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Covid-19 Impact On Food Industry : Food business operators optimistic of regaining consumer trust

By Retail4Growth Team | May 22, 2020

Pre-order and takeaway will be the new norm; delivery-driven brands might recover faster than dine-in brands. food safety and hygiene will replace price as the biggest differentiator in the future, say food business operators

Retailers Association of India (RAI) in association with the National Restaurant Association of India (NRAI) hosted a webinar titled ‘Future of Food Business: Reviving Consumer Confidence’ on 22 May, as a part of its ongoing ‘Coping with COVID-19’ series. The panel comprised food business stalwarts including Nitin Saluja, Founder, Chaayos; Pratik Pota, CEO, Jubilant Foodworks Ltd.; Riyaaz Amlani, CEO & MD, Impresario Handmade Restaurants; Sagar Daryani, Co-Founder & CEO, Wow! Momo Foods Pvt. Ltd.; Zorawar Kalra, Founder & MD, Massive Restaurants. The panel was moderated by Anurag Katriar, President, NRAI; ED & CEO, deGustibus Hospitality.

Speaking out the biggest challenge all businesses are facing Nitin Saluja, Founder, Chaayos said, “The customer sentiment right now is driven by fear. We, as an entire fraternity, need to figure out how to tackle that fear as best as possible.”

Offering a solution to the big question Zorawar Kalra, Founder & MD, Massive Restaurants said, “We need to move away from using the word contactless dining to stress-free dining. The only way to get the consumer’s confidence is to let them know that ‘we have your back’. Customers need to be assured that eating at a restaurant is actually safer than eating at home since we have more checks and balances in place.”

Offering a different perspective Pratik Pota, CEO, Jubilant Foodworks Ltd. said that the crisis was not just a demand crisis but also a supply crisis. “Supply chains have been disrupted; inventory shrinkage is bound to happen. There’ll be supply shrinkage along with demand pullback,” he said. Pointing out the silver-lining though he added, “The fundamentals and the potential of our category haven’t changed but it is a matter of time I would say that 6-9 months would be a good time frame to get back.”

Spreading optimism was Sagar Daryani, Co- Founder & CEO, Wow! Momo Foods Pvt. Ltd. who said, “I believe that India will be the fastest country to bounce back.” Speaking about the change in the way of operating, the entrepreneur said, “Our entire business models are going to change and that’ll change the business models of the entire ecosystem.”

Giving his opinion on the situation, Riyaaz Amlani, CEO & MD, Impresario Handmade Restaurants said, “Currently, we are battling with the sentiment which is at best skittish. We are seeing a lot of pent up demand. There’s a case to be made that there is revenge buying but there is also going to be a lot of tentativeness. You have to know your restaurant well, how you’re going to fill the hole in people’s souls.”

Ending the discussion on an optimistic note, Anurag Katriar, President, NRAI; ED & CEO, deGustibus Hospitality said, “I don’t think this industry will fail because dining out is the one of the most natural things that humans do. Having said that to win over consumers we will need to take a plethora of ‘confidence-building’ measures. Every stakeholder in this ecosystem must realize that in these difficult times in the post-COVID era can be conducted on the older terms.” 

Key takeaways from the session:

Changing Consumer Behaviour

  • As consumers become more discerning about hygiene, they will move away from street food to the organized sector.
  • Consumers who were hesitant to adopt digital and delivery are now embracing the two.
  • Food safety and hygiene will replace price as the biggest differentiator in the future.

Effects on Industry

  • Year 2020 is going to be more about consolidation.
  • There is going to be a new era of pre-order and takeaway as in other countries.
  • Delivery-driven brands might recover faster than dine-in brands.
  • Recovery to come in 6 to 9 months.
  • A lot of small towns have come back to significant delivery growth.
  • The volume of delivery is less but ticket size is increasing as most ordering done during the lockdown is for the whole family.
  • Cash-Based Deliveries will be affected.
  • Agile businesses will come out as winners. 
  • Collaborations between businesses are going to be common.
  • Instances of Mergers & Acquisitions will increase significantly.
  • Delivery revenues will gain a lot of prominences, even for experience-driven businesses.

Advice for Businesses

  • Technology-driven interventions are needed to reduce the amount of human contact in the consumer cycle. 
  • Recalibrated conversations with aggregators about commissions, discounts, delivery experience of the customers are needed.
  • Radio silence is bad. Communication from brands is extremely important. Brands must reassure the consumers and retain their trust.
  • Consumer sentiment is the primary thing we need to fix the dine-in scenario.
  • Use social media to stay in touch with consumers.
  • Don’t run after micro-trends. Instead, learn what your business is all about.
  • Health, hygiene and happiness are central to the recovery.





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