Strategies for Foodservice Brands Amidst COVID-19
The foodservice industry has not lived through a global crisis of such magnitude since World War II. Arguably even the greatest wars have not matched the impact of COVID-19 on the foodservice industry. Built on strong social values of sharing time together, during other kinds of crises the foodservice industry has offered a meaningful way for people to connect. Never before has the entire planet been asked to stay at home and avoid connection with others, challenging the most significant value foodservice operators can bring to the table.
With the pandemic taking its toll on global, national and small independent operations, no one is immune. Most brands are retooling their physical assets to focus on take-out and home delivery to stay alive.
To help operators remain relevant during this period of crisis, we are sharing a range of strategies the industry can implement immediately. We further validated these with consumers as part of a report and webinar that can be read and watched now.
As new industry research emerges on the impact of the virus, a study by Technomic has provided a glimpse into its impact, finding that North American consumer spending on foodservice declined by an estimated 45 percent from a typical week in February, with further planned reductions expected to come as the pandemic continues to grow. With the projected growth of the virus in the millions and no optimistic relief in sight until the second quarter, we will see a significant contraction of operators across the entire foodservice value chain. The Technomic study indicated that a staggering 70 percent of operators are concerned that COVID-19 will hurt their ability to survive before we see the curve of the virus spread flatten enough for people to emerge from physical isolation.
If we look at China as an example of how the foodservice industry has been able to respond as they emerge towards a new normal, we realize the impact on North America will be significant. According to Rabobank, the coronavirus outbreak may have cost China’s retail and foodservice sectors between 20 to 80 percent during the Lunar New Year week, representing a loss of $31 billion to $124 billion. The virus has also disrupted the supply chain, driving the cost of pork and other Chinese staples to new heights. However, there is a silver lining to the chaos. During the crisis in China, the food industry saw a 20 percent growth in food delivery, based on an NPD study with similar predictions for North America as more consumers work from home and need a break from home cooking.
At the start of the year we witnessed the growth of home-delivered meals as North American sales grew by six percent, with companies such as Instacart offering contact-free delivery of groceries and many other delivery services such as Grubhub and DoorDash following suite. However, irrespective of touch-less service, customers remain concerned that staff preparing the meals may be infected, especially in states with no paid sick days or other health benefits. It also remains to be seen if a shift to food delivery alone will save the foodservice industry, depending on whether the prediction for an early summer return proves to be true.
We are sharing a series of ideas to help the foodservice industry overcome some of these challenges, taking a consumer-centric perspective during the crisis and after we emerge from the pandemic. Many leading operators have sought to find opportunities in these challenging times by implementing some of these ideas. We have grouped our recommended strategies, leveraging our ideal Omni-Experience Model, through the lenses of structure (food offerings to take-home packaging), message (social and promotional) and process (journey, digital versus physical).
DURING THE PANDEMIC
The focus of foodservice operators during the pandemic is to continue to build patron sales and brand loyalty through a range of potential tactics. During the high point of the pandemic, customers will naturally be very fearful about contracting the virus as well as anxious about everything from job security to the sustainability of their businesses. On the other hand, patrons need to overcome the fatigue of cooking at home, which may be nuanced by either the boredom of working at home for long periods, the challenge of balancing workdays with caring for children who are home from school, or for those who are still physically going to work, the exhaustion of managing travel, childcare and physical safety.
The foodservice industry has the opportunity to address some of their customer’s pain points through strategies overcoming their fears and solving their needs for convenience and reward as part of the take-out experience.
- Take-home sanitized packaging: Identify on the packaging how the food has been handled, highlighting new safety practices, including staff wearing masks and gloves when filling the order. Also, consider take-home packaging that includes sanitizer sachets and potentially a security seal which the customer can tear away, ensuring the package is germ-free.
- Inner packaging that travels well: There is nothing worse than having sauce leak into a package and leaving a mess for patrons who are anxiously waiting to eat. Inner packaging that worked well for take-out may no longer be adequate, knowing the product may be delivered by a bicycle courier or shared ride service who are not always equipped to handle food delivery carefully.
- Restructure menu items: Not all food travels well and consideration should be given to menu items that do not diminish in quality when delivered to customers. Customers will most likely not reorder food if the meal arrives soggy or cold.
- Limiting hours of operation: For take-out counter service, restrict the hours of operation to evening or lunch, depending on when the restaurant has historically had higher sales (it’s not the time to try and grow your day-part strategy).
- Staff engagement and celebration: Initiate regular staff communication through social programs to celebrate staff achievements and help build morale. Link these activities to customer social initiatives.
- New delivery platform: As more foodservice operators shift focus towards delivery and take-out, it will be important to establish a robust and dependable delivery platform by leveraging staff resources that have been laid-off due to the crisis.
