F&B Industry - Limping, Jogging or Running Back to Life?
“So wake me up when it’s all over, when I’m wiser and I’m older” . Most of us would be familiar with this highly popular track from Swedish DJ and record producer Avicii. To be honest, it always gives me goosebumps when I hear this track and that’s because there is a latent, yet powerful sign of hope & optimism embedded in the song. Well, as a stakeholder & component of the country’s F&B industry, I do find this track as an interesting & appropriate description of the current times wherein the wake-up call for the industry is nearing and we definitely are wiser & more experienced than ever before.
After a deep & troubling phase of lockdowns, restrictions on movement, low consumer confidence, supply chain disruptions etc. the F&B industry is now seeing green shoots as most parts of the country are in the final stages of the unlock phase. Undoubtedly, it has been a tedious & stressful time (not that it has completely abated) for F&B entrepreneurs across the country but there are signs that consumer confidence is gradually coming back and the way most F&B operators have adopted & metamorphosed themselves to align with the new normal, the prospects look brighter.
However, for any business operation, speed/agility is of critical importance and F&B businesses are no different. While it is encouraging to see consumers coming back to dine-in and a consistent increase in takeaways & delivery orders, there are considerable challenges when it comes to maintaining a healthy income statement amidst elements like incompatible rents, manpower availability, increasing supply chain costs etc. Additionally, the risk of lockdowns/restrictions as a result of news like the emerging third wave of infection in Delhi & volatility in the number of infections looms large over this industry in the near future.
Here are some interesting emerging trends that we are observing in the F&B industry and we are certain that as the whole country awaits a vaccine for this infection, these trends will dominate the industry and business operations at large -
Transparency & Hygiene Is the Only Key - This is nothing new but in my humble opinion, it is more important now than ever. The one thing that I wish to explicitly mention is that it may not be enough to just bring impeccable hygiene in your business operations but communicating the same to your patrons, employees and general audience at large is highly critical.
A Tech-Centric Customer Experience Is the Essence - As customers have started going out to dine & get together with friends/family etc, it is indispensable that this experience has the lowest sense of risk/fear when it comes to health & safety. This can only be made possible with the adoption of technology in order to keep physical contact as minimal as possible. Hence, restaurateurs need to optimally balance a world-class dining experience by adopting risk-mitigation procedures
Focus on Strengths & Doing What You Are Best At - Again, this is old business wisdom but rarely implemented effectively. I humbly believe that every F&B chain or even a standalone outlet that develops strong equity over time, creates and communicates a certain X factor (could be anything including the menu, service, infrastructure, etc.) that attracts customers. At this time, it is recommended that the restaurateur focuses on that X factor that pulls customers because the only reason a customer is willing to return to normalcy is to live the experience that he/she has been unable to achieve in the past few months. Hence, if there is even a slight lack in meeting the expectations of a customer when it comes to that X factor, the repercussions can be negative.
In the past few months, the F&B industry (one of the hardest-hit segments and minimal government support in the form of any stimulus or bailouts) has seen reasonable volatility across demand and supply scenarios. As a result, there have been unfortunate casualties & early signs of consolidation are visible. However, we can confidently say that we are learning and getting better with every passing day and the situation looks brighter as compared to the early months of this pandemic. At this point, the best thing is to hold on tight and stay focused on the strengths and generating positive cash flow with optimal resource management.