Dining out seems like a far-fetched dream right now. One of the most impacted industries by the coronavirus pandemic has to be the travel and hospitality sector. Dine-in restaurants and bars were shut down even before Prime Minister Narendra Modi announced the nationwide lockdown.
Only last month, Indian foodtech players took pre-emptive actions against a problem likely to further strain the industry and its millions of workers – customers’ hesitation for sociable activities, multiple touchpoints for transmission of microbes, and more. ‘Contactless’ seems to be the buzz of the future.
However, Noida-based dining out and table reservation platform Dineout claims to have initiated ‘contactless dining’ way back in 2015.
With services that extend beyond contactless payments and menus, and exploring contactless valet and queue management systems, Dineout has been helping restaurants like Café Delhi Heights and Absolute Barbecues even before ‘social distancing’ became a day-to-day phrase.
The startup believes that although it may not turnaround a consumer’s confidence in eating out once the lockdown is lifted, contactless dining will allow restaurants to operate with more confidence and fewer challenges. Further, it will promote hygiene management and help restaurant owners understand customers’ dining preferences better.
YourStory recently spoke to Dineout Founder and CEO Ankit Mehrotra to discuss the future of restaurants and how contactless dining will be the new normal post coronavirus. The startup has 20 offices across India, the largest one being its headquarters in Noida.
Before the coronavirus pandemic, Dineout processed more than 20 million diners and $800 million-worth transactions across its partner network of 50,000 restaurants in more than 17 cities. It claims to have more than five million monthly users. The company has expanded to the UAE, Bahrain, Kuwait, Saudi Arabia, and East Africa.
Edited experts from the interview.
YourStory (YS): What effect did the coronavirus pandemic have on the foodtech sector?
Ankit Mehrotra (AM): The coronavirus pandemic has transformed consumer behaviour forever. As several businesses shut shop, there will be significant job losses across domains. However, the foodtech industry will sooner than later adapt to this new normal and bounce back.
Lasting impacts will be around digital innovation and the use of technology for better experiences, hygiene and safety, and backend automation to optimise costs. Companies are re-imagining digital alternatives to execute daily operations in the F&B industry.
At Dineout, we are heavily invested in modifying and improving restaurant-diner interactions to create an environment of convenience, trust and support.
YS: Can players in the foodtech industry survive only after changing their business models?
AM: Food brands will make changes to their business models to survive. Some establishments would want to have delivery and takeaway as a new revenue line, which is completely different from dine-in models. Companies will have to re-engineer their menus, work on the logistics and hygiene costs to make the business profitable.
In fact, aggregators will have to rethink how they can better help restaurant partners over and beyond just giving them additional footfall. Vendors supplying to restaurants will need to tweak their models to ensure hygiene and safety of materials, and reduce credit period to manage their cash-flows.
YS: What is contactless dining and how does it work?
AM: Contactless dining is a method that can minimise customer contact with anything that someone else might have touched. This can be done simply by removing high-touch elements at restaurants and other F&B establishments.
A full-stack tech-enabled dining experience includes the use of digital menus, pre-ordering options, online waitlist management, contactless payments, and even a digital valet. This also ensures the lowest risk to public health.
Moreover, contactless dining doesn’t take away the physical touch required inside kitchens by chefs or by waiters serving food at the table. That human element is still extremely important, and restaurants will need to work out ways to ensure hygiene by use of masks, gloves, and regular sanitisation, besides following the basic hygiene etiquettes.
YS: What is the investment mentality in the foodtech industry now?
AM: It’s a bit early to judge the impact specifically on the foodtech industry. However, due to the current economic crisis, we believe funding will be difficult for the next six months at least.
Post that, investor focus is likely to shift to players leading tech innovations in the foodtech space.
YS: How long do you think it will take for restaurants and foodtech players to bounce back to normalcy?
AM: After the lockdown ends, diner footfalls are expected to be low. In China, where average dining-out instances are 28 per month, Dominos is still operating at 30 percent of the pre-COVID-19 business. This is even after the situation is starting to get back to normal.
India stands at 4.1 dining-out instances per month, on an average. Thus, the impact will be as bad, if not worse.
However, it’s not just a diner’s concerns about healthcare and sanitation that will lead to this. The economic slowdown will hamper consumer spending power for the next few quarters. Dining out is largely looked upon as a discretionary activity in India and is heavily dependent on general economic sentiments.
It will take at least six to eight months for any form of normalcy to return, assuming we are able to flatten the curve further and get some medicines or vaccines out in the next six months.
YS: What does the future of restaurants look like?
AM: As a technology partner to more than 10,000 restaurants, we clearly see that a lot of stand-alone outlets have had to let go off their staff, or have implemented pay-cuts to manage their cash-flow.
They will also be looking to run with downsized operations as they expect social distancing guidelines from the government allowing only 50 percent occupancy until it is absolutely safe.
We also foresee more than a quarter of restaurants shutting down for good and not opening ever again. However, once the dust has settled, restaurants have to come up with a revamped dining out model.
YS: Do you have any advice for foodtech players on how to cope with the persisting scenario?
AM: Takeaway is going to emerge as a key revenue line along with home deliveries for most restaurants and foodtech players. They will also have to tag restaurants based on their hygiene audit to build incremental consumer confidence over time.
Some of the things that will become a part of the “new normal” for restaurants would be contactless dining, regular hygiene audits by certified agencies, regular check-ups or health tie-ups with agencies to manage the health of employees, and new material management processes.
In general, people will steer clear of restaurants if they do not know how their food has been prepared and who all have touched it along the way.
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