Dive Brief:

• New Hope Network announced the annual Natural Products Expo West trade show in Anaheim, California will be postponed after exhibitors and attendees pushed for it to be moved due to fears about the current coronavirus outbreak​. New Hope announced the news Monday afternoon. The five-day trade show was expected to begin Tuesday. 
• The group plans to announce a new date for the show by mid-April and has set up a rebate fund of $5 million to help the entrepreneurs and small businesses impacted by the change. 
• "It is now clear, despite continued advice from local government and health authorities that the City of Anaheim remains open, that the majority of our Community want the show, but they do not want it now," New Hope said in a statement.

Dive Insight:

Two days before this announcement, the show's organizers predicted that Expo West attendance could be down as much as 60% as hundreds of companies and brands pulled out of the conference, citing concerns for employee safety. But at the time, New Hope said the show would go on and announced new safety measures — including having 15 food safety advisers on the floor to provide exhibitors with health and safety recommendations. 

Although there are currently no recommendations by the U.S. government against travel within the country, the coronavirus outbreak is stoking fear as more cases of COVID-19, the illness it causes, have been detected. According to the Centers for Disease Control and Prevention, as of March 2, there are 43 total cases in the U.S. in 10 states, including California. These numbers include 17 hospitalized and two deaths. 

A number of state and local governments have issued states of emergency, including Orange County, California, where Anaheim is located. The county pushed more food and beverage brands to pull out of Expo West. 

"We had 16 team members traveling to Anaheim this year, parents, daughters, sons, spouses and friends. With so much unknown around the Coronavirus it did not feel right to ask these people to attend the show and then return back to their loved ones with uncertainty," Grant Gyesky, CEO and co-founder of coffee company Rise Brewing Co. wrote on LinkedIn over the weekend.

As more companies announced their intention to cancel, despite the short notice, there was growing criticism around the conference remaining on and not offering brands an opportunity for a refund.

Daniel Lubetzky, founder and executive chairman of Kind Snacks, wrote on LinkedIn Monday that given the high profits for New Hope Network from the show, he would have expected the organizer to offer exhibitors and attendees — especially startups and small companies — a refund or credit several days ago if they opted not to attend. He said New Hope’s commitment to have just 15 food safety advisors walking the floor was "downright silly."

"Their communications and lack of leadership have missed the mark," Lubetzky said. "Specifically, they seem to be forcing companies to choose between having to lose what to many of them is the largest investment of the year or to face what could turn out to be a potential threat to their health and wellbeing."

As the criticism poured in, New Hope changed its mind.

Fred Linder, group president of New Hope Network, said in a statement they were guided by the majority to postpone the show. New Hope also said it plans to work with exhibitors and attendees on future credit and support, and help small businesses through its rebate fund since Expo West is typically a big investment for them. According to an exhibit space contract, booths can cost thousands of dollars.

New Hope plans to host Expo West before the summer, either in Anaheim or an alternative location, but that may not be an easy task. It will likely be tough logistically to reschedule the event. Last year, more than 90,000 people traveled to the massive convention center in Anaheim to launch new products, see what new and existing brands have to offer, and attend panel discussions about the natural food and beverage industry. On such short notice, it could be difficult to find a space that could hold this many people and for everyone to  reschedule their plans. Since New Hope also hosts the annual Expo East conference, which will be in Philadelphia in September, it could be hard to get exhibitors and attendees to invest money and time in both shows.

Beyond the trade show, the impact of coronavirus on the industry is starting to hurt brands big and small. CPG companies in the U.S., including Coca-Cola, Mondelez, Unilever and General Mills, said the epidemic has already reduced sales in China, where the outbreak started. Companies and analysts are cautioning the outbreak could become a bigger financial drag to their business the longer it lasts.