F&B: The next big frontier

If there has been one vertical of the hospitality industry that helped it navigate out of the challenging situation arisen due to the Coronavirus pandemic, it has to be F&B. The sector raked in the greens when the curtains for most businesses seemed to be coming down and a number of players, immaterial of the fact whether they were big or small, had chosen to pull down their shutters. In the absence of travel, weddings and MICE, especially when it came to the hotels, F&B emerged as the key player globally.  

From reaching out to the guests with at home experiences to offering healthier, hygienically safe and tastier options and chef-driven delivery restaurants to cloud kitchen, F&B sector introduced a number of trends, some innovative and some incredible ones, during these challenging times which helped the industry stay afloat. The single largest employer in the country with more than eight million workforce, the Indian food and beverage industry accounts for three per cent Gross Domestic Product (GDP) with a market value at four trillion Indian rupees in 2020. Overall, the F&B industry reinvented itself to attract new customers while retaining its old and loyal ones. The F&B segment comprises around 30 per cent of an average Indian household with consumption at around Rs 30 lakh crore in 2019 and likely to grow at the same pace over the next couple of years.  

CURRENT STATE

Known for curating the culinary brand of Bukhara and reviving the Dum Pukht tradition of cuisine, Chef Imitiaz Qureshi believes that ‘whatever happens, happens for good’. He opines, “The new normal not only emphasises on hygiene but is also an important recall as to how and what we serve to our patrons since you have restaurant quality food delivered to your doorstep at the click of a button.” The Padma Shri awardee considers the current timeline as a blessing that has brought a lot of learnings and helped the industry move from a state of limbo as to where it was heading as an industry before the pandemic.  

The mega shift in the F&B industry has been towards the standards of safety and hygiene. It now follows a set of stringent protocols and measures to encourage customers eat with them and also to take care of the well-being of their associates. Most experts believe the pandemic gave them a chance to reboot and relearn their businesses. Also, it not only helped them to cut costs but innovate and remain relevant to the market. “There’s a saying that you can’t stop the waves but you can learn to surf. That is exactly what the Food & Beverage industry has learnt to do in the last 18 gloomy months of two back-to-back lockdowns. We have relearned our business from scratch, reopened our outlets as if in a start-up situation, redefined our processes and procedures to adapt to the unpredicted times and most importantly, we fought for was to keep our team together,” shares Rohit Aggarwal, Director, Lite Bite Foods. 

Seasoned food writer, researcher and historian Chef Osama Jalali terms this industry as the one which never quits or stops. The food and beverage industry connoisseur expect the year 2022 to be a game-changer. Zorawar Kalra, Founder and Managing Director, Massive Restaurants, shares that despite the challenges of occupancy capacity and operations timing restriction, the industry has bounced back and rebounded very strongly. “I would say the demand recovery is now over 90 per cent and in large part due to the strong vaccination drives. The best thing is that the Indian consumer loves sitting out, it is the number one form of entertainment for them. The largest percentage of gross disposable income spend in India by Indians is on food, eating out and ordering in. It is a part of our DNA,” he says.

MARKET TRENDS

A lot has been predicted by industry pundits and witnessing the ongoing trends that drives the business in the market on, one thing is quite evident that the pandemic has changed the mindset of both the chefs and the consumers. The needs of customers define how the businesses need to be conducted and it has shifted towards healthier options now. Not only this, when people were confined within their own spaces during lockdown, it led to a huge shift towards deliveries. Be it small restaurants or five-star hotels, everyone preferred the delivery model and customers too responded positively. 

Justifying the saying ‘opportunity in adversity’, restaurateurs and hoteliers utilised the lockdown period into one of innovations and out-of-the-box thinking, especially on the delivery front. Another notable trend that Chef Manish Mehrotra pointed out is ‘cloud kitchens’. He says that since people were getting bored of eating home-cooked food every day, they began ordering from outside and got food delivered to their homes. “Delivery started as a need of the hour option. The best part was that a lot of innovative and sustainable options started coming up. People became more conscious about sustainable packaging and more innovative menus started coming in through delivery,” he feels. Mehrotra, the man at the helm of the iconic modern Indian restaurant, Indian Accent, strongly believes the ‘cloud kitchens are the future’ though it can never replace the experience of going out at a restaurant with family or friends. 

Having similar thoughts about cloud kitchens, Kalra marks that outdoor dining will continue to grow in the coming future. “You are going to start witnessing smaller restaurants because the occupancy cost of smaller restaurants is lower,” he observes. Adding that these unprecedented times created a downward spiral for the restaurant industry and to combat this uncertainty, the sector will be opting for smaller outlets and will ensure to add pandemic clause in their agreements with landlords.  

A lot of unimaginable changes also started coming in as we entered the Covid-19 era. With hygiene and safety norms being the number one priority, it became imperative for the industry to move towards technology. What has been long pending was given a push by this uncertain event in our lives; the move towards digitisation and innovation. Chef Qureshi affirms the competition has stiffened. “Being creative is the most primitive aspect of our industry. We need to stay passionate and pay utmost attention to quality no matter what the price. The magic in restaurants can only shine with authenticity and intangible gestures that no delivery can offer. We, as Indians, are now more open to exploring. Just that one needs the right knack,” he puts in. 

