Covid-19 has redefined F&B Business

Harshavardhan Neotia Apr 30, 2021

Every crisis is a catalyst for change.

Though the impact of coronavirus has been violent across sectors globally, digitisation in the hospitality industry gained momentum during the pandemic.

With millennials turning to trouble-free food ordering apps and contactless payments, restaurants ramped up their takeaway and delivery offerings and adopted new marketing strategies to target consumers. New players jumped on the bandwagon, especially home chefs and entrepreneurs.

Top-end hotels, who were never a part of takeaway and home delivery of food, also succumbed to make up for the loss in business due to the pandemic.

From ITC Hotels to Marriott, Hilton to Hyatt - luxury hotels across India opened up their kitchens for home delivery of their signature dishes and delicacies either by partnering with on-demand food delivery platforms such as Swiggy and Zomato or by utilising their own fleet of vehicles.

Instead of banking on the existing cloud kitchen players, some like The Taj Group of Hotels launched their own food delivery app keeping in mind all the hygiene protocols laid down by the ministry of health and WHO.

Others like The Lalit raised the bar by introducing their ‘Grab & Go’ food truck that is parked at the hotel porch in Delhi, Mumbai and Bengaluru for consumers in mood for some churros dipped in chocolate sauce or a double-decker cheese burger. It is also offering the ‘Chef on Call’ facility, where their finest chefs visit a consumer’s home with ingredients to give them a great culinary experience.

Innovative and efficient solutions will gain traction in the industry as players explore newer avenues for additional revenue generation, to stay connected with their patrons and to expand clientele. With the lockdown pressure, the focus is on becoming cost-effective and competitive in every approach.

Along with various other factors which will change the industry, hospitality players are also looking at different modes like reducing the number of SKUs, forming a consortium for procurement and training staffs for multi-skilling to keep their business afloat.

Some of the other changes that the industry may witness are:

* Hotel chains will target suburban locations with smaller dining rooms (or no dining rooms) and large kitchens. The idea it to be closer to the consumer because they are expecting a large percentage of their orders will be slated for pickup or delivery.

* Existing standalone or small chain dine-out restaurants will re-invent themselves as delivery only restaurants and take advantage of the existing delivery and commissary kitchen infrastructure offered by delivery aggregators.

* Upcoming restaurants will look to build the uncertainty of the future into their unit’s layouts. They will include a drive-through, designated take-out/curb-side service, and a separate kitchen operation to support off-premise eating.

* Curbside pick-up or take away service will become more popular as it allows the operator to better control the process, the food is hotter and fresher than delivery and limits consumer-staff interaction. It is also being perceived as safer than third-party delivery.

* Restaurants will introduce QR Code scan for menu, offers and payments and real-time POS offers to save printing costs for safety and convenience, as per the WHO and FHRAI guidelines. Some players have already introduced it.

* Restaurateurs will start offering at-home experiences for small groups of people in order to meet their economics. High profile chefs, who specialized in premium dine-in experiences, may also switch to offering at-home boutique experiences. Discovery and booking of such experiences for family celebrations could be a great stand-alone opportunity for an online marketplace or an additional vertical for food delivery operators to venture into.

* Some are turning to in-person ordering systems that doesn't require customers to talk to anyone to place their order. McDonald's and Taco Bell have added large touch-screen kiosks to the fronts of their stores, reducing the number of staff required to take orders, while freeing them up to work on fulfilling them or other jobs that need doing around the restaurant.

* Another change one can expect to see is an increase in local and domestic sourcing and less dependency on foreign sources now perceived to be riskier.

* In the new post-Covid-19 world, packaging will need to be tamper-evident and maintain the food’s temperature, moisture and presentation to cater to the consumers heightened sense of food-safety and sanitization mentality. Consumers will demand it and will be willing to pay for it now.

While some of these long-term changes are already taking shape as consumers and players struggle to adjust to their new environment, others will emerge over time in the post-Covid world.

Technology has become an enabler like never before. It has given online food delivery services the requisite boost. It has also amplified the need for supply chain collaboration and communication between all parties in the value chain.

Going forward, the cost of supply chain and logistics including those incurred for order fulfilment, delivery, adjusting business resources to dynamic market demand, costs of cardboard boxes for packaging, gas, mileage and the cost for hiring a driver for the last-mile connectivity, could be the key restraint for the F&B industry.