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Rethinking F&B as hospitality rebuilds

The heartbeat of all great hotels and independent venues, F&B outlets are a key driver of revenue, reputation, brand identity and joy. Edward Harvey, Director of F&B strategy and consulting company, Elevate, discusses adaptation, innovation and differentiation in the new post-pandemic reality No one in the food and beverage (F&B) industry could have anticipated that the pandemic would last this long. Although events of the last 12-plus months have spawned many challenges, as operators and industry leaders, we have a responsibility to drive satisfaction, revenue and profit, whatever circumstances throw at us.

From coffee shop regulars to high-end restaurant patrons, the pandemic has given rise to a different kind of consumer, one with different needs, desires and behaviours. And this is the starting point for the F&B industry to pause, reflect and reset, in order to service the new post-Covid customer with a relevant and adapted business model.

In the early days of the pandemic when masks became a permanent reality, outside seating was the only option, and home delivery took on newly urgent meaning. Many people in the business were scrambling to make decisions that could help turn a disaster into some form of smart thinking opportunity. We were all convinced that this would only require a short-term fix, with the idea of a second, third or further wave unimaginable.

Businesses that quickly adjusted to changing consumer behaviours were able to mitigate the impact of the pandemic and continue to operate, albeit breaking even at best. Those that didn’t rethink their business model have, in many cases, gone out of business. This was also exacerbated, to an extent, by the reluctance of some landlords to review rent and leasing agreements, or other costs associated with an F&B operation.

Meet your (new) customer

Consumers are not the same people they were in 2019. They interact differently, communicate differently, purchase and consume differently. To complicate matters, 2019 was a bumper of all bumper years. So, in establishing a new normal, we need to forget 2019 and aim for a composite average of the three years prior as a marker for business.

While the majority of consumers are still wary about dining out from a health and hygiene perspective, the propensity to spend has increased. The overriding sentiment is, ‘it’s time to go out and treat myself because I haven’t had the opportunity for months’. This desire will be reflected and satisfied over the next year as we catch up on life and return to enjoy all the things we’ve missed doing.

It’s not merely a case of booking a table at our favourite dining spot. There is a more mindful approach to dining emerging that’s rooted in the idea of togetherness. This could translate as family groups or friends and colleagues, but I believe that there will be fewer classic dinner-for-two occasions. In the Middle East, communal gatherings have always been popular, but that circle will widen.

People have also had time to think and reflect on what they eat and enjoy. This has fuelled a rise in demand for foods and dining experiences that are mindful of the environment, that carry higher health and nutritional value, and that tap into the provenance of the ingredients. This is a challenge in the GCC where we import around 85 per cent of total food consumed; but it is an opportunity.

Consumers have also embraced the world of delivery, and this has accelerated potential for the dark kitchen model. I believe that even as we begin to venture out to dine once more, the delivery option is embedded in the general psyche. And there is also a clear link back to the issue of mindful consumption when it comes to packaging.

Cusp of revival

The UAE government is very much aware of the big picture and fully understands the role of F&B in driving the tourism and hospitality sector, and its broader economic value.

Within the industry itself, Q1 2020 saw the launch of the Middle East Restaurant Association (MERA), a non-profit Global Restaurant Investment Forum initiative designed to help connect, promote and support the region’s restaurant industry. We tend to be a very disparate industry, but with initiatives like MERA, which is supported by Dubai’s Department of Tourism & Commerce Marketing, everyone is coming together to sit in the same room and focus on what we need to do to move forward with a unified voice.

There is a general sense across the board that this is the beginning of the comeback. There is clearly pent-up consumer demand, but this is paired with a hesitancy about interacting with large groups of people in close quarters. Operators need to remain aware of customer concerns about personal space while still delivering an adapted yet memorable experience.

The smaller, casual brands like Subway are survivors, as people still have to eat, while at the other end of the spectrum, destination dining venues like Folly by Nick & Scott or Pier Chic are getting ready to crest the oncoming wave, buoyed by the recent announcement of a 100 per cent return to capacity. This heralds a comeback opportunity for established brands and noted dining venues, regardless of whether they are fêted for their food or location. The challenge is there for those operators who aren’t viewed as ‘necessary’ everyday dining or that aren’t deemed Instagram-worthy.

