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Leadership Panel Discussion
Leadership Panel Discussion
1. How has covid-19 impacted the demand for the food produced by restaurants?
Considering the food supply chain, one of the most important sectors of the economy, it has
been seen that COVID-19 has an impact on the whole process from the field to the
consumer. In the light of recent challenges in food supply chains, there is now considerable
concern about food production, processing, distribution, and demand. COVID-19 resulted in
the movement restrictions of workers, changes in demand of consumers, closure of food
production facilities, restricted food trade policies, and financial pressures in restaurants
and many other food supplying chains.
Therefore, governments should facilitate the movement of workers and agri-food products.
In addition, small farmers or vulnerable people should be supported financially. Facilities
should change the working conditions and maintain the health and safety of employees by
altering safety measures. Food protectionist policies should be avoided to prevent an
increase in food prices. In conclusion, each country must realize the severity of the situation
and sometimes should tighten or loosen the measures according to the spread of the
pandemic. The supply chain also should be flexible enough to respond to the challenges in
the food supply chain.
2. What is the positive effect of Covid 19 on restaurant owners and food companies
and what effect has it had on people's orders?
With COVID-19 having altered – and still in the process of altering – the definition of
“normal” across the world, most industries are still scrambling to adjust. The effect on
the restaurant industry has been particularly dramatic. With restaurants and pubs
closed for sit-down service, many establishments are struggling to keep their heads
above water. On the other hand, places that are able to offer delivery and pick-up
options are seeing large increases in order volumes. Meal kit delivery services are also
seeing a major surge in interest. Online grocers such as Kroger, Amazon pantry, Publix
or traditional providers like Walmart, Tesco and D2C meal prep brands like HelloFresh
and Blue Apron are all witnessing a considerable increase in demand and order
frequency.
Similarly, people will also get used to ordering food online or picking it up at the restaurant
to enjoy at home with their family. It is precisely this demand that restauranteurs should
respond to. Most restaurants will realize (if they haven’t already) they need to have
an online ordering system in place in order to survive, and that it ultimately benefits both
them and their customers.
4. What do you think about the future of restaurants, post Covid in India?
The food services industry, which encompasses any establishment, including a vast number
of micro and small eateries, serving food to customers outside their homes, is on course to
post-Covid recovery faster than one would have likely imagined. The sector, which took a
massive hit in financial year (FY) 2020-21 due to the lockdown restrictions and Covid-
appropriate consumer behaviour, is not just looking to end the current FY with the size
more than double from last FY but also surpassing FY20 levels.
“One reason for the growth is the overall aspect of revenge shopping among customers
while as offices are opening up, people have started eating out. Even those who are working
from home are moving out during weekdays and weekends. However, families with children
have taken a much longer time to start going out in the recent past. The growth also
includes home deliveries to an extent. It helped us survive as well during the Covid period
and we hope to continue with it ahead. Luckily, we didn’t have to shut any of our outlets or
lay off employees,” Aseem Grover, Director, Big Chill Cafe, and Secretary, National
Restaurant Association of India (NRAI) told Financial Express.
As per a report by the National Restaurant Association of India (NRAI) launched on October
25, 2021, analysing the Covid impact on the industry in FY22 growth would likely be 11 per
cent higher than FY20 levels. Interestingly, the projected FY22 size of the sector will be the
highest in the past seven years.
The average share of food delivery in the revenue of food business operators was 10 per
cent before Covid which increased to 29 per cent after the first lockdown last year and
further to 33 per cent after the second lockdown this year. According to NRAI, the impact of
Covid shifted the needle of the food services industry towards the organized market that is
expected to have a 54 per cent share in the overall market from the current 40 per cent.
The food services sector comprises organised and unorganised segments. Dhabas, roadside
eateries, street stalls, etc., that operate without any quality control or sourcing norms fall
under the unorganised bucket. The organised segment includes organised standalone set-
ups and chained markets or formats with over three outlets in a country and scattered
across different sub-segments such as casual dining, fine dining, quick service restaurants,
cafes, and more with average spend per customer spanning from as low as Rs 50 or 100 to
around Rs 2,000. Restaurants in hotels is another category in the organised segment though
with a minuscule share of Rs 11,643 crore in the overall Rs 4.23 lakh crore size of the sector
during FY20.
Importantly, the government in March this year had extended its credit guarantee scheme
Emergency Credit Line Guarantee Scheme (ECLGS) in scope and size as ECLGS 3.0 to cover
businesses in hospitality including hotels, restaurants, marriage halls, canteens, etc., apart
from enterprises in travel & tourism, leisure & sporting and civil aviation sectors. However,
according to credit rating agency ICRA, while moratorium and ECLGS provided support to
the hospitality sector but the sustenance of the demand pickup in the recent months
remains to be seen as the impact of a potential fourth wave cannot be ruled out.