Changes in the Indian Restaurant Industry Post Lockdown

With the pandemic and the lockdown changing customer needs, Indian restaurateurs are brainstorming solutions — from drones for sanitising and waits staff masks to different table layouts

2020 was supposed to be the year when humanity colonised Venus or Mars, travelled in flying cars or teleported, had brains permanently connected to the internet, and dealt with self-replicating robots. Instead, the reality far outweighs any science fiction. Brought to our knees by a virus travelling the globe, aspirations lie deflated as lives and businesses get back to the drawing board to reassess and rebuild.

As The Atlantic’s science writer Ed Yong recently wrote, we must stop thinking of the lockdown as a blip after which life will go back to normal. Instead, we must prepare to find the new normal. Long-term changes will have to be made as to how we live, behave and, yes, socialise over food and drink. This begs the question: how will restaurants change in the near future?

No, we may not have that virtual steak, Matrix-style, just as yet. But we may definitely find ourselves seated much further apart, served by staff in masks and gloves as the new silver service, read menus on our own personal devices, and demand our meals have antioxidants instead of umami. Post such judicious dining, a drone may sanitise surfaces scrupulously.

Or we may just continue with Zoom parties, having ordered in gourmet food individually.

As consumers emerge different people from those who had gone into social isolation, restaurants will need to contend with newer needs and reimagine different business models. Here are some probabilities:

Space and technology

“Technology within restaurants will be crucial in reassuring customers and ensuring safety,” says restaurateur Ashish Kapur (Whisky Samba, The Wine Company), anticipating the need for tech like automatic temperature checks for staff, portable washing sinks and automated surface sanitising. “Many of these are already available, but their application within restaurants will be super critical,” he adds. Guest-facing technology that minimises contact — mobile wallets instead of cash or credit cards, menus on personal devices — will mean that dining out will be a more isolated experience.

Delivered with care

• Food deliveries functioning during the lockdown are ostensibly following strict safety protocols in the kitchen. Some like Noshi, the Asian delivery run by India’s foremost wedding caterer and restaurateur Varun Tuli, have gone the extra mile. The kitchen in Delhi is housed in a glass-fronted building, and there is strict segregation between various sections (hot, cold, roast, frying). Food is handled only by the chef and packaged in boxes within boxes, carried by riders who work for the company and own their own motorbikes. Some of these things may become regular features, though this may be hard to ensure in smaller establishments.

Crowded bars may be a thing of the past too, or at least for the next two years or till a vaccine for Covid-19 is found and fears of contagion recede. As restaurants practice social distancing, “they will need to reduce the number of seats and eliminate, for some time, bar nights, parties and crowded weekends, which were important revenue generators”, points out restaurateur AD Singh.

Restaurants are also likely to get more sober, with quieter, perhaps more serious dining, back in fashion. Sandeep Tandon, managing director of Old World Hospitality that owns Delhi’s Indian Accent, talks about the need to change restaurant design or at least table placements. “At Indian Accent, we already have tables placed at a luxurious distance so that you cannot hear others talk. We will have to relook the placements for some of our other restaurants, however,” he says.

Better food, better sourcing

Restaurants in India, by and large, needed to be more transparent about their supply chains. Working on wafer-thin margins and looking to cut on food cost, which can be roughly 25%-30% of the revenue, many in the casual dining, mid-market segment played on price alone — unlike more mature markets like London, where even chains like Pret a Manger or Itsu pitched their food as fresh, environmentally-friendly and organic.

The post Covid-19 dining scene may change this. “Diners will be much more conscious of where we are getting ingredients from, so restaurants will need to be more mindful of sourcing,” anticipates chef Manish Mehrotra of Indian Accent. Menus will be relooked based on not just the availability of ingredients (imported supplies may be harder to come by, at least in the short term) but on changed preferences of diners. “Some may turn vegetarian, others may want to eat more healthy ingredients,” he says.

But where is the money?

More technology, less crowded restaurants and bars, more expensive food ingredients and improved hygiene mean the cost of putting that burger or biryani on your plate will go up. Will diners be ready to pay more? “People will look for better quality and hygiene, but I am not sure how much extra they shall pay. I feel, people may get thriftier,” says Tandon. With the economy in shambles, the next two years are hardly likely to see enhanced spending on food.

In a way, this is just the opposite of the last global recession. Restaurants were the surprising beneficiaries of the economic scenario worldwide in 2008, where people did not want to spend big money on holidays and hotels, but felt good spending on “small luxuries” such as eating out. But in the present scenario, extreme caution over social distancing coupled with uncertainty about finances mean even the privileged may be less inclined to spend in restaurants.

On the ’gram

• During the lockdown, posts that seem more real than contrived cooking lessons are our top picks for entertainment
• Chef Ritu Dalmia recently posted about a not-so-delicious rajma-rice meal she cooked while in lockdown in Goa, where ingredients are hard to come by
• Manish Mehrotra’s post about the drudgery of chopping vegetables (fingers taped) along with his daughter, struck a chord
• All of us can make mistakes. Thomas Zacharias’ confession that he burnt his rice (even a trained professional can goof up) had many commiserating and commenting
• British chef Gordon Ramsay recently pitted himself against a timer to whip up a stir-fry that won’t take more than 10 minutes to make, from prep to plating. Over 25k people logged on to IGTV

The growth in chain businesses backed by private equity in the last few years meant that many markets were saturated even before the present crisis. Rising rents, pressure on margins and uncertain policies were already playing havoc with bottom lines. Now, with diners vanishing from tables, many restaurants are set to vanish too. “We will see some closures, more consolidations and some takeovers once business returns,” says Sharad Sachdeva, director of operations - L Catterton, the private equity arm of French luxury goods conglomerate LVMH. He adds that whenever there is a crisis, there is a fall in valuations of companies and that may be a good time to buy equity in these. This may happen in the restaurant business too, but PE funds are still “waiting and watching the situation as it is not clear when and how this will end”.

Meanwhile, rents will have to be renegotiated and restaurants will need to look at two or three different streams of revenue. With delivery services being allowed during the lockdown, many top chefs and restaurants, including those in five star hotels, have been looking at food delivery as an alternate source of earning. However, the size of most of these operations is still small. It is debatable how much revenue restaurants can actually earn through this stream to make it worthwhile to call in staff. Even post the lockdown, deliveries can only account for a limited percentage of a restaurant’s earnings. And these can in no way compare to, say, the revenue from alcohol sales that many restaurants in India used to depend on.

It is going to be a tough future for your favourite restaurant. But in the end, there is always hope to tide us over.

Sources: Personal Research of Mr. Sahil Davda, Various News Channels, Various Articles.