They say change is inevitable, and the whirlwind arrival of COVID-19 proved once again that humans can’t are no exception to this universal decree. Before the coronavirus, some of the key factors that were driving the F&B industry included higher disposable income, the buzz of experience economy among Millennials and Gen Z, and the increased use of technology in all areas of hospitality.

As the effects of COVID-19 are felt around the globe, consumer products food & beverage companies have taken asignificant hit in terms of consumption as well as disrupted supply chains. Cooking at home has increased, but out-of-home consumption – which historically generates the highest margin – has come to nearly a standstill. According to a survey report from Hunter, a food and beverage marketing agency, 54% of Americans now do more cooking than they did previously, while 35% say they enjoy it more.This has led to 32% of organizations are replacing full-time employees with contingent workers as a cost-saving measure (as per a study done by Gartner). While the short-term effects of this public health crisis on the restaurant industry are clear — with unemployment soaring and restaurants being forced to shut down — the long-term effects are less so.

As they also say necessity is the mother of invention,restaurants globally have spun to embrace new ways of providing services. These include contactless methods of reservations and payment, ordering meals ahead of arrival, outdoor dining spaces, and others.

Here’s how many of them have responded –

A Surge in Contactless Delivery Options

Since most authorities are prohibiting food and beverage outlets from opening fully to serve incoming guests, contactless food delivery options have gained momentum.42% of restaurants in the US opted delivery options and 31% said they planned to continue to invest in the service, according to research by Rewards Network.  Not only does this type of service enables customers to avoid in-person contact, but it also offers greater convenience, i.e. one doesn’t have to move a muscle, and still be able to support the local economy. This is effectively resulting in conversion from “dining in” to “dining out,” and causing restaurants and other F&B outlets to rethink their approach.


Repurposing Premises

High-class kitchens and dining areas have seen some venues being repurposed innovatively to offer new ways of sitting (outdoors and indoors). Fine-dining restaurants that were previously focused on a remarkable dine-in experience for their guests, their goal now has changed to deliver a similar experience at their homes’ in the form of a take-out. Of course, paying critical attention to hygiene and safety from cooking, to packaging and delivering. Reopened restaurants around the world with their respective social distancing measures in place and those with venues with outdoor facilities had to be adept and implement different levels of “safe” service for their customers. Servers are required to wear masks and/or face shields. Not to mention, always maintain a safe distance between themselves and their customers.


Re-Engineering Menus and Incorporating Self-Service

Online ordering through web-based menus has put some chains ahead of others in the race of adaptability. The reduced contact between servers and diners, not only does it put social distancing measures to practice but also streamlines the ordering process as well. Payments are often contactless, and the cashiers are protected from any contact by plexiglass shields. Salad outlets have been seeing maximizing the ‘self-service’ aspect through implementing robotics and technology such as automated weighing and salad making inventions that can make 1,000 different types of salad in 60 seconds.


So, how does the future look as F&B evolves into the new normal? What will guests and locals want from restaurants, bars, and events?

Though restaurants seem to struggle to predict future customer-flow, staffing requirements, and the cost of newly-minted sanitization protocols, they are ensuring the safety of both staff and customers. Restaurants are responding positively by retraining of staff will include how to avoid physical contact, maintaining the required levels of supplies of sanitizers and other hygiene-related products within the premises, and how to respond to a positive COVID-19 result on the premises.

Furthermore, many restaurants are redesigning their menu with pre-packaged, grab-and-go meals, and home deliveries as their main forms of foodservice. Restaurants, bars, and lounges are likely to reopen with limited capacity to ensure social distancing. There’s no question that COVID-19 has changed our world forever. The F&B industry is responding rather innovatively by rethinking every aspect of F&B operations, from floor layouts to menu offerings, while also taking environmental impact and corporate culture into account. One thing’s for certain-we’re in for a challenging ride.

Albert Finch
Head of Research
Rodschinson Investment Strategic Research Center