Market Overview

Top Pandemic-Proof Business Types

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Top Pandemic-Proof Business Types

When state-imposed quarantines and lockdowns began in late March, there was a great deal of fear, frustration, and, perhaps more so than anything, uncertainty. 

The rapid spread of COVID-19 was the beginning of a nightmare scenario for countless businesses across the country (and the world), and unquestionably, it’s been heartbreaking to see so many of our friends, family, and co-workers laid off from their respective jobs. 

From a financial perspective, it’s only natural to think about how something of this magnitude affects us as individuals. How is this going to affect me personally? Will my job be safe? Will I still be able to provide for my family? In fact, many workers were and probably still are more concerned about their continued ability to make money than they are about contracting the virus.

Unfortunately, myriad industries took a huge hit and likely will need several years to bounce back fully. So many small businesses have had to turn out the lights for good, and it goes beyond your neighborhood bar (though that one hurts). Businesses in the hospitality space, independent retailers, airlines, etc., have had to furlough or lay off employees at best, or shut down completely. 

But some industries and business types have seemingly been pandemic proof. And actually, there are some, including food delivery services such as Doordash and GrubHub, that have done huge business—we’re talking better than the pre-pandemic days—during the first six months of the coronavirus crisis. 

Omitting the healthcare and pharmacy fields, here’s a look at five of the top pandemic-proof business types.

The Gig Economy (Minus Calling for a Ride)

Uber (NYSE: UBER) and Lyft (NASDAQ: LYFT) numbers are way down, but as mentioned earlier, food delivery is unphased by the pandemic. It makes sense. We’re spending a lot more time at home nowadays, and it’s exhausting. Certainly too exhausting to cook every day. Doordash is leading the way with 45% of the delivery orders (and an extra $400 million in financial backing earlier this summer), but the competition from GrubHub (NYSE: GRUB), Uber Eats, and Postmates remains steady.

It’s not just for premade meals, either. Grocery delivery has held firm as well. Between March and May, Instacart went from 200,000 shoppers to 500,000 with plans to bring on an additional 250,000 to meet demand. And the demand has been strong. As much as 40% of Americans say they have used services such as Doordash and Instacart for food delivery, and depending on how things play out, this could be how we do the majority of our food shopping in the future.

Drivers Wanted

Speaking of delivery, Americans are doing a lot of online shopping for non-consumables as well. From fitness equipment to home improvement products to random purchases that seem like a good idea at the time (we all have some questionable items in our Amazon order history), it’s safe to say that consumers have been stocking up as they’ve hunkered down. 

With that, we need someone to bring us our packages. 

Sidebar: Not mentioned in this article, but Big Cardboard has to be doing well, right? 

Delivery drivers are in high demand. Carriers like UPS (NYSE: UPS) and FedEx (NYSE: FDX) are accustomed to hiring more workers around the holiday season, but they weren’t fully prepared for the pandemic surge. Around 50% of deliveries by UPS are direct to consumers (with the other half being bulk deliveries to businesses). However, during this time of COVID, the company has seen that number shoot up to about 70%

And with people ordering more goods online, that drives up the demand for warehouse and fulfillment workers. 

Keep it Clean

It comes as no surprise that the pandemic has been fruitful for professional cleaning services. Office buildings, public transportation, reopened gyms, government buildings, and other high-traffic public spaces need extra attention when it comes to disinfecting. Many professional cleaning service companies have seen demand go through the roof, both from new customers and current customers who want more regular cleaning. 

There also has been an increased need for cleaning supplies, chemicals, and, in the case of a St. Louis-based cleaning service, proprietary cleaning technology.

Who Got the Hooch?

Remember hearing that people weren’t buying Corona beer because of it sharing a name with the coronavirus? Turns out that wasn’t actually true. The pandemic has forced some of the smaller liquor stores to close, but overall, packaged alcohol sales are way up over the same period last year.

Consumers aren’t drinking as much in restaurants and bars, so they’re bringing the booze home. Hard liquor, wine and beer were all selling at a higher clip than they were last spring and summer. And the hard seltzer craze isn’t slowing down, either. In 2019, people spent $1.5 billion on the boozy sparkling water. In less than 90 days between March and May of this year, consumers spent $1 billion on hard seltzers. Lots of thirsty folks in quarantine.

Let the Games (and Puzzles) Begin!

From a business standpoint, it couldn’t be a more perfect situation for video game makers. You and your kids are at home with not much else to do, so it’s a little easier to justify the $60 price tag for the new Madden game or fork over an extra $20 for the latest Fortnite Battle Pass. 

Video game companies are raking in the dough to the tune of $11.6 billion between April and June. That’s a 30% increase from the same months last year, and with the next-gen consoles from Microsoft and Sony coming out before Thanksgiving, the momentum looks like it will continue. 

Analog interactive entertainment is also doing well. Board games have seen a spike in demand, and so have jigsaw puzzles. No longer just for a rainy day, puzzle makers have been having trouble cranking out enough product to meet demand. In fact, one company has seen a 370%  increase in puzzle sales. Remember, start with the border pieces first and work your way in. 

Unfortunately, the success of these different business types is the exception to the norm, but then again, what is “normal” anymore? The first priority, of course, is to ensure public health and safety, then it’s time to get people back to work. No one really knows what’s going to happen next, but if we continue to do the right thing for the greater good and support one another, hopefully a prosperous rebound is right around the corner.

 

Article brought to you by UpCity.

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

 

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