“In my 30 years in the restaurant business, I have never seen anything like this.”
The P700 billion foodservice industry is one of the most affected industries when the COVID19 crisis unexpectedly hit the country. Almost 2 million direct work force in the industry, potentially losing a quarter of the work force becomes a looming reality, with the businesses losing close to an estimated P50B, during the one and a half months community quarantine period. The bigger universe, the P2.2 trillion tourism industry, which includes rooms and travel and other related businesses, may have similar financial repercussions, but that’s another high impact story. Where’s the silver lining, after the #flattenthecurve and #fattenedcurves? What happens to all the displaced workers? How do we react to this crisis, if and when, it happens again? What learnings do we get from all these, so we can rise up, stronger, wiser, and better? Time to revisit the 6Ps, to chart our new strategy, and work on our new normal. Believe me, we will never be normal again.
“The food business is, and will always be, a people business.”
PEOPLE. A street stall or kiosk manned by 2 staff members on the average, or a casual dining restaurant with a workforce of 20 employees, make up the estimated combined 2 million work force directly hired by the industry. How many will lose their jobs? What will happen to those who will keep their jobs? When push comes to shove, some of us discover, or rediscover, skills that we never thought we could do or have. During the crisis, we found ourselves doing work from home, multi tasking, and doubling up as a team leader and a follower at the same time. Some of us were able to step up to the challenge, and sadly, some of us simply faded away. That’s when we separate the wheat from the chaff, so to speak. As we streamline the organisation, the normal thing to do is keep the good ones. And the good ones are the ‘always ready’ ones. What do we do when we resume operations? Train, train, train. Training for crisis is like keeping medicine in your medicine cabinet, with the hope that you won’t have the chance to use them. What happens to the skimmed fat? With the hope that other industries will eventually need their skills, the least you can do is to provide them an honest assessment of their capabilities, and possibly open doors of opportunities for them, before they’re given the pink slip. And will the face mask be the new norm?
“The menu is the spirit behind the restaurant business.”
PRODUCT. Some menu changes are related to take out and delivery. Prior to the crisis, take out and delivery contributed an average of 10-15% of the total sales revenue. What happens when the business relies on 100% take out and delivery? Making our food and beverages friendlier to offsite dining requires not just packaging changes, but also requires changes in portioning size, instructions to achieve “onsite quality”, and the guest experience is approximated to be similar whether customers seek physical or virtual contact with the business. Convenience and speed will still drive the menu development process, with consumers’ renewed perspective on health and safety. How was it prepared? Who prepared it? What ingredients and raw materials were used in preparation and in cooking it? New ways of raw materials and supplies sustainable sourcing will prevent future food safety crisis and eventually protect the health and wellness of the customers. And don’t forget the buffet spread; time to rethink the business model and its food safety measures.
“The customer’s value perception is your reality.”
PRICE. What can your P99 buy? Will there be a proliferation of super duper value meals? Consumer behaviour will perennially be value driven, especially for an emerging market like ours. This time, value perception will be matched by reduced spending power, which will be heading down south as we go through a recession, whether real or perceived. No one wins in a “price war”, which will be the most natural thing to engage in, to attract customers. Resist, as much as you can. Add value rather than reduce prices. The way we source our supplies and our ingredients will never be the same again. Renegotiating with current suppliers and finding new suppliers will be an entirely new ballgame.
“As Grab and Lalamove dominate the fulfilment provider business, new players such as Palengke on Wheels leveled the playing field during the crisis.”
PLACE. With 92,000 outlets as of 2018, and 50% is accounted for by street stalls and kiosks, it would be safe to assume that the effects would cut across all categories and segments of the industry, from a shawarma stall in a bus terminal to a buffet restaurant in a mall to a fine dining Japanese restaurant inside a hotel. Technology and accessibility will enable the industry to fast track the recovery process. Outsourced partners, with a closer look at the extended practices on sanitation & hygiene, will help those establishments with limited resources and technical know how. Some locations, both good and bad, will be up for grabs, and business development’s speed on looking for new franchisees and new sites will be challenged.
“Communicate. Communicate. Communicate.”
PROMOTION. When KFC’s finger licking good campaign was sensitively given the backseat during the quarantine period, we know that communication will play a major role in the post crisis recovery process. Taste, variety (or new products) and value for money, will still be message staples in the foodservice campaigns. However, consumers will take a closer look at how sanitation and hygiene is being done, both in actual and virtual worlds. And that will keep operations and marketing busy cooperating on these issues. Social media platforms will be maximized and will compete with current apps being used by consumers. Check out Mama Lou’s Italian Kitchen’s delivery page in Facebook, as they add another platform to their way of reaching out to their clientele.
“Foodservice is service redefined during the pandemic crisis.”
PURPOSE. I talked to some restaurant owners who wanted to open during the quarantine period, torn between having sales and having their employees get their fair share of compensation for their daily work, the more compelling reason still lies with their original mission to serve their guests. Of course, the initial mandate is to close all restaurants. When the opportunity to resume operations, knowing fully well that the sales will not even come close to their regular dine in sales, and that there’s a risk on manpower’s fluctuating attendance (due to checkpoints, transportation, etc), they go back to their WHY. Why am I in the foodservice business? Why do like to do what I do? Why do I enjoy the guests’ patronage of my concept? The answer will cement the operators’ dedication and commitment to serve in our industry.
We know that there are already many casualties in the battlefield while we’re fighting this pandemic. But we don’t know how many from our ranks will be biting the dust when we resume our operations. One thing for sure, we’re all in this together. And as we pick up the pieces for ourselves and for our respective teams, let’s rally the other industry players so we can lessen the casualties, and hasten the healing process, and eventually achieve profitability and sustainability.