- Food safety communication: Identifying new staff food safety protocols on take-out packaging, the brand’s app, social media and in facility windows. For operators with more than one location, there should also be an ongoing connection between local news updates and the safety strategies that are being communicated.
- Community support: There is a great opportunity for foodservice operators to lend capacity to feed the elderly, those economically impacted by the crisis and health care professionals.
- Provide social meal sharing program: Integrate the ability to gift a meal to a group of friends to be enjoyed at the same time over video chat or social networks.
- Evolve the company app: Revamp your app or integrate new features that allow for more convenient ordering and delivery.
- Integrated health process: Hand sanitizer should be provided with take-out as well as at take-out counter.
- Regular testing: Staff working in the restaurant should be screened daily to determine their health status.
- Staff protective gear: Front-line and food preparation staff should wear protective equipment.
- Strict health stay-home policy: Strict sick employee stay-at-home policies should be in place with paid sick leave.
- Touchless home delivery: Integrate a touchless home delivery through the company app.
- Safe distancing: Introduce safe distancing markers and control the number of customers at the take-counter counter.
- Faster, more convenient take-out: With the growth of take-out, patrons are seeing significant delays in delivery. Integrate an app that reminds patrons to order early to avoid delays. Also, increase the speed of delivery by retooling the restaurant network. Consider partnering with grocery stores to combine deliveries for both efficiency and fewer customer deliveries.
- Explore new business models: Now is the time to consider a subscription home delivery program for customers who can order for the entire week. For companies with multiple banners, integrate the whole system to allow greater menu selection for customers.
THE END OF THE PANDEMIC
Once the pandemic has subsided and consumers are gradually free to visit foodservice establishments for dine-in experiences, it’s important to understand many of the anxieties brought about during the pandemic will remain for patrons. Following the end of the pandemic, the key strategy will be to recognize customers’ need to feel safe and protected against a second or third wave of the virus. Since customers are coming to a physical establishment, our strategies have focused on ensuring the experience is conducive to anxiety-free social gatherings. The majority of take-home strategies occurring during the pandemic will remain relevant and should form part of the go-to-market program. Many of the following initiatives could be initiated during the industry shutdown to be fully ready when social distancing programs and mandated quarantines are lifted.
- New social-friendly layouts: Food establishments will need to rethink their restaurant layouts to increase the amount of separation and still maximizing seating capacity. The introduction of plexiglass dividers between booths, portable privacy walls between tables, and plexiglass privacy panels at the payment points will help ensure greater separation while not impacting seat count.
- Elimination of all unnecessary surfaces: Review the entire restaurant and eliminate all surfaces that could harbor the virus. The removal of plants and other non-essential decor elements should be reviewed and excluded if they pose a risk to customers.
- Eliminate waiting areas: Leverage your app for appointment-only visits and reduce the number of patrons per visit to ensure there is minimum wait times for a table. Consider initiating safe distancing outside the restaurant through marked sidewalk signs.
- Review staff model: With a high level of anxiety over hygiene, restaurants will need to rethink their staffing model to ensure an adequate number of the front-line team are devoted to cleaning and preparation.
- Staff engagement: A return to a new normal will be stressful for staff who are also going to remain concerned about contracting the virus. It will be essential to communicate regularly and to provide thorough training regarding new processes put in place to safeguard both themselves and their customers.
- Mobile centric: Customers emerging from work-from-home protocols will have acquired more mobile-centric rituals and it will be important for operators to focus much of their marketing and promotional messaging leveraging this new behavior.
- Social celebration: Operators who have supported the fight against the virus through volunteer support or donations of food should create a pride wall within their restaurant, reinforcing their commitment to the community. The celebration should extend to the company’s social media platform.
- Take-home marketing: The take-out craze will not subside following the end of the pandemic and operators will need to continue to promote the channel of delivery and experience.
- New cleaning protocol: Initiate a new cleaning protocol to ensure all consumer-facing surfaces are sanitized on a regular basis. Turn this process into a confidence-building event for patrons as tables turn.
- Mobile wallet payment and order: If the organization has not yet embraced mobile wallet and ordering, migrating to the emerging form of engagement will be essential as part of a return to dine-in experience.
- Exploring new POS systems: Linking to the mobile wallet strategy, food operators should explore a migration towards a more mobile/ online friendly POS system that minimizes frequently touched surfaces, such as PIN pads.
Towards an Optimistic New Reality
No one has a crystal ball to look into and tell the world when and how the pandemic will end. However, those foodservice operators that view the chaos as an opportunity to foster stronger empathy for their customers will be well positioned to prosper and grow. And while most will struggle to find a new normal as part of the shutdown, continuing to solve the need for humanity to remain connected socially through food will not go away. How operators respond to this need will genuinely define the winners and losers in the coming months.