The coronavirus crisis has disrupted the restaurant business. New services, formats, and technological solutions allowed them to survive when they were forced to close their doors.
Olga Nosonova, an expert in restaurant consulting, believes that network venues are coping best with this crisis. They not only maintained their position in the market but also opened new restaurants. The reason is, she believes, their financial cushion and experience in enduring crises.
We talked to the owner of one of the largest chains in Ukraine, ‘Dmytro Borysov’s Family of Restaurants,’ restaurateur Dmytro Borysov. He spoke about the changes during the ‘lockdown swings’ and the current industry’s trends.
According to Dmytro Borysov, the last year of lockdowns and crises has accelerated the processes planned to launch in the future. Globally, they can be split into three categories:
- internal processes of business automation and digitalization;
- development of new products;
- search for new channels of interaction with guests in conditions when at any moment a restaurant can be forcibly closed.
The restaurateur emphasizes that the company treats all these projects as strategic development directions, not as temporary ways to reduce losses from the possibly coming lockdown.
In-house delivery service
A year ago, the company launched its own delivery service, ‘1 Euro Delivery’. And now it is a separate, promising line of business.
Borysov believes that the in-house delivery service has a significant advantage over aggregators:
- control of speed and product quality at all stages;
- the technology and concept were developed so that the order could be prepared in 120-300 seconds;
- there is an opportunity to improve and look for the most rational logistics solutions;
- constant improvement of packaging.
in-house delivery service has a significant advantage over aggregators
“Our service allows us to make 1000-1500 deliveries in Kyiv daily, with zero promotion costs. This is not a very prominent figure compared to 20,000 guests in our venues every day, provided the normal mode of operation. However, these are good results for the delivery segment, which has just begun to develop actively,” said Borysov.
He added that this area has become operationally profitable from the first day of launch.
“Restaurants really make money, not give all the profits to an aggregator. And out ‘1 euro delivery’ service itself brings profit and does not require constant investments,’ the network owner said.
Food halls at gas stations
Food becomes an important motive worldwide when choosing a place to visit: shopping and entertainment centers, cinemas, gas stations, etc.
“We have expertise in creating food that can be an advantage when choosing a place to relax or visit. We know how to quickly prepare dishes from quality delicacies that will cost 1-2 euros. On top of that, we know how to employ technology on any premises so that you can prepare 500-1000 orders per day. We have already opened food halls at WOG gas stations. This is a profitable story. The indicators exceeded the planned results,” as Dmytro Borysov puts it.
Food becomes an important motive worldwide when choosing a place to visit
Restaurant dishes in a freezer
These are shock-frozen and chilled ready-made restaurant dishes that can be sold in stores.
“We have launched a pilot partnership project “Borysova Yizha Kolo tebe” (Borysov’s Meals Near You’) together with the ‘KOLO’ chain stores. This confirmed another hypothesis: there is a demand for noodles with tiger prawns, tom-yam, shawarma, and borscht, which can be used to stuff your freezer at home or heat it on the spot,” Borysov said.
He added that the capacity of this market is massive. However, almost no one tried to work well in this category with ready meals in stores.
Meat substitutes price hinders their popularization
“Two years ago, we introduced burgers with meat substitutes into our menus. Now they are in almost all our concept venues. The ratio of sales of burgers with ‘vegetable meat’ to traditional ones is 1 to 10,” Borysov added.
Thus, the restaurateur does not yet see this product’s potential to grow into a particular business area. This means creating a venue that would work only with meat substitutes. Meanwhile, Borysov’s restaurants develop the culture of its consumption: they sell it almost at cost.
“So far, the high price of ‘vegetable meat’ is one of the deterrents to its promotion. But new brands of ‘vegetable meat’ appear in the market. Therefore, due to healthy competition, the industry and consumers will only benefit,” he believes.
Intangible is the most valuable
“You can be a successful company for ten years, and then there will be a situation in which you won’t know how to react. For example, you will be closed by the new regulations, leaving you one to one with obligations to your team, suppliers, and landlords. At such moments, it turns out that the intangible things are the most valuable, such as ideas, expertise, quality of business processes. And they determine the real value of the business. That is why we have started a long process of transformation, the gradual conversion from artisans who have been preparing food for years, into a foodtech company,” said Dmytro Borysov about the main business lessons he learned during lockdowns.
What will be the post-pandemic world
“I can say for sure that the world will not change. People both went and will go to cafes, bars, and restaurants. They ate out before, so they will eat out in the future. I think we will come to the reality in which ‘food is closer.’ Quality food will be at gas stations, shopping malls, cinemas. And food will be an important competitive advantage for these establishments,” Borysov thinks.
What are other Borysov’s forecasts?
- further digitalization: it would become normal to order via an application, book a table or one-click delivery; personalized offers, payment of bonuses, etc., are also to come;
- the rapid development of food halls that combine several concepts in one location;
- changing attitudes towards ready-made food sold in stores through cooperation with the retail industry;
- development of cafe-shop formats to minimize the risks in the case of next lockdowns.
“Besides, there will be interesting collaborations with manufacturers. Some producers will begin to grow as culinary companies in the ‘ready to cook’ and then ‘ready to eat’ segments. It is also worth waiting for many interesting IT solutions coming for the food industry,” Borysov expects.