CEOWORLD magazine - Latest - CEO Briefing - How the ‘New Normal’ is Shaping F&B Operations Design

CEO Briefing

How the ‘New Normal’ is Shaping F&B Operations Design

To survive the “new normal,”, food and beverage operators have no choice but to rethink and redesign the way they run their businesses. Findings from a recent study by Aaron Allen & Associate Global Restaurant Consultants reveal that 65% of restaurants in the US risk bankruptcy and 25% of them will remain closed indefinitely due to the pandemic.

Restaurants that survive this fallout will need to relook how they meet both new health and safety requirements and consumers’ changed habits. As Sebastien Bazin, CEO of Accor – the largest hospitality company in Europe – says, “Either you change, or you will be changed”, and only those who are able to adapt will remain.

As they plan for the future, F&B operators will need to prioritize alleviating customer hygiene concerns and developing more agile operating processes so that they can quickly adapt and budget for possible new constraints.

With these factors in mind, here are nine key F&B operations design changes that are gaining momentum:

  1. Utilizing space more mindfully: Restaurants need to have enough space to adjust furniture layout to follow the recommended social distancing rules.
  2. No touch: Classic paper menus are being replaced by scannable QR codes that give customers access to an online menu.
  3. Menu offerings: Restaurants are rethinking buffets and sharing-plate services. Instead, they need to consider becoming fast-casual restaurants.
  4. Solo dining: The restaurant chain, Ichiran Ramen Restaurants, has implemented a solo dining experience, and other restaurants will also need to consider creating offerings for people who would prefer to dine alone. However, this change has an impact on profitability as restaurants will need to increase their table turnover and extend operating hours to generate enough revenue to sustain their business.
  5. Doubling for deliveries. To adapt to their customer’s demand for access to more elaborate menus for home consumption, fine dining restaurants may have to add deliveries as an option. The cost implications of this, however, can be prohibitive as it means dedicating an entire section of their kitchen to the production of the delivery service.
  6. No more waiters: Waiter-less casual dining restaurants are fast becoming a reality, especially in Asia where customers are seeking a contactless dining experience. The demand for disposable and easy to clean sanitized tableware means high start-up costs, although this could reap benefits in the long run.
  7. Stores as restaurants: At Alibaba Group’s Hema food stores, customers select their food products from the shelf, then decide on the particular recipe they would like used to create their meal. Service robots then deliver their store-bought ingredients to the kitchen where their meal is created. Customers then have the choice of whether they would like to eat their meal on-site or take it away. Payments are made through cashless checkouts using facial recognition. This concept is revolutionizing the F&B and restaurant business by redefining the boundaries between stores and restaurants.
  8. Robot staff: Robot cooks and bar staff will become a hygienic and fast service alternative to reduce contamination risks. This also guarantees consistency in the food and drink production process and delivery time. However, the introduction of automation and the use of robots will take away the personal touch a chef or barman adds to the dining experience. It also means special care will need to be taken in terms of the maintenance of production equipment and the refilling of raw materials.
  9. Vending machines: This has already been widely and successfully implemented in Japan. Customers choose their meal through a contactless vending machine, with kitchen staff continually refilling the vending machine to guarantee freshness. For the Japanese, this has become a cost-effective way for small F&B outlets to incorporate takeaways into their service offerings and remain in business. It also means that in terms of health concerns, contact with customers is reduced to the bare minimum.

Impacts on the F&B industry

Many of these changes rely on additional financial outlay by restaurants in terms of investments in hygiene-friendly fixtures, alternative food production and delivery processes, and additional technology requirements. To generate enough revenue to sustain their businesses, many restaurants will need higher table-turnover and longer operating hours.

All of the above factors are costly, which means only well-established F&B outlets with extensive financial resources will be able to put them in place and still remain profitable. This will also impact and limit the number of new outlets able to enter the market.

There is only one thing that is certain, there is no going back to the “old normal” Only those who are able to recognize the opportunities these challenges create, who have access to financial resources, and who are able to adapt and move forward, will survive.

Written by Philippe Gueltzer.

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CEOWORLD magazine - Latest - CEO Briefing - How the ‘New Normal’ is Shaping F&B Operations Design
Philippe Gueltzer
Philippe Gueltzer is a lecturer at Swiss Hospitality Management School, a leading hospitality and management school with campuses in Caux and Leysin in Switzerland. He has over 20 years of international experience in top management positions with companies such as Accor, Raffles, and Best Western.

Philippe Gueltzer is an opinion columnist for the CEOWORLD magazine. You can follow him on LinkedIn.