is rage-inducing how much better a single grocer did than the federal government with all of its resources. January. Talking with counterparts in China. Executing on existing disaster plans (federal response had one, but ignored it https://www.politico.com/news/2020/03/25/trump-coronavirus-national-security-council-149285 https://www.politico.com/news/2020/03/25/trump-coronavirus-n...).
- mc32 7y agoIf it’s any comfort few governments have shown the same amount of forethought and attention to detail. Singapore has done well, but besides them there have been lots of missteps all over.
- throwaway5752 7y agoThe US has what is generally considered the worst COVID-19 response among developed nations.
- DoreenMichele 7y agoPrevious article about how Waffle House handles supply chain issues in the face of disasters. It's practices are so good, the federal government uses the Waffle House Index to help gauge impact of disasters. https://news.ycombinator.com/item?id=15105662 https://news.ycombinator.com/item?id=15105662 https://en.m.wikipedia.org/wiki/Waffle_House_Index https://en.m.wikipedia.org/wiki/Waffle_House_Index
- yankeehue 7y agohttps://www.cnn.com/2020/03/25/business/coronavirus-waffle-house-trnd/index.html https://www.cnn.com/2020/03/25/business/coronavirus-waffle-h...
- DoreenMichele 7y agoYes, I'm aware. My best understanding is that current Waffle House closures have nothing to do with supply chain problems and are mostly due to state or local restrictions on venues like restaurants. Many places are insisting that takeout is fine, but dine in is unacceptable (and I don't disagree with that). Complying with the law to contain the pandemic in no way tarnishes their track record for having an amazingly robust supply chain system.
- aka1234 7y agoMoved from central Texas to Dallas about a year ago. Wife drives an hour out of her way just to shop at HEB because fuck Kroger. P.S. Dallas is a shithole.
- postlmc 7y agoMade the same move in '18, and noped right back to Austin late last year. HEB was way up there on our list of things we just had to have back. You have my sympathies. Agreed. Dallas is a shithole.
- deleted 7y ago[deleted]
- bdcravens 7y agoWe went to HEB a couple of days ago. There was no toilet paper, but plenty of meat, milk, eggs, etc. A trip to Target a few days prior found a store deplete of all of the above.
- xur17 7y agoIn general, I think stores are getting better at handling the demand, and most people have stocked up at this point. I went to Kroger last night, and they were low on chicken, but had plenty of everything else I was looking for. In fact, they had more than normal of some items.
- bdcravens 7y agoAt HEB they had a few seemingly unrelated items up front, where they just dropped off a full pallet.
- gwern 7y ago> Craig Boyan: We’ve been working very hard right now to deliver meat and poultry and eggs to our stores. We’re accelerating opening a new warehouse in Houston that was due a few months later. We’re taking some of our warehouses in the state and transitioning them over to serving just meat, because we’re seeing such significant demand for meat, poultry, and eggs. We’re still having a real hard time sourcing eggs. We had big loads in the last few days, and they’ve been scooped up as soon as they hit the shelves, so we’re working very hard with egg suppliers to see where we can get additional eggs. But our meat plant is running 24/7—we have our own meat plants here. They normally don’t go 24/7, but we’ve focused them down to serving the top fifty items out of our meat plants; they normally carry several hundreds. [Focusing on top items] means fewer changeover delays, and it allows us to ship significantly more meat. We’re seeing those kinds of moves across the board as we look to ramp up volume in a rapid way. One interesting thing about disasters and wars is the ways in which they point out (if only by subtraction) how the world spends its capabilities and resources during peacetime. In this case, what HEB is pointing out is 'the cost of variety': by offering hundreds of slightly different meat products, HEB is able to manufacture a lot less total than it would if it focused on a few products and could scale them & get economies of scale / experience curves (http://www.overcomingbias.com/2014/02/what-cost-variety.html http://www.overcomingbias.com/2014/02/what-cost-variety.html). Similarly, one can see this with any retailer like Aldi or Apple which makes a point of having as few distinct units as possible. This massive societal loss is particularly disconcerting when you note how rarely the different varieties ever actually differ in a noticeable way (I've done this with many food staples), and in some cases are literally the same product in different labeling (for price discrimination); they don't exist because of any actual need for such specialization, but because they can and they are useful for rich First Worlders to help signal & consume an identity. But when the rubber hits the road, no one really needs those hundreds of varieties of slightly different meat products, and 50 works fine.
- nicoburns 7y agoWhat's been amazing to me about this shutdown is how little of our population's work is actually required. We have key workers only working and... we still have everything we really need. Ok, so some of that work would be missed over longer timescales, but I still feel like there's a lot of wasted busywork.
- lonelappde 7y agoTexas Monthly writes great longform articles, thorough and informative and without the heartstring manipulating hype usually seen in magazines.
- el_don_almighty 7y agoHaving moved away from the Austin area to Illinois, all I can say is...man I miss H-E-B
- chiph 7y agoI moved back to North Carolina after 10 years in Austin, and I miss H-E-B as well. Harris Teeter used to be the "high end" store here (before Whole Foods arrived) and while I was gone they were bought by Kroger. The customer experience has gotten significantly worse. I'd love it if H-E-B could expand to the Carolinas and bring good tortillas here.
- roel_v 7y agoHow much more expensive is this grocery chain compared to others, if anything?
- hebfan 7y agoIt's not. There are some HEB locations that are better outfitted and have lots of ritsy items, but others with more staples and concrete floors that focus on lower-income communities. (The way they adapt to neighborhoods is pretty neat. Their downmarket stores seem utilitarian, not run down.) They are price-competitive with mainstream stores on the whole, not Whole Foods etc.
- pixl97 7y agoMaybe just slightly more expensive than Walmart. Price parity on a lot of basic items. Generally high quality items. Places like randall's and whole foods are much more expensive.
- ausjke 7y agoH-E-B is great for me as a texan, can't live without it. Also very active in public donations etc.
- justlexi93 7y agoSo a Texas grocery chain was more prepared than this administration. Good to know.
- Rapzid 7y agoWould entertain working at H-E-B if I left startups just based on their reputation.
- uberduper 7y agoThey were hiring a lot for their digital teams in downtown Austin recently. The location is a non-starter for me, otherwise...
- rckoepke 7y agoStaff at HEB have repeatedly told me they're not allowed to wear masks even if they have their own. HEB has also failed to implement a one person per cart policy like Aldi. The lines out front are dense, like going into a sports arena, not 6' spaced between people [I see the signs painted on the ground in the article, but I haven't seen those at any of the 4 HEB's I go to regularly]. They also don't limit capacity except to the legal fire marshal limit. Some of the other grocery stores around Houston have limited capacity to 25% of normal, so that everyone has plenty of space inside the store.
- deleted 7y ago[deleted]