ITHACA, N.Y. -- For countless businesses, the COVID-19 pandemic has been nothing short of an economic crisis. Many commercial services have been completely shut down for months, the risk of the pandemic too great to continue with business as it were. This can be billion-dollar airlines and hotel chains, or businesses as small as the corner coffee shop or neighborhood hairdresser.
Let's be honest; there is no doubt that the pandemic has disrupted the economy, generally for the worse. Across the country, many beloved businesses will not reopen their doors. Financial bottom lines have taken a major hit, with government funds like the Payment Protection Plan providing some assistance, but for businesses that were only just making ends meet, COVID-19 has been their death knell.
However, the story is not the same for everyone. Times of crisis can, under the right circumstances, be times of opportunity if a business is well-positioned to respond to the crisis or the "new normal" it creates.
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For local firms Rosie and Rheonix, COVID-19 has been that unlovable opportunity.
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Rheonix is a classic example of the former, being well-positioned to respond to the pandemic. It wasn't something they planned on doing; the Lansing-based biotech firm built its business on life science and food safety tests, like those for listeria bacteria. At the start of the year, the company was only just beginning to expand into clinical testing with a new test for sexually transmitted diseases going through federal FDA approval.
"COVID-19 surprised everyone. It had an impact on absolutely everything everyone did. From being certified as an essential building ,to disruptions to the supply chain, the ways we did business. As COVID-19 began to spread, it became obvious that a very large number of tests would be needed. Our molecular diagnostic designs and capabilities were really a perfect fit to contributing to controlling the spread," said Brooke Schwartz, Rheonix's Vice President for Strategy and Marketing.
"In a pandemic situation, the market needs a variety of testing options, it's not a one size fits all. Some of the tests that were already in the market run on very large instruments, or have complex workflows, or require sophisticated skill sets and training. What’s unique about our method is that it’s automated and easier to use, so it’s easier to get a lab up and trained quickly. Our method is also very cost-effective," said Schwartz.
Rheonix has found a welcoming market for their quicker COVID test. Six of their high-tech testing assays are in place at Cayuga Medical Center. Prior to Rheonix, COVID testing results would take at least a few days to get back - time where a person could expose others or risk their health taking a turn for the worse. Now, with the additional assays installed, CMC can test over 600 people per day, and all those people can get their test results back that same day. To quote Schwartz, "(t)hat’s gamechanging for them".
Not only does the quicker, cost-effective test offer a major public health benefit, it has big benefits for Rheonix as well. Normally, their Lansing manufacturing facility runs just one shift a day; lately, it's been three shifts, a 24-hour operation. Where many firms have had to laid people off, Rheonix has preserved jobs and rapidly expanded with new positions, increasing their headcount by one-third over the past two months.
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"We’re scaling as fast as we can. Every manufacturer of test kits is facing supply chain challenges and restraints. Reagents are in short supply, everything from swabs, to RNA extraction reagents to consumables. One of the things that allowed us to get up and running quickly is that we have some proprietary chemistry that was not as impacted as some of the other tests. We also brought online other suppliers within New York State very quickly, who can deliver us product as quickly as they can make them."
Beyond the COVID-19 crisis, there are long-term potential benefits as well. Rheonix was only just getting its foot in the door with New York State labs and hospitals for its sexually transmitted disease tests;. But now, many of these organizations would be repeat customers, already familiar with Rheonix thanks to their work on COVID-19. Should they find themselves with a need to rapidly scale up that testing, they know Rheonix is capable.
"The instruments we have in place in these hospital labs will be able to run additional tests when they become available from Rheonix. Our platform is versatile and can be used by these hospitals in a number of different ways, and we can work with these customers for other testing needs. We’ve built relationships with hospital labs really quickly, and those relationships will help us expand our menu, our testing capabilities and assay development capabilities," said Schwartz.
Meanwhile, over in Downtown Ithaca, online grocery shopping platform Rosie finds itself on the other side of the opportunity equation. Unlike Rheonix, it's not tackling COVID-19 head-on. But the company is well-positioned to respond to the indirect impacts of the COVID-19 pandemic, such as changes in consumer behavior.
