by Sue Quimby, CPCU, AU, CIC, CPIW, DAE
The COVID-19 pandemic changed the world in many ways, especially in the ways people obtain one of their most basic needs—food. As an item of necessity and often a source of entertainment, the ways we choose to consume sustenance play a crucial role in the food and dining industries. As the country continues to open and restaurants fully open their doors, the way they adapt to the ‘new normal’ and the interests of their consumers will play a crucial role. The food industry is constantly evolving, and the pandemic proves to be another catalyst for the future of dining.
Restaurants and other food providers that can change their business constructs, such as online ordering, delivery methods, takeout/take-home options, may actually see an increase in business. “For those that have been successful during the period of coronavirus in their pivots, whether that’s been doing groceries and wine shops or creating meal kits — and for that to be very local, because of people’s inability to travel across the city — there are multiple stories here of that having worked extremely successfully, and for businesses having developed much closer relationships and building loyalty within their communities,” said Adam Coghlan a writer for a food blog, Eater London. With the safety of consumers and workers on everyone’s minds, adjusting business models is key.
Outdoor dining has seen a positive increase in the warmer months of the pandemic. Restaurants that did not previously have outdoor seating are setting up tents in parking lots while others are obtaining licenses to occupy adjacent sidewalks for al-fresco style dining. It has proven to be a way that some of the public feels is the safest way to dine during the pandemic. The cooler months will most likely be a challenge for restaurants in some parts of the country. Businesses have been preparing for the hard switch to indoor dining with the installation of HEPA air filters, UV lighting, increased spacing between tables and the creation of solo dining rooms. Use of technology can help smooth the in-restaurant dining experience, from the reservation process to ordering and paying for the meal. Online reservations management systems can mean shorter wait times and reduced crowding at the bar or host station. The most critical component to indoor dining is that the public feels safe. The future of dining is in the hands of the consumer.
Food trucks have seen significant changes in their operations as well. Before the pandemic, food trucks were a staple at many sporting and cultural events, catering corporate and private gatherings, or parked outside commercial and office buildings during breakfast and lunch hours. The pandemic caused many events to be cancelled, and people stopped going to their offices to work. Food truck operators have taken to setting up their operations in residential areas and making use of social media. Customers use apps and social media to find food truck operators, and order food for pickup.
For fast food restaurants, the availability of drive-through services has meant that many could reopen faster, albeit with more restrictions, including requirements for employees to wear masks and gloves, and more intensive cleaning protocols. Beyond the mighty chains like McDonalds, the drive-through and drive-up car delivery process has been adapted by other businesses alike.
Some breweries have established a system where you can pre-order your cans and growlers then pickup them up curbside without even having to leave the comfort of your car.
Food delivery services offer an increased level of convenience for customers, and potential increased business for restaurants, but they come at a significant cost to the food service provider. Some contracts between delivery services and restaurants stipulate that delivery customers cannot be charged more than in restaurant diners, even though there are significant costs attached to the delivery process. This results in increased prices for all patrons. Is the public willing to pay a premium for safety and convenience? Some businesses tired of the delivery fee limbo have created their own systems for delivery without the need to increase staff or hire delivery drivers. “Food drops” in city centers via a preorder system have allowed restaurants to provide a semi-delivery option to patrons outside of their immediate community. Staying relevant to your customers on the outskirts of your circle may help customers to return to your destination once they feel safe again.
The impact on restaurants has been a focal point, but the food industry was affected in many different ways. With businesses, schools and universities, as well as retail and processing operations locking down, the food distribution chain experienced a dramatic shift. Bottlenecks at milk processing plants meant farmers were forced to dump milk they could not sell through normal channels. Abrupt shutdown of restaurants meant that suppliers had to find alternate buyers, as orders were cancelled virtually overnight. In addition, the Food Research and Action Center reported that because of these disruptions, millions of children who rely on school breakfasts, lunches, and snacks were also affected. Farmers, canneries, fish/seafood packing plants, orchards, and plant nurseries are just some of the industries that rely on migrant workers. Travel restrictions and fear of close contact with others has impacted the availability of these transient workers.
Some of the long-lasting impact of the pandemic may not be so apparent. The food processing practice has seen significant changes. Food Engineering Magazine has noted that social distancing considerations must be addressed in the design of manufacturing, processing and distribution facilities. It is too early to determine what the increased safety precautions will mean. Creativity may be key to processing facilities transitioning during this time.
Forced quarantine and shelter-at-home edicts meant a resurgence of home cooking with more people preparing their own meals. Continued uneasiness about going out to eat or even get takeout may have changed eating habits, at least for the foreseeable future. Packaged food providers are another segment of the food industry that actually experienced an increase in demand and profitability. Meal delivery services are also seeing a surge in popularity. These services range from premade meals that just need heating up, to boxes of ingredients that need to be prepared and assembled into a meal.
More people cooking and eating at home, coupled with forced closure of some processing and distribution plants due to infection, has led to higher costs at the grocery store. People want to reduce their exposure and trips to the store, so they have been stocking up on food and other household items. Before March 2020, consumer spending on food was fairly even between restaurant/takeout and home preparation. According to Supermarket News, once the lockdowns started, there was a marked increase in grocery sales of 29 percent.
The Future of Dining:
- Back to basics, cooking at home
- Premade ready to bake meal deliveries services
- Prepackaged ready to make meal kits
- Third party restaurant food delivery services
The COVID-19 pandemic has changed the way we eat, possibly forever. As the economy reopens, people are anxious to resume their pre-COVID lives, including going out to eat, but many will be concerned about safety. Food service establishments may find that their biggest threat does not come from other restaurants but from their patrons themselves. People who have learned to cook may find they prefer the security of the at home experience – especially if it saves them money. Restaurants must make a concerted effort to assuage patrons’ fears by offering socially distanced contact-free experiences.
Will the changes in the food industry have an effect on the insurance industry? Increased concerns may increase the need for coverage, or changes in operations may require different types of coverage, so just like the food industry the insurance industry may need to get creative as well. Working with business owners to help manage the new risks and challenges ahead will be important for the future of dining.
This article was previously published in the NYIA NY Connection Magazine and is provided courtesy of MSO®, Inc. (The Mutual Service Office, Inc.) for non-commercial use only. For any other licensing requests or permissions, please contact firstname.lastname@example.org. © MSO®, Inc. 2021.MSO provides advisory services for all property and casualty lines except workers compensation. This includes customized forms and manuals for insurers, MGA’s and agents/brokers. Additional information is available at www.msonet.com.