Samir Kuckreja, Founder & CEO, Tasanaya Hospitality, believes focussed menus and growth of smaller formats will drive the post-pandemic food and beverage culture. “Continued focus on delivery and increased demand for healthy options on the menu including trans-fat or cholesterol-free, low sugar or sugar-free and vegan, are some other trends in the market,” he says. 

The Director of ABV Hospitalities and freelance consulting chef Vaibhav Bhargava shares numerous trends have been introduced in the last few years but post-pandemic, he opines the trend of ‘plant-based foods’ will rule this year. “Health and wellness is another area where guests have become very conscious about,” he puts in. 

Mentor, consultant and celebrity chef Sabyasachi Gorai lists two emerging customer outlooks that he has witnessed – pocket-friendly options and homely food. “The new concepts include sustainability and clean food. The choice sources of food have definitely changed, both in dine-in and takeaway,” he continues. Known for cooking shows, Vicky Goes Veg and LivingFoodz and the founder of SpeakBurgers Chef Vicky Ratnani states that regional food, vegetarianism, veganism, organic food, private dining, chef’s tables and chef’s tasting menus are definitely going to be on the higher side.

EVALUATING BUSINESS

Costs and overheads have been a dampener for the F&B industry. This has resulted in many shops shutting operations as they couldn’t cope up with businesses running slow and overbearing costs but establishments that reshaped their Standard Operating Procedures (SOPs) had emerged with an upper hand. From cutting unnecessary costs to focussing on the quality of products, everyone made sure to up their game. Even Chef Qureshi believes one should never deviate from their objective of delivering “quality”. “Due to high costs and overheads, there have been a lot of disruptions among all segments which has sharpened the gap between quality products. With all my experience, I can assure you that ‘quality wins over quantity’ any day,” says the veteran chef. 

For Kalra’s Massive Restaurants, the period of Covid-19 had a silver lining. “We found an opportunity in the crisis where every expense was closely scrutinised,” says Kalra, adding, “We cut out extra costs and have been able to substantially re-engineer our menu. The food cost has, therefore, come down. We are now running at 25 per cent food cost across the company, which is 5 per cent better than we used to during the pre-Covid-19 era.” 

Kalra puts in that the Group has also been able to rationalise on personnel costs without compromising on wages and by renegotiating rentals with landlords, the unit levels have become better than before Covid-19 appeared on the horizon. “The pause button we had during the first and second lockdowns enabled us to relook at the business, retool and reboot the business and come out sharper, leaner and meaner,” he avers.  

The past trustee and president of National Restaurant Association of India (NRAI) Kuckreja, who also headed one the oldest fast food restaurant chains, Nirula’s, also airs similar thoughts as Kalra. “During the pandemic, the restaurateurs have learnt to eliminate all unnecessary costs. They have also optimised their corporate and production overheads. The key lesson is to have a ‘lean operating model’ and not to increase overheads unless absolutely essential,” puts in Kuckreja. 

Chef Ratnani points out that consistency of products and customer service has become top priority today. “Restaurants went that extra mile with packaging, getting their hygiene standards up and make backend stronger. Then with digitisation like UPI and QR codes, it is the most user-friendly method to consume food now. The pandemic boosted two things which were important in terms of health, safety and efficiency: Technology and health-hygiene,” he says. 

TRANSPARENCY BETWEEN BACK AND FRONT OF THE HOUSE

We often wonder as to what transpires at the back of the kitchen of any outlet. While these thoughts used to be at the back of our minds before Covid-19, they are now at the forefront. People are now getting more conscious about what goes in their food or how their food is being prepared. To imbibe that level of trust among customers, many restaurants have introduced the concept of partial or completely open kitchens. At Indian Accent, says Mehrotra, guests are welcome to walk through the kitchen and meet people cooking their dishes. He feels the barrier between the back of the house and front of the house needs to reduce and things should be more transparent.  

Kuckreja also feels there is an increasing trend of casual and fine dining restaurants having open kitchens. “A few brands have started live streaming from their kitchens during the pandemic and this trend will probably increase over the years,” he puts in.

GOING LOCAL 

An important aspect in the F&B business that came to light during the period of the pandemic was the “import of ingredients”. Restaurants and hotels that sourced ingredients from foreign shores had a hard time laying their hands on them during lockdown. This led them to use local produce. This not only reduced costs, they helped local vendors and farmers maintain their livelihood during tough times. 

Chef Saby Gorai shares he created dishes from whatever options he had at hand. “And I think, we created some amazing dishes using local produce. I didn’t miss anything important, barring a few,” he adds. 

Chef Jalali shares that unavailability of a few ingredients led to the mushrooming of recipes made with local produce. “Chefs have realised the way forward is to use local stuff. The rich culinary legacy of our country is now being noticed and showcased globally,” he says, adding all his recipes are made with locally sourced ingredients. Jalali shares that he has planned a couple of food festivals across the country and internationally that will showcase regional Indian cuisine. 