According to CEO and co-founder Nick Nickitas, Rosie has seen 900% growth in retailer and wholesaler partnerships since the pandemic really began to take hold in early March. "As a result of COVID-19, the need for online grocery shopping has never been larger. Every shopper that places their order online is one less person in the physical environment. These wholsealers and retailers are looking to ensure the health and safety of their guests," said Nickitas.
Like with many remote technology services, Rosie's business has taken off in a pandemic-driven world where social distancing is needed and the gathering of thousands of people in a grocery store on a daily basis can unintentionally expose someone to the virus. For those who have weaker respiratory systems or pre-existing conditions that may result in COVID being a much bigger health risk, companies like Rosie are a welcome way to carry on normal activities like grocery shopping, in a way that's safe for them to shop.
"It's been a pretty busy period as you can imagine. Our (platform for) retailers did about 3-4x the volume in March as they did in February. They did more volume in the first week of April than the entire month of march. Ultimately they did 15x as much in April as they did in February. That’s massive growth all at once. But at the same time, the platform did great, we've made major tech investments and everything was working exactly the way it needed to."
With this massive growth, Nickitas says Rosie's staff has more than doubled, from about 23 to 53 employees. The company is still actively seeking more staff to tend to its rapidly-growing list of clients. According to Nickitas, one of the hardest parts about adapting to the pandemic-driven world is hiring and welcoming new staff when everyone is working remotely from their homes.
Rosie's in a very competitive market, with companies like Instacart and Peapod and the Amazon juggernaut all vying for control of the online grocery shopping market. Where Rosie has managed to carve out its prosperous niche is with smaller markets - specialty, regional and independent grocers.
"I think there’s a lot of differentiation there. Our platform is right-labeled. It has the store brand, it’s deeply integrated with the store so you’re getting the store’s prices and the store’s ads. The same experience can be had online as in-store. Also, here the groceries are picked by a local professional at the store, not a third-party picker. Customers have a lot of options. They can shop on Amazon or Instacart. But we want to be that easy local option."
Our partnerships have been across the U.S, we’ve also been expanding a lot with our existing partnerships. Dash’s Market in Buffalo, Brookshire in Texas and Louisiana, and Dan’s in Leavenworth, Washington, we’re bringing them online. These independents are seeing now more than ever that now is the time for online shopping. We’ve been partnering with IGAs and getting them up and running in 5-10 days."
Nickitas expects that the major growth and tech investments will bear more fruit in the long-run, even as the pandemic subsides and consumer behavior begins to resemble the old pre-pandemic days. "Prior to COVID-19, Rosie represented 1-3% of partner store sales. Now it’s 15-22% of in-store sales. We’ve become a much larger proportion. We expect to level out to 4-11% of in-store sales when COVID is over, but this has really driven an increase in adoption for shopping for groceries online."
"An Opportunity to Serve"
While Rheonix and Rosie have their own unique ways to succeed in a COVID-19 impacted world, one thing that was clear in both interviews was that the chance to have a greater impact in a time of worry and uncertainty, to try and get the crisis under control, or just make things run just a little smoother in a time when our lives are filled with anxiety.
"It’s given us an opportunity to serve. Our mission has been to help local retailers compete with national chains. We’ve been in this position to help local leaders serve their villages and cities when a lot of people haven’t been able to do that, we’re helping these local retailers keep their customers safe and help more people. We’re feeding hundreds of thousands of families per month and helping keep money in local economies," said Nickitas.
"The surprise benefit is that in a situation where you’d normally feel paralyzed by the risk and the impact on the world, we had an opportunity to contribute and make a difference and be part of the solution. It was invigorating for our team, it’s been really exciting and motivating for us to know what we do makes a difference," said Schwartz.
This time of uncertainty and disruption has in many ways been detrimental. The COVI-19 pandemic will likely be a life-defining event for years to come, and few of us will look back on it fondly. The same can be said for many local business owners struggling to keep their companies afloat.
But this pandemic-stricken world and its future aren't entirely bleak. It will be a different world, certainly. But as Rheonix and Rosie are demonstrating, it's a world in which people and businesses can still flourish and grow.
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June 13, 2020 at 02:41AM
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In a time of crisis, some local companies find opportunity - The Ithaca Voice
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