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Digest OPINION: The Future Of Restaurants In The Philippines And How F&B Industry Can Bounce Back

OPINION: The Future Of Restaurants In The Philippines And How F&B Industry Can Bounce Back

OPINION: The Future Of Restaurants In The Philippines And How F&B Industry Can Bounce Back
By Elaine Nuestro
By Elaine Nuestro
April 24, 2020
With malls closed and physical distancing in place, how can restaurants survive the economic setback brought by the deadly virus?

It’s still difficult to imagine a post-COVID world, as the entire planet is still battling the pandemic. The future looks bleak and industries might crumble, particularly food and beverage. Although some continue to operate via delivery and takeouts, majority of the micro, small, and medium enterprises (MSMEs) are finding it difficult to compete with household names and big restaurant groups. Admittedly, even reputable companies struggle to adjust to a wildly different dining scenario.

Prior to this, the F&B industry was growing at a rapid rate and was estimated to have amassed more than PHP 600 billion in revenues in 2019 alone. We have also witnessed an increase in restaurant openings, with Makati, BGC, and Alabang being a hotbed to new business ventures. But with the pandemic that has forced many to shut their doors, it's safe to assume that we will see a far greater dip in revenues this year.

Restaurants during COVID-19

The first hurdle that most owners, if not all, faced when the Enhanced Community Quarantine (ECQ) had started is how to sustain the livelihood of their employees. An estimate of over half a million employees in the F&B sector are now greatly affected and receive no income. Although a subsidy program was rolled out by Department of Finance to support income-less workers during ECQ, a huge number of restaurants are yet to receive their share of the promised subsidy as the Department of Labor and Employment admits that the fund is rapidly depleting.

To address the new normal way of doing business, adjustments have to be made such us adapting to a new business model — putting much focus on takeout and delivery services. Agreeably, we are now seeing this, as ready-to-cook meals are currently being marketed (Jollibee’s frozen ChickenJoy in groceries, Manam’s sisig and kare-kare in convenience stores, take home ramen kits from Mendokoro, and the most recent, Potato Corner’s frozen fries) as well as influx of sales in third party delivery apps such as GrabFood and FoodPanda.

To further optimise delivery sales, restaurants must look into shaping their menus based on which items are the most ideal to sell via delivery. This includes analysing where to get the best ingredients given the ECQ, managing inventories, figuring out ideal portioning and packaging, and making sure that the overall quality of orders can withstand delivering conditions. 

As for Wildflour Group, Owner Ana de Ocampo shared that the crisis has forced them to be more "creative" in sourcing raw materials. They have also taken a lot of considerations in conceptualising their current delivery menu.

The closure of restaurants and strict ECQ implementation has also hampered farming and fishing activities outside Metro Manila. With less stores to supply, farmers in Northern Luzon, particularly in Region 3 and Cordillera Region has resulted to discarding tons and tons of produce that remain unsold due to the decrease in demand. Of those that were sold, the farmers had only received significantly low payments, a lot less than the usual market price. Logistics also proved difficult for these country folk, as less and less vehicles are being allowed to travel across cities and delivery trucks also face long queues on checkpoints which in turn decreases the quality of the produce being transported.

During a health crisis, ensuring the quality of food production is important, as sanitation is more crucial now than ever. Limiting the contact between food and those who prepare it is vital, thus reimagining the production process is a key step. This stricter system has been utilised by many, including Wildflour Restaurant where wearing masks is imposed as well as frequent temperature checks. For the Foodee Global group, Eric Dee shares that they have streamlined the cooking process to lessen the contact between food and personnel. In The Moment Group, Abba Napa tells us that all of their staff undergo health checks before coming into work.

Every team member must complete a daily health check before entering our shops. Whether in the kitchen or on the floor, our lean teams practice social distancing of atleast three feet, wash their hands every 30 minutes, and disinfect themselves regularly

Abba Napa

Delivery services also play a big role. Audrey Tanco-Uy of Bizu pointed out that immediately after the ECQ had been implemented, they had put effort into building their own fleet of deliverymen which in turn helped them manage deliveries further as well as ensure the sanitation of their products being delivered. Meanwhile, for restaurants who cannot build their own delivery service, the burden now lies on third party food delivery apps such as Grab, FoodPanda, and Lalamove to ensure quality in service as well as maintaining the health of their riders.

Manpower is also in question as travelling to work proves difficult with the suspension of public transportation. To solve this, providing shuttles to accommodate employees must be looked into, while the option of housing personnel near their work location is also a viable idea. This can help workers feel safe during these times, as well as making sure that their potential exposure is limited to lessen the transfer of the virus.

Restaurants must also look into easier and reliable digital payments as more and more customers opt out of cash payments. Being able to provide a bigger outlet for payment transaction allows for a bigger audience. After all, you cannot sell if they cannot pay.

Post Quarantine

A drastic change in pre-crisis foot traffic is expected as patrons will remain fearful and cautious of returning to crowded places. However, Wolfgang’s Steakhouse Co-Owner Raymund Magdaluyo remains positive that the dine-in culture will not die, although it would certainly take time and a lot of adjustment to encourage diners to go back.

To make that happen, Eric pointed out that new SOPs must be put in place such as allowing more space in between tables, limiting person-to-person contact, instaling more sinks and faucets, bigger presence of rubbing alcohols, and of course, maintaining the health of their employees. Audrey also added the possibility of using digital menus in place of the usual plastic menus.

In as much as decreased sales are expected right after the restaurants open for business, the reality of high fixed costs must be confronted. The most burdensome of these costs are rental rates due to mall locations and other prime venues. Appealing for smaller percentage rent rates can help in the recovery of restaurants across the country.

Truly, we are facing a huge opponent today, one that is unprecedented in living memory. It takes not only lives but also dreams and livelihood. Even though it appears as if the end is far from reach, we will be able to surpass this as a collective unit. History has repeatedly taught us that food has the ability to bring everyone together, and it will again.

 

Quotes and data in this article were sourced from Tatler interviews with Abba Napa and Ana de Ocampo, and a Bounce Back PH digital forum

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