Disclaimer: This article was also published on UnileverSGCareers account on 20th May 2020，when I was the Head of Digital and Growth platforms for Unilever Food Solutions, the foodservice arm of Unilever. The views stated here are mine and do not necessarily reflect the views of Unilever Food Solutions.
Since the COVID-19 hit, the majority of the F&B businesses are playing catch-up and paying the costs of delayed digitization. Without a strong brand or existing scale advantages, everything from getting sufficient visibility online to sorting out the right delivery logistics will continue to be an uphill struggle.
Here’s a peek on the watercooler conversations now happening in this space:
1. From Food to Fad — Applying Hype culture to foodservice
As people continue to shift more of their meal occasions from dine-in to delivery, this means that restaurant competition just went from brands within walking distance, to brands within delivery distance.
In such a competitive climate, having insights into what diners will crave becomes more important than ever. How can restaurants successfully leverage such hype-seeking behavior in delivery? One can look to street fashion for inspiration. Fast fashion and social media has completely upended the rules of marketing by creating an entire consumer culture around the latest ‘drops’, a limited release of merchandise that is often a marketing technique by streetwear fashion brands.
Food has all the preconditions for hype. Instagrammable? Check. Novelty seeking behavior? Check. The relative accessibility of food prices, coupled with many bored people at home, suggests a good torque on this flywheel.
The Unilever Food Solutions team in Indonesia generated hype in Indonesia by partnering with popular coffee chains like Ali Kopi and Kopi Ketje for the well-loved Bango sweet soy sauce brand. Durian, local coffee, and Bango — what other combination could be more representative of Southeast Asian food sin?
This went viral with Millennial and Gen Z diners, who went on to replicate their own versions at home. This was great for both B2B and B2C revenues, but importantly, also gave Bango fresh relevance in a fast growing, foodie community.
2. From Out-of-Home to In-your-Home — Hello, branded meal kits
Covid-19 did what many mothers could not – inspire a whole new generation to start cooking.
We see the rise of the Meal Kit, a set of pre-portioned and sometimes partially-prepared food ingredients and recipes sent to consumers to help them prepare a home cooked meal. From the DIY Bubble Tea Kit by Singaporean brand Liho to F&Bs like Ajhumma Korean and Open Farm Community offerings, Meal Kits are a new additional revenue stream that we will continue to see post-covid.
Ecommerce platforms could easily extend their F&B listings to include branded F&B meal kits. Those with pre-existing cold chain capabilities, like Lazada’s Redmart will enjoy a further advantage. Delivery players like Grab or Gojek can also tap into their existing customer base to launch the meal kits through their grocery verticals like Grabmart or Gofresh. Meal + Kit combinations for lunch and dinner can help better delivery cost ratios.
It’s a win-win as the online partners’ reach, logistics muscle and offer depth, makes buying meal kits more intuitive and attractive to consumers. The platforms in turn benefit from reduced acquisition cost due to ability to springboard off the F&B’s loyal customer base.
3. From Foodservice, to Food-as-a-Service — A Tale of Two Kitchens
After the pandemic, two very different models of Food Service will be created as Living-to-eat and Eating-to-live become distinct needs.
Eating-to-Live – Chain restaurants who have better unit economics and deeper pockets are better placed than independents to weather the storm. Coupled with the rent trauma, this will turn some to explore ghost kitchen models to serve a wider customer base without the proportionate increase in overheads.
While the impetus to open ghost kitchens is undoubtedly to bring down the costs of expansion, such centralized digitization of meal production means that there is potential for a more data-driven and personalized approach to creating meals.
A subscription to a central kitchen, or Spotify for Meals, that offers a variety of food with customizable diet options, delivered to their current location (office, home, or even the gym) can help to deliver food variety without compromising diet outcomes.
On the other hand, Living-to-Eat where indulgence is the pursuit will be actively sought after too. My bets are on farm and table experiences — provenance tours, where hyperlocal ingredients meet globally inspired cooking. Experiences that allow diners to not just eat the food, but to see, touch and smell the process.
4. From Hyperglobal to Hyperlocal — Lessons from the Karang Guni man
One outcome from the crisis is the realization that we are not just a global network of individuals, but a global network of communities. We have seen a lot of non-profit and commercial activities providing hyperlocal services and goods spring up. For example, voluntary shopping on behalf for vulnerable elderly, initiatives to support nearby F&Bs, and even mobile supermarkets.
What if these hyperlocal activities can be optimised to create a local services and goods ecosystem, leveraging on the efforts of neighbourhood residents, that minimises costs and waste outputs?
A less high-tech, but tried and tested model is the Singaporean karang guni. They are a form of rag and bone men who collect used items like newspapers for recycling. By following a set route to neighbourhoods at specific times, my grandmother would know roughly when to expect him, and can collect newspapers beforehand to make a few extra bucks.
In the vocabulary of distribution, the karang guni man is the hub, and my grandma is the spoke.
Adopting this model, this could mean new hyperlocal F&B delivery models, like scheduled neighbourhood visits from food cum grocery trucks, optimized for demand surge periods, that can help to make unit economics more sustainable. This last mile will be further supported by neighbourhood walkers, like grandma, covering the last few meters from truck to door.
5. From Competition to Collaboration- Moving ahead together
F&B digitization is hardly a new topic, but Covid-19 has created both the indisputable rationale and sense of urgency for players to transform. What this crisis has been is a rallying call for F&B community to work more closely and progress together, not as separate entities, but a dynamic and integrated ecosystem.
This April, our team initiated the #UFSunitesFnB programme, beginning in Singapore, that aims to leverage the industry’s strength in numbers to advance F&B digitization efforts. The initiative sprung from a simple collaboration with Carousell to provide F&B operators with an affordable visibility option during the social distancing measures. As more partners were inspired by this effort and approached us, we realized that there was more that UFS could do as a leading food service supplier to help enable and integrate the ecosystem.
Collaboration and experimentation is necessary moving forward as it is unlikely there is one universally perfect solution for digitization and F&B transformation that works across all concepts and diner profiles.
To give an example, while smaller establishments find Carousell simple to adopt, larger restaurants with multiple outlets may prefer the more sophisticated promotion options offered by Lazada and Shopee. The most advanced F&Bs have their own website and marketing teams that use Google and Facebook tools to promote their restaurant.
Against these five shifts, the simple message is that the days where F&Bs are simply food production sites bound by the four walls of their kitchen, physically, financially, or conceptually, is officially over.
F&Bs today need to see themselves as an evolving BRAND that guarantees a specific food experience/occasion, and work continuously with partners in the ecosystem to find new ways to delight and deliver.
In such a world, the ones who are able to quickly transform and leverage digital, data and ecosystem partners to make strategic choices around their customer journeys will be able to rise above their competition.
Ji Ching, Tang is currently the Head of Digital Transformation and Growth at Eu Yan Sang, a 141-year old Traditional Chinese Medicine brand with 200+ clinics and retail outlets regionally. Having headed the digital strategy at Unilever’s B2B Foods business previously, Ji Ching collaborated with new and established partners across the value chain to facilitate digital transformation for both the Food Solutions business and the F&B industry. Her work has allowed her to support, inspire and progress the livelihoods of 500,000 chefs around South East Asia. In her current role, Ji Ching hopes to apply her marketing and digital experience to democratise access to TCM wisdom for the next generation, empowering them to live healthier and fuller lives.
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