The restaurant industry has employed a host of coping mechanisms in the face of the pandemic’s relentless assault. How effective is the delivery model and why should you order directly from restaurants? Our contributor scouts for answers. By Riaan Jacob George
As the second wave of the pandemic batters Indian businesses, especially those in the hospitality industry, restaurateurs and chefs have had to bear the biggest losses. “We’ve worked very hard in the last few months to regain consumer trust for dining-in. Things were finally looking up when night curfews and lockdowns were imposed again,” says Riyaaz Amlani, CEO and MD, Impresario Handmade Restaurants. “While we understand that various state governments have imposed them keeping in mind public safety, this will probably be the final nail in the coffin for the F&B industry.” Amlani, who recently made news for partnering with Mumbai’s iconic dabbawalas for deliveries, is highlighting an existential challenge that almost all industry stakeholders are facing right now.
DELIVERIES TO THE RESCUE
The most obvious, and at times, the only route to survival has been to focus on the delivery model. A case in point is Mumbai’s Bastian, a seafood speciality restaurant with a high-end dine-in clientele. “We were initially quite lost and searching for solutions. We quickly installed a delivery model into set processes, revisited costs to suit material availability, and estimated the willingness of the customer to spend,” shares founder Ranjit Bindra.
Some entrepreneurs were quicker than others in adapting and putting into place digital-only solutions to beat lockdown blues. Sameer Seth, partner at Hunger Inc. Hospitality—known for Bombay Canteen and O Pedro—launched delivery formats King Fu Canteen and Brun & Babka. “The logic behind these two was food that would give comfort to people in a lockdown,” Seth says.
Another restaurant group specialising in high-end dine-in experiences, KA Hospitality (CinCin, Hakkasan, Yauatcha, and Nara), admits to making delivery a major vertical of operations. The group’s executive director, Karyna Bajaj, says that delivery has now become a crucial channel of revenue for the restaurants. “In addition to delivery, we are now targeting a niche segment of bespoke dining experiences at home for smaller groups. For example, a bottle of Prosecco with a four-course meal, a celebration menu with champagne, or even gourmet hampers. We have invested in websites, software, and training to align and support these revenue verticals as these will play a prominent role in the future.”
On the other hand, restaurants with delivery-friendly cuisine have found it easier to stay relevant. A good example is Mumbai’s Thai kitchen Seefah. Founders and chefs Seefah Ketchaiyo and Karan Bane reveal that they haven’t made any major changes in the existing menu through the second lockdown. “We want to essentially reduce our operational costs without hampering the food quality,” they say.
THE AGGREGATOR DILEMMA
It’s no big secret that there’s a love-hate relationship between restaurants and aggregator apps like Zomato, Swiggy, and Uber Eats. While some restaurateurs are grateful for the large database of customers that these apps bring, others are calling them out for eating into their profits. Amlani calls for restaurants to begin direct communication with patrons. “There is no better time to go back to building our own customer base and serving them directly. In the past few years, we have become complacent when it comes to delivering to our customers, and we have let aggregators keep our database from us. Data masking is an evil thing that needs fixing,” he minces no words.
Chef Ketchaiyo regularly encourages her Instagram followers to order food directly “since these aggregators charge a huge commission from us.” The National Restaurant Association of India (NRAI) and Gauri Devidayal, partner, Food Matters Group, which runs Mumbai-based The Table, have been running a massive ‘Order Direct’ campaign. “We are not asking restaurant owners to completely switch off from aggregators, as we understand the value of what they bring—customers, logistics, technology, user experience. What we are saying is that it does come at a huge price. We are encouraging restaurants to have an alternative presence through a direct ordering platform so that you are not entirely dependent on aggregators. The idea is to ensure that they cannot call the shots,” explains Devidayal. The idea is to coexist, summarises Bastian’s Bindra, who is “pro-Zomato and Swiggy, thanks to the convenience they have created in bridging the customer-restaurant gap.”
MORE QUESTIONS THAN ANSWERS
Deliveries have compensated somewhat for the loss of dine-in revenue, but they haven’t done enough. Especially in restaurants that had invested in building a luxurious dine-in experience. “While we’re able to do deliveries, restaurants cannot sustain [themselves] on pure delivery. This is very different for a delivery-only brand as opposed to a restaurant, where the overheads are far higher in terms of manpower and real estate. The biggest challenge has been to meet the payroll overhead with considerably lower revenue,” says Devidayal. Even Hunger Inc.’s Sameer Seth says that the delivery model is not sustainable in the long run. “It’s not as if we can suddenly create new revenue models, which will be in line with the kind of costs that we incur,” he says.
Massive Restaurants’ founder and managing director Zorawar Kalra summarises the economics behind the two revenue models for a standalone restaurant, “No amount of home delivery can make up for the loss of dine-in sales. The former usually accounts for 20-30 per cent of revenue. The current restaurants are not built for just delivery. It can be an add-on to enhance sales and profitability, but it cannot be a replacement.”
Kalra also laments the lack of support the industry has received from the government. “The restaurant industry has always been the hardest hit. We are the second-largest employer of human capital in India after agriculture, with 7.8 million people directly employed,” says Kalra, who is quick to point out that the industry also contributes between two and three per cent of India’s GDP.
Similar gripes are echoed by Sahil Timbadia, partner at Auriga Hospitality & Entertainment, which runs Mumbai’s popular Bonobo, Jamjar Diner, and the delivery kitchen Bowl Baby Bowl. “Despite promises by our leaders, there has been no help in terms of financial concessions, delaying or waiving off fees, etc. We are left to fend for ourselves again and still do not have industry status, despite the fact that we are one of the largest employers in the country,” Timbadia says.
BARS ARE MIXING IT UP
Among the worst affected within the restaurant fraternity are bar owners. But they have been reinventing themselves too. A leader in the Mumbai bar segment, Timbadia points out that bars with vacant kitchens are starting delivery brands, and existing brands are starting sub-brands. Things like comfort food menus, paired with craft beer, are now popular.
Restaurateur and bar owner Ashish Dev Kapur has reinvented the wheel by delivering cocktail kits from Whisky Samba. “We’ve got these fancy gourmet ingredient pre-mixes, and all you need to do is add the spirit. Such initiatives help keep the brands alive in that you can bring your favourite bar home.” While he reveals that the response to the pre-mixes was favourable, he also admits that bars were not prepared for the second wave. “It is a serious financial haemorrhage. The challenge now is to win people over and prepare for the future by ensuring safety to the utmost levels.”
Editor’s Note: Keeping the current situation of the pandemic in mind, T+L India recommends every reader to stay safe, and take all government-regulated precautions in case travel at this time is absolutely necessary. Please follow our stories on COVID-19 for all the latest travel guidelines.