Customer Buying and Eating Behavior - The Impact of COVID-19
The COVID-19 pandemic has provided us all with significant challenges. The food and beverage industry has had a particularly steep learning curve when it comes to surviving the pandemic. With restaurants, cafes, and bars all mandated to close their doors - some for upwards of 18 months - they have been forced to evolve or die.
Naturally the pandemic has also had a significant impact on the way people buy and consume food and drink. However, as many restrictions around the globe start to lift, the question turns to whether things have changed for good, or whether customer behavior will return to how it was in the before-times.
COVID-19
Thanks to the lockdown restrictions put in place to help slow the spread of COVID-19, businesses in the food and beverage space have had to change up how they do business. With so many people staying at home, takeout has become the new dining out.
The use of food delivery apps more than doubled during 2020, with more Americans ordering takeout food than ever before. Even restaurants which wouldn't normally fit a delivery/takeout model have had to offer the service - simply to survive.
"We were effectively shut down," said Zachary Davis, owner of The Glass Jar restaurant group in Santa Cruz, California. "We closed for a couple of days, took stock and realized it was the only way to keep our business open."
However, many restaurants have simply been surviving rather than thriving by offering takeout services. Fine dining and other higher end restaurants rely heavily on selling wine and other beverages alongside food (these products typically have a much higher markup) to turn a profit which they simply cannot do via takeout delivery. And that's before you even take the commissions the delivery apps charge into account.
"As an employer who cares deeply about my staff and who is always looking for ways to support them, I find the efforts of the delivery-app companies to push labor costs back onto 'independent contractors' to be deplorable," Davis added.
Post Lockdown
Now things are starting to open up again, the food and beverage space still finds itself in serious trouble. From staffing problems, with over 50% of hospitality staff saying they won't return to their old job for any reason whatsoever, to ongoing COVID-19 issues.
Many restaurants are still operating at a reduced capacity to allow for social distancing and many people remain nervous about going out to crowded spaces. Those who aren't necessarily nervous about COVID-19 have still gotten used to staying in and have often started to appreciate how much money they can save ordering takeout or cooking for themselves.
The UK tried to encourage people back into restaurants with its Eat Out to Help Out scheme, where restaurants could offer significant discounts on meals and claim the difference back from the government. The scheme was successful and led to 106,534,000 meals being claimed for to a value of over six million GBP. However, the scheme was also partly blamed for the UK's second spike in coronavirus infections, which did little to allay people's reticence to venture out.
Flexibility
It seems from the data that while some people are tentatively beginning to return to restaurants once again, hospitality brands would do well to adopt a flexible and agile business model. Everything is still very fragile and there's no telling if or when we can really relax back into normal life again. With infection rates still very much in flux and consumer confidence at an all-time low, this would seem the prudent approach.
Making sure customers feel safe should be a top priority, and being ready to adjust based on demand will be essential. Reducing capacity, offering outdoor seating, visible sanitizing stations and routines, staff mask wearing, and offering takeout and delivery options, should all be on the table as ways to make customers feel comfortable and to keep everyone safe.
"As the food and beverage industry ramps up, there will be no "right" way to do things," writes Ryder for Forbes. "And everyone in the industry will have to leverage the strengths of each other to meet new customer behaviors and demands. This means being nimble to change strategies whether it is going from dine-in to take-out or adding e-commerce capabilities to reach consumers directly."
Changing customer behavior in the face of the pandemic is set to be a hot topic at Digital Food and Beverage 2021, taking place in November at the JW Marriott Austin, TX.
Download the agenda today for more information and insights.