Food service was one of the sectors most heavily impacted by COVID-19, in large part due to strict lockdowns across key geographies and diners' hesitation to purchase or consume food prepared outside of the home.
The devastating initial losses forced many food service providers to rethink their business strategies. Some partially or entirely shut operations, while those that remain have heavily invested in hygiene and safety protocols to ensure complete compliance with local laws. This requirement, coupled with restaurant owners' reduced ability to run at full capacity, has resulted in higher operating costs and much tighter profit margins.
Many restaurants, unable to justify high overhead costs in the midst of a crisis, have shifted to a cloud kitchen model to reduce staff headcount and capitalize on the currently thriving food delivery market. Traditional outlets are also relying on third-party food delivery aggregators to diversify revenue streams, despite the significant cut taken by such service providers.
As with retailers across the industry, those who quickly adopted – or were already equipped with – strong digital capabilities fared better in the crisis due to their ability to meet the needs of an increasingly digital-first market.
While the road to recovery for the food and beverage services industry will be particularly challenging, retailers would be wise to keep up with key dine-in, delivery, and digital trends to ensure they continue to deliver innovative customer experiences, even if from a distance.
With our team of highly experienced consultants, Cedar is equipped to provide best-in-class consulting services to drive growth for clients across the global food and beverage industry.