Publication

Food services vs Covid-19

Food service industry operators need to rethink their business model - quickly!

Distribution channels need to be adapted and digital technology developed

Consumer behaviour has now changed forever. Catering chains will have to adapt their points of sale and distribution channels to both new health requirements and changing consumer expectations.

Physical distancing requirements and fear of the virus are leading to a boom in take-away sales and home delivery. This consumption model will become the norm over the months and years to come. Catering operators will have to adapt and reallocate their resources to tailor their prodution as close as possible to demand. ‘Dark kitchens’ will emerge in urban centres, capable of delivering at any time of the day. The 100% digital food service brands will enable pure players who are locked into their brand positioning to gain market share by addressing new customers.

The target business model must be resilient

The Domino's Pizza model, though often derided, is the most resilient model on the market. The least resilient signs are those that are furthest away from hot consumer sites. They have chosen to locate in business areas and near hotels, far from residential neighbourhoods. It is imperative for them to reposition their assets and reinvent themselves to address a new target clientele.

The new model must also be anti-fragile, but above all enable the brand to secure its margins and maintain customer relations.

Antifragile does not simply mean being robust or resistant - merely withstanding shocks and remaining the same. Antifragile means a capacity to improve. Rapidly setting up a home delivery service almost systematically means contracting with asset-light players such as Uber Eats or Deliveroo with the double penalty of destroying value through a significant loss of margin and losing customer relations. This is vital for a start-up but this crisis option should not be the target.

Catering and logistics professionals are already working together to build tomorrow's winning model and EGGERS Conseil is at the heart of this revolution.