Post Corona food schenes- I am no champion on this topic. But that doesn’t stop me from being opinionated- does it? I am writing this blogpost in such a time when, forget about restaurant food, you can’t even go out of your home. It’s probably day-42nd for the home-quarantine during the Coronavirus outburst and honestly, I’ve lost the count of days. Now you may ask me a very simple and valid question- why am I writing on these places in this turbulent time. The answer, my friend, is quite simple. One day, someday, this too shall pass and we’ll come back stronger. Life will be happier and people will actually look forward to seeing others.
And I hope people will stick to their (so-called) new-found passion for food. And then, my friend, this article during corona lockdown, will come in handy. And lastly, we are content writers, even if we don’t survive this state, the content on Mohamushkil will stay forever.
Remember our regular lives? Yes, the one we used to criticize in the pre-corona era. Where come whatever may, we at least could go out and meet friends. we could see other human beings? I am talking about that era. The service holders always wanted some holiday and work-from-home schedule, busy businessmen wanted to have some time for their passion and kids wanted the schools to grant them a holiday. Environmentalists wanted cleaner air, we wanted a road with less traffic. And probably somebody, up there, took our wishes a bit seriously.
Among many other businesses, the food & beverage industry is one of the segments generating massive employment. And it’s an open secret that we love food. And more than the food, we love the overall experience- socializing, meeting others, to basically feel happy. So, in this article, let me check whether to eat-out -or-not-to …. in the post COVID scenario.
When did it start?
corona outbreak was first said to be identified in December 2019 in Wuhan province, China. WHO declared it as a “public health emergency of international concern” on 30th January’20 and as Pandemic on 11th March’20. Symptoms include fever, cough, fatigue, shortness of breath, and loss of smell. And sadly, no vaccine has there to stop it- as on date. Countries have opted for lockdown including India and the ripple effect has started. As we said, the F&B industry is one of the most human-centric industries. It’s supposed to be a place, where people go and space their disposable income, and thus it doesn’t qualify for an essential service. But there is a large number of ancillary industries that have grown around it. And we’ll discuss them in detail.
Please check the dashboard provided by WHO … here
Running a food joint
Honestly, running a food joint is not as rosy, as it’s presented. From a lumpsum real estate rental to a huge manpower cost- many restaurants do not really make the net margin as much as we perceive them to be. To make things worsen, please top it up with the volatile and seasonal business and steep electricity bills. As my friend Abhishek Rungta says, “Every entrepreneur is lonely and fighting his/ her lone battle”, running a restaurant business is no exception. Still, passion and love for food push them to go for this. And whether we believe it or not, getting an investor is not that easy in India. Most of these places rely on the daily counter and delivery sales and that’s precisely where this pandemic hit them.
To eat out or not?
I am a self-confessed glutton. And honestly, I am someone who likes everything from street food to places serving novelle cuisine. But after spending this 40+ days at home, this question has started bothering even me … I was talking to my friend Amit Halder, who single-handedly runs a cozy cafe named Cup-e-Bong. And he had given some strange insights.
Initially, when the delivery aggregators started operating, there was a rush of online food orders. But slowly something changed. Online orders started to become less frequent, and that too from mostly friends or acquaintances. Now, whether it is because of the fear or because of the diminishing disposal income, it is a subject of much debate. Even a few people think that people have become extra cautious and that had hit the spending pattern of the common man. In earlier days, eat-out decisions were taken impulsively. even I have done so. I used to frequent coffee shops just to spend some time. But in post corona days, I have changed it. I tend to meet them via an online chat platform like Zoom or Google Meet and have an adda. As a result, I am saving my money from the coffee shop bills, but honestly, those coffee shops are losing a good chunk of business.
Is real estate the business killer
Siddhartha Bose is someone whom I look up to– as the co-founder of the Bengali restaurant chain Bhojohori Manna, and also as an industry senior. And he seemed worried- honestly. “Running a lean business is the need of the hour,” said Siddhartha da and he actually prefers to stay low for the time being and have a wait-and-watch strategy. And as per him and few other business owners, Real Estate cost is going to be the business killer. Most of the restaurants are set up in rented premises and real estate rental is not really low in our city (or any city in that matter). The landlords are not really in the mood to let go of the secured income even when the business is (almost) zero. But then how can we blame them? For a conservative Indian, income-from rent is one of the lucrative and secured income sources.
Many restauranteurs today are checking out the hybrid model of a small fixed -rent plus revenue sharing with the landlord and for sure, renegotiation is going to take place for multiple properties. While many shopping mall owners are showing a positive mindset towards this step, it might not be the same from standalone properties. But the future is seriously unclear.
But what about the manpower
Over 5 million (50,00,000) people are employed in the F&B business. And as per NRAI, over 2 million job cuts will take place in the post-corona food & beverage era. Believe it or not, in around 5L restaurants that NRAI represents, this is the figure that is being feared to be true. Sounds inhuman and cruel? It’s no secret that securing own family becomes the priority in dire times. And for a small business owner, shutting down the business for some time seems to be a better option than pumping in funds. Today, hardly any restaurant has the cash reserve to pay full salary to its employees with many months of zero business. And apart from direct employment, if we consider the small suppliers and the support industry, many many more body bags will be needed.