Remodelling business

Our industry is a very emotive one and this can sometimes overshadow strategic focus and thinking. Now, more than ever, having a thorough understanding of the market, the financial aspects and the new consumer mindset is crucial to success.

Brands still need to have representation in the market, even if doors are temporarily shut. In the past, dark kitchens were typically unbranded but with Covid on the scene they have started to develop their own brands. Why? As a customer, I don’t want to buy an anonymous chicken dish, I’m buying an experience. There is a whole raft of contributing factors that create consumer appeal, from brand identity and back story to the provenance of ingredients and culinary philosophy.

If you have a footprint that’s doing absolutely nothing, you won’t move forward. You need to communicate your message through aggregators who then reap the benefit, or market yourself directly to your target audience. Either way, you can’t simply wait for customers to return. Entrepreneurial businesses are parlaying the experience angle and renting out their spare kitchen space for third-party delivery options.

This dovetails neatly into the topic of loyalty. In the Middle East, there’s less loyalty than in other global markets. If you look at home delivery, for example, restaurants that have their own drivers can manage the customer experience much more efficiently. This can also help drive loyalty because, while a customer may use an aggregator for convenience, they are not ordering Deliveroo’s pad Thai, they’re ordering the pad Thai they love from xyz restaurant.

If you then apply this to upscale casual dining and beyond, this is where I see opportunity for the more bespoke travel or food delivery operators to make their mark.

Right people, right face

We also need to consider the human face of the industry and how to recruit talent back into the market. It’s simple enough to fill a vacancy but you need human intelligence and specific expertise to lock in the brand-offering and experience.

In the last year or so, the industry has been forced to let talent let go. Attracting those people back is going to be a challenge. A huge proportion of staff came into the industry because they needed a job, but F&B may not have been their professional background or even interest. Fast forward to 2021 and many workers feel they have been let down by the industry, so they are understandably seeking other opportunities.

We need to complement culinary offerings and destinations with teams of people who are qualified, capable, amenable and able to deliver an authentic experience. Attracting them back isn’t just about salaries; we need to take a more holistic approach and consider staff welfare, corporate culture and growth opportunities.

Out of the box thinking

One of the most exciting things to come out of the pandemic is the meal kit. This is a classic example of adaptation by brands that knew they had to innovate to stay relevant. Some brands went a step further and incorporated music choices into a dining theme or created a unique scent reminiscent of the bricks and mortar venue.

This type of creativity keeps a brand front and centre in the consumer’s eyes. It helps drive loyalty, which is incredibly important in a highly competitive market. Marketing strategy needs to do the same thing, to whet the appetite and entice customers to make a booking. Whether a diner walks through the door or orders online, the goal is 100 per cent conversion and a lifelong customer; and I think we're at the very beginning of the post-Covid journey in this respect.

The meal box is a hands-on example, but F&B innovation today also has to account for changing customer behaviour and how it impacts the dine-in experience. This is a new era of contactless interaction, from iPad menu orders and countertop devices to wearable tech such as Apple Pay.

This obviously requires capital expenditure, but is an inevitability fuelled by a new-look marketplace and consumer expectation. Point of sale systems are more than just order devices, they present a unique opportunity to get to know your customer, to data capture their preferences and dining habits; and build personalised connections that optimise future experiences.

The delivery of a tailored experience goes much deeper than simply asking a customer if they would like to begin the evening with their favourite drink. It’s about tapping into their desires, personality traits and lifestyle nuances to engage from the heart. If a server can connect with the customer one-on-one then this engenders trust, and once trust is established, you can sell anything.

Hospitality is not the knife and fork or salt and pepper, it's the cumulative experience from the menu, venue décor and service style to the language of communication and connection. The future of the industry lies in providing authentic, compelling experiences and hospitality that the newly adapted customer wants.


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