After the pandemic, we will eat much like we did before: for both fuel and fun.
These universal experiences will inform major changes in the restaurant industry, which will be dictated by three things: a need to operate more efficiently, a bumper crop of innovation and new consumer preferences, experts say.
The industry has long relied on charm and deliciousness, but when we emerge from the pandemic, the time will be right to disrupt disrupters such as Deliveroo and Uber, to bring in blockchain and data science, as well as to create more seamless experiences, which will mean splitting the bill does not require scratching out long division on a paper receipt.
Prior to the pandemic, the UAE was the leader in the food and beverage industry in the Middle East, with increasing tourism fuelling a food boom. Dubai has more restaurants than New York or London per capita, and three-quarters of restaurant-owners anticipated moderate growth in the near term, according to 2018 analysis by KPMG.
But today, the future now seems far from certain for restaurant-owners, with many questioning if their businesses can survive. An April survey of 1,500 restaurants, 1,000 of which are in the Middle East, by JLL Foodservice Consulting Mena, found that a majority of owners believe their sales in 2020 will be 40 per cent or less of what they expected at the beginning of the year.
Even as UAE food outlets begin to re-open to dine-in customers, owners say they are losing money by staying open under strict Covid-19 restrictions, which limit seating capacity to 30 per cent in line with social-distancing measures.
But if they can survive this uncertainty, there will be plenty of opportunity.
Why are aggregators downsizing during a delivery boom?
With millions of people relying on delivery services for their every necessity, it seems counter-intuitive that Uber Eats has downsized amid the pandemic.
But the tough economy has shed light on the issues of the food aggregator business model, whereby it often costs more to run their operations than they make: they not only deliver the order, but run tech, offices and departments such as marketing and legal. Uber exited eight markets earlier this month, and it is now being widely noted that Deliveroo – one of the most hotly anticipated IPOs of 2020 prior to the pandemic – has never made any money.
And the restaurants could swallow the high commissions aggregators charge, an average of 16-30 per cent of every order according to JLL, when their business was buzzing. But not so much under these circumstances.
"The delivery aggregators are charging huge fees and have refused to offer any support during the crisis. They have the upper hand right now," Elias Madbak, managing director of RMAL Hospitality, tells The National. His group operates Wagamama and Trader Vic's franchises.
“I don’t think anyone can afford to come off the platforms until dine-in capacity has increased. This is all short term, and our focus right now is all on surviving the pandemic, and emerging with the business still intact.”
Delivery is one thing, data is another story entirely
But longer term, restaurants will aim to wrest control back from these aggregators, which on top of the high fees, also retain valuable customer data.
"No one in our business ever talks about customer data," Ian Ohan, the founder and chief executive of the UAE's Krush Brands tells The National. His company owns Big Dwarf, a technology platform for restaurants, upon which his brands, Freedom Pizza, Wildflower Poke, Salad Jar and Coco Yogo Vegan Kitchen, take delivery orders.
Prior to the pandemic, 95 per cent of Ohan's business was delivery, most of that through his own platform. He now sees an opportunity to "accelerate" his strategy: taking onboard more restaurant customers who share his vision of healthy food options, locally sourced when possible.
The restaurants that use Big Dwarf's tech will be able to keep their customer data, which was a black box previously owned by the aggregators.
“It’s not Uber Eats’ customer, it’s not Zomato’s customer. When someone orders online, you get to have a real connection to your customer,” he says.
In the past couple of months, all manner of companies have moved online, “a lot of them badly”. Coming out of this, people will be used to their presence, but will eventually want a higher quality experience.
“There will be room for new players, which will bring a whole new round of innovation and a cool wave of interesting concepts and ideas,” Ohan says. He predicted a “massive blurring of delivery, dine-in and grocery”.
The first client to come onto the platform is Hapi, the kind of fast-casual trendy food spot of Instagram’s dreams: coffee, acai bowls, bone broth and burgers.
Chef and owner Paul Frangie was forced to permanently shut one of two locations in Dubai during Covid-19 shutdown orders. He has managed to retain all 15 of his employees in part because of the rent he is saving by joining Ohan’s multi-kitchen, where Freedom and Salad Jar, among others, make food. He is also now investing in an app built by Big Dwarf so that he can cut ties with the delivery aggregators once the pandemic is over.
“The way these ordering platforms work is they don’t share customer data with us, which makes it quite difficult to market directly to customers,” he says. Even before the pandemic, Deliveroo and the other platforms were beginning to make it feel like a race to the bottom.
"We felt a squeeze last year, it started to get very competitive, encouraging us to do 2-for-1 deals or Dh18 lunches," Frangie explains. While Hapi wasn't taking part in this scramble, he began to understand that relying on delivery platforms to run a delivery business was "not conducive to long-term survival".
He even began seeing the aggregators share data with their competitors.
“They tend to advise certain restaurants to come up with new menus or products they know work in a certain area, if there’s no restaurant doing that in one area. So they cannibalise their own customers,” he says.
“I’ve been trying to find a way out of it for a while, and now the whole industry is forced to find a way out of it.”
He isn’t alone. Earlier this month, more than 100 small and mid-sized food and beverage outlets in Dubai joined hands to build their own order booking and delivery app and take on Zomato, Talabat, Uber Eats and others. They say the app could be ready to roll in three months.
The social-distancing mandates that will become permanent
Industry experts have some other ideas on the future of dining. First, encouraged by social-distancing mandates and concerns about hygiene, menus will not be on offer, instead we will pull them up on our smartphones and order with a few taps from our table.
Payments will be contactless, and easily split among a group. Madbak, of RMAL Hospitality, says they are working quickly to put in place contactless payments and QR code menus to minimise any possibility of contagion while dining in.
Those things will at first seem rudimentary, but over time, these features will be permanent and the technology will improve to speed up wait times. One day, the look and feel of a menu on your Samsung Galaxy will rival that of reading from a paper menu.
But what about the secret spice that makes hospitality what it is?
This is where the divergence between food for fuel and food for the experience comes into play, Alexis Marcoux-Varvatsoulis, a former chef and foodservice lead for the Mena region at property consultant JLL, tells The National.
Over the past decade, the food and beverage industry has grown, particularly in shopping centres, as consumers seek experiences and social opportunities when they go out, not just straight consumerism, he says. Food outlets that are more for fuelling up and moving on are good places to implement consumer-facing technology.
But at the romantic and special spots where we celebrate milestones, technology will be used in the kitchen, but linen tablecloths and decadent menus will continue to appear front of house, says Marcoux-Varvatsoulis, who worked as a chef in Paris and Lyon for six years prior to becoming a consultant.
How the food gets to the table, however, is likely to rely more on blockchain and data insights. Covid-19 has accelerated the use of technology, but there is still a lot of room for innovation, he says.
Blockchain will be useful to trace a fish from the sea to the plate, for example, as consumers will demand to know more about their food for health reasons, and locally sourced food is becoming more popular amid supply chain vulnerabilities. Blockchain can also cut down on the time it takes food to reach a buyer, since it can clear customs at the point of origin rather than get caught up at borders.
Traditional cash registers that only transact and manage reservations will also make way for sophisticated point of sale machines that can spit out forecasts for how much food to order in a given month, and the best way to maximise the value of every dish.
Marcoux-Varvatsoulis laments a possible loss of hospitality amid these changes, which is the alchemy of food.
“Hospitality is about people and being given an experience rather than consuming the food,” he says.
But, how exactly technology will integrate with hospitality without losing its magic, remains enigmatic he says, adding that if he knew, he'd "be a billionaire".