Also, please do not forget the huge outdoor catering industry, which primarily thrives on freelancers and is a somewhat unorganized sector. From specialty cooks to cutlery rentals, if the public gathering is stopped in the post corona era, this industry will probably take the biggest hit in the entire F&B scene.
https://yourstory.com/2020/05/restaurant-industry-job-loss-coronavirus
Operational change
Now, this is the grey area that plays one of the biggest roles in this business. Sunando Banerjee, the co-founder of Hanglaatherium and Foodka Series, is one of the known personalities. According to him, the procurement pattern has changed drastically. In pre-corona days, many small and gourmet restaurant management preferred to buy the key ingredients themselves from the market. For example, buying garam masala from the wholesale spice market is a matter of pleasure. And not only it ensured a better business deal, but also a check on the quality. But in the post COVID era, this purchase is done via the supplier or some third party mechanism. Moreover, raw material prices have sky-rocketed, wherein pricing is impossible to change. and the result? A steep dip in gross margin.
Many persons including myself do not believe in contactless dine-in. But in the new age, government laws will ensure a specific distancing between tables. So, I won’t be surprised if I see a 30 seater restaurant become a 15-18 seater eatery. And this point is emphasized by Sagar Daryani, co-founder of Wow Momo. As per him, masks and sanitizers will be part of your restaurant tables in the near future. And one should not be amused to a health screening while entering a restaurant or random temperature checks. Also, social distancing will be there in the kitchen as well. So, a 10 person kitchen might get reduced to a 6-7 person kitchen and in turn, a more concise menu and set-meals might be the future.
Food aggregators
Now let us talk on probably the only segment that is doing good, in fact great, in the post COVID scene. Yes, the food aggregators. Many are under the assumption that food aggregators are the knights riding bikes. And the F&B industry is moving towards this region. Honestly, I have my own reservations against this model. While a delivery-only joint may save on the infrastructure cost for the sit-out and the respective bills, they’ll have to pay a good sum as the operational commission to these aggregators. So, whatever would have been the operational sot (around 26-35%), a chunk of that is already being paid just for delivery.
Secondly, as per a few restaurateurs, these apps are diluting the brands, at the price of a comforting cocoon. Don’t believe me- okay. Let’s play a game. How often do you order from your smartphone using your food delivery app? Are you very very specific on which restaurant to order from? Or you are one of them, who first check the discounts offered or the delivery time? You don’t have to tell me the answer, but start thinking about yourself. Consumers today are less particular on restaurant names and becoming prone to better deals. And in the post corona F&B world, this trend will only rise.
We don’t know whether we’ll witness the zonal collective self-delivery mechanism. Please imagine, 2-3 small restaurants joining hands and running their own centralized food delivery scooters
Cloud kitchen and home chefs
But there is one thing, almost everyone is sure of. And it’s that the era of cloud kitchens is arriving. But what is a cloud kitchen? Let me try to talk about it in layman’s language. Imagine a restaurant with no sit-out or take-away. the food is prepared in a professional setup, with a team of competent home chefs or professional team, and delivered mostly via food delivery apps. They save on the sit-out infrastructure costs but are entirely dependant on apps like Swiggy/ Zomato etc.
Going forward, people will have a phobia for dining in restaurants or public gatherings. And ordering the same food from a cloud kitchen and having it in the safety and comfort of own home will be a new trend. We may even witness a restaurant converting its sit-out area into a shop for selling essential goods and groceries. Home chefs will have an edge, because of the trust and hygiene factor. But I personally feel, bulk production by a home chef is quite difficult. We, as Indian customers, still believe in impulsive ordering and not pre-ordered planned meals. And it happened many a time, that I’ve gone to have just some biryani and ended up with Kebabs and phirni as well. But then, I consider myself as an alien.
Marketing for F&B business
This is another area, everybody is very very clear about it. In the post-COVID era, the primary mode of marketing will be on digital platforms. Influencer marketing will, in all probability, reshape itself into content-creator-marketing models. ATL marketing will be there, but the fund size for that will take a bad hit. In the pre-corona era, the most focus was given on the product, food taste, presentation- and things like these. But now, the safety and security aspect will play a major role in F&B marketing campaign. An emphasis on the contactless mode of work will be looked upon heavily. Restaurants accepting digital payments will be the preferred choice for many. But will it take away the simple joy of eating out, Socializing, or meeting friends? I don’t know myself.
But all I can hope is that the economy bounces back to normal state soon. And, I also believe the government is thinking about this with topmost priority and will come out with a solution very soon. So, let’s all hope for a much positive post-COVID era and pray for our beloved F&B industry.
Bon appetite !!!
I can be reached at 9903528225 / indrajit.lahiri@ymail.com
