how the food industry is battling covid-19?
Not too long ago, it was just a Wuhan’s problem. Soon it became China’s. And even sooner, the problem gripped virtually every nation. The world was unprepared – and so was the food industry. Among the segments that would possibly take the biggest economic hit due to coronavirus, the food industry stands ahead and apart. In the USA, experts estimate a $225 billion coronavirus-related loss for the restaurant industry. Back home, the National Restaurants Association of India (NRAI) expects the food service sector to lose about INR 70,000-80,000 crore in 2020.
From Then To Now
As the virus spread in the early days of March, the worries mounted for food business owners in India, cascading to market-wide panic. The news of COVID-19 streamed to the last urban and suburban consumers; demand in restaurants soon started declining. Fearing the spread of the pandemic, on 18th March, the NRAI advised its 500,000+ member restaurants to shut down dine-in operations. On 23rd March, the association wrote to the Finance Ministry, asking for a bailout package. “We also need to protect our businesses from total ruin. It is a matter of our survival. We need some urgent measures so that we live to fight subsequent battles for revival of the restaurant industry,” it said in its letter.
By March 25th, those restaurant owners who remained in service were inevitably shut following the 21-day lockdown announcement by the Prime Minister Narendra Modi. Fortunately, heeding to the government’s appeal to keep the payroll on even during such difficult times, many hotel chains and restaurants decided to not cut salaries and send the staff on paid leave. As it stands right now, the Indian food service sector – much like the world’s – is staring at a big economic contraction that desperately requires government stimulus for a revival. How quickly will it gain its composure, how many jobs will be lost, and what would be the collective loss of the industry – these are key questions that remain crowded with uncertainty and ambiguity.
A Lot Is Happening in the food industry
Even with COVID-19 significant spread, not everyone went into paranoia. Many big names have stood up to take control of the situation in their own ways – to not just keep their business alive but also to serve the communities better. For instance, Subway has reduced the franchise royalty payments by 50 percent. The world’s largest restaurant chain is also supporting its thousands of franchisees with rent abatement, reduction, and deferral. In addition, alongside its franchisees, Subway is also helping feed children, as well as assisting the first responders and healthcare workers.
Similarly, many restaurants and retailers have now started focusing on curb-side pickups. According to Adobe Analytics, buy-online-pickup-in-store orders have increased 87 percent YoY between late February and March 29. Quick service chains like McDonald’s are improving their takeout facility and drive-through services, decreasing their waiting time and frictions to deliver customers a better experience. There are also some restaurants who have opted for third-party food delivery services; although it’s far from an ideal choice, way away from mass adoption, owing to its impact on the margins.
So, while we’re seeing business owners in the food industry go through economic challenges, we’re also witnessing great examples of new initiatives, community-building efforts, and a collective and empathetic stand to fight COVID-19 together.
Immediate Measures (And a Better Dawn)
To tackle this pandemic effectively – and survive its aftermath – the food business owners certainly need to adopt several changes for growth and sustainability. Of course, executing infrastructural and operational changes won’t come easy, especially for those who lack the resources and expertise. But the need of the hour demands such measures, rendering their optionality, crediting them as something essential.
1.Stricter hygiene and food safety policies
Recently, Swiggy and Zomato introduced a ‘no-touch’ delivery option. The effort is in part to adhere to higher safety and hygiene guidelines approved by the Ministry of Health and Family affairs to fight COVID-19. “We are especially emphasizing best practices of how to handle food packages to ensure safe, and hygienic delivery,” said Deepinder Goyal, co-founder and CEO of Zomato.
Other food outlets and solution providers are following suit too. Restaurant owners are already figuring out ways to effectively showcase their commitment, to the clients and customers, towards food safety and hygiene. We’ll eventually be ushered into a new era where there will be a renewed focus on the cleanliness department; there would be stricter policies around getting food-safety approvals. Innovative solutions would be deployed.
2. Partnerships and Associations
Uber has partnered with BigBasket to deliver essential goods to the customers. It’s an unlikely partnership. And it’s only one facet. Many partnerships are happening already to smoothen the curve between demand and supply. Businesses are partnering with nearby restaurants to share kitchen space, resources, staff, and supplies. Pop-up restaurants are becoming quite popular as well. In addition to partnerships, the need for the association is equally high. An association or community body – like NRAI, which has been at the forefront of leading the change in the industry – is highly required. This is especially for the small restaurants and standalone food businesses who need their rights protected and well-being contended for.
3. Food delivery, pick-ups, and drive-through
Much like work from home, food delivery, pick-ups, and drive-through have found new respect and legitimacy in the market in this pandemic. QSRs are focusing more on these models. This must sustain at large scale, even beyond, over the traditional dining-in option. Food businesses should employ more people in the delivery department. Restaurants should build their own delivery network rather than relying on any third-party. And their overall infrastructure must adequately support the pick-ups and drive-through.
4. Smarter menu and offerings
Food outlets are limiting their menu, offering fewer options. They are serving items that are easy to prepare and could be catered through the existing supply chains. From lavish dishes, their focus has shifted to local and healthier foods that could be made available despite the market-wide lockdown. The trend for a healthier menu has been consistent for quite a few years now among restaurant owners. In the aftermath of coronavirus, this will become even more prevalent. Healthier recipes that add to one’s immunity system will inevitably take the center stage. Simpler dishes, sourced through local raw materials, as takeout will find more appeal.
5. Advanced kitchen techNOLOGY adoption
Food technology has been making the right noise over the years. Those who betted on it ahead are likely enjoying higher cooking efficiency, safety and cost optimization at present. However, experts believe that we’re at a time when the adoption of advanced kitchen tech would be much higher and rallied behind. Cleaning bots and pre/post-cooking automation will gain prevalence. Technology will help with SOP adherence, also making the workplace safer. The highly labor-intensive work would be shifted to automation. The idea of “we always do things this way” would be dismantled; newer processes, solutions, and infrastructural equipment would be adopted in the coming months.
6. Innovative Marketing
These are different times that demand different marketing strategies. The shift is already evident with food business owners going away from the redundant flash of “at low price”. This is one of the few times that Indian consumers aren’t price-conscious but rather more focused on quality and hygiene. They are ready to pay high for the delivery and packaging provided they are assured of food safety.
“We have seen a drastic increase in users searching and making decisions based on the hygiene features on Zomato. We are seeing that consumers these days are wanting to ensure that the sanitation standards of the restaurants are at the highest possible level,” Zomato said in one of its email regarding ‘Zomato Hygiene Audit’. Rival Swiggy is now labeling partner restaurants “Best Safety Category” for checking the temperature of the professionals in the kitchen, as well as the delivery staff.
Such messages should be transmitted through clear marketing campaigns to reassure customers about the safety and hygiene maintained by the food business owners. In the coming months, live streaming of the kitchen and food preparations would become more mundane. The F&B industry will collectively work out ways for higher transparency and visibility in different areas – right from raw material procurement to the final stage of delivery.
The STR Mantra: Survive, Revive, and Thrive
A lot of measures are being taken by the food business owners to combat COVID-19. Each will have seamless after-effects in the aftermath of this pandemic which will hopefully cushion the economic contraction, bringing the industry on track as quickly as possible.
The key is to work together along the line of a simple mantra of surviving, reviving and thriving. The on-going steps taken by the businesses in the food sector will help many survive. The cascading benefits of these steps would help the business owners revive. Following, the steps should be refined and mass-adopted for the entire industry to thrive. Indeed it’s a long way ahead. But the important thing is to be empathetic, support each other and never stop innovating. People won’t stop eating. Their behavior will just change in the post-coronavirus world. Businesses must adapt.