Like Chef Jalali, Chef Vaibhav Bhargava too ensures using local produce in his menu. He says many ingredients are grown in India that taste similar to international equivalents. Chef Bhargava explains it depends on how the chef tweaks his recipe without affecting the taste. “There may be a slight change in the recipe but if the chef is creative and uses best quality local produce, he can provide the same experience. Many concepts like ‘farm-to-fork’ have been created by chefs that help promote local regional recipes which were missing earlier,” he continues.  

Pointing out a critical aspect of using local ingredients, Chef Mehrotra cites an example of importing pork from overseas markets due to the unavailability of an Indian supplier who provides proper certified pork. “As we don’t know about the source, it creates an iota of doubt. Pork is sourced from outside, scallops and shell crabs we import but rest is sourced locally,” he shares. 

Chef Kalra too has reduced his restaurants’ dependence on imported goods by 30 per cent and uses local substitutes. “By using local produce, we have been able to reduce costs and get fresher material at cheaper price. So why would you not use them? We’re now using absolutely local or in some cases, making them ourselves. We want to propagate local farmer and Indian produce and do as much as we can to contribute to our economy,” avers Kalra. 

The F&B industry has braved enormous obstacles in the past 18 months but it is one of the resilient ones to embrace challenges and turn them into opportunities, be it food delivery, digitisation or going local. The headstrong industry is moving towards a transformation and aim to offer customer-centric, creative and innovative services while keeping the health and safety measures in mind. The operations of the sector are believed to become less labour-intensive and the balance sheets leaner. All these changes are likely to elevate the customer experience to a different level, thus revealing a new face of the industry.

‘Sustainability in our kitchens is non-negotiable’ Chef Sharad Dewan, Regional Director – Food Production, The Park Hotels COMMITTED TO SUSTAINABLE FOOD Food is an extremely important part in The Park culture code and we take it very seriously. Trends come and go but culture remains. Our food philosophy stands on three pillars – fun and unique dining experience, health and sustainability which depends upon ingredient sourcing and quality and unique food design which revolves around plating.  Committed to traditional cuisines, we are devoted to authenticity but do not hesitate to reinvent or fine-tune dishes to create a unique experience. At Park Hotels, we are concerned about the environment and care for Mother Earth, hence sustainability in our kitchens is non-negotiable. Even in our international menus, we encourage chemical-free and organic ingredients which are locally produced.  We have introduced foods and beverages which boost immunity across all our hotels. We have introduced many vegan dishes now. Since diners have become more conscious about what they eat, we have decided to be more transparent with what we serve and all our servers have been trained about food origins. We have also developed a special packaging to serve temperature sensitive food like sushis in chilled containers so that these stay safe for at least three hours.  REVENUE SHARE FROM F&B SECTOR Hospitality and tourism have been worst-hit due to Covid-19 crisis. An FHRAI report says the hotel industry took a hit of over 1.3 trillion rupees in fiscal year 2020-21. According to the HVS Report, the overall revenue of the Indian hotel sector is set to decline by anywhere between US$ 8.85 billion to US$ 10 billion, reflecting an erosion of 39-45 per cent compared to previous year.  Some of the hotels and standalone restaurants were able to sustain the first lockdown and then restrategised their business models to gain back substantially.   We are now witnessing many new outlets opening and footfalls have slowly reached near 100 per cent of the allowed capacity. All our restaurants are at about 60-70 per cent occupancy during weekdays while the occupancy is 100 per cent on weekends. This is an encouraging sign and we hope that this trend continues.  The upward curve is going to be sharp and steep and it is up to us to train ourselves to make the right moves to ride this curve and make the most of it.   STAYING IN TOUCH Our business philosophy rests on the seven brand pillars and our vision – leadership through differentiation. This helped us in reimagining, resetting and restarting our hotels. As we opened outlets and hotels, we relooked at our strategies on a day-to-day basis. When our guests could not reach us, we reached out to them in their safe homes, through home deliveries or through online entertainment programmes or provided them chefs at home for small gatherings. We never lost touch with them and when we reopened, they were still loyal to us.  We created everything keeping in mind that we have to create ‘Anything But Ordinary” experiences. We introduced QR-code based contactless menus and services and created a huge SHIELD programme which ensured all safety protocols are followed diligently and all guests and staff are kept safe.  The biggest push has been to reimagine food and beverage. This was done in tangible ways – sustainable and safe packaging and delivery convenience etc. We looked at sustainable sourcing and reducing carbon footprint.   PLAN OF ACTION * Localise supply chain – We will endeavour to buy at least 80-90 per cent products locally.  * Update menu seasonally – We will try to change our menu three to four times a year. * In-house production – We will try to reduce proprietary or packaged products. We will dry our own fresh herbs, make our own pickles and grind our own spices.  * Start an onsite garden – We may start small, but we will, even if it is a herb pot.  * Reduce food waste – We will reduce food wastage by 30 per cent in 2021-22.  * Partner with the community – We will partner with farmers, organic suppliers and local organic/ sustainable producers. * Think beyond food – We will also think about carry bags, storage bags, recycled paper, food takeaway boxes, garbage segregation.