On Why Big Restaurant Groups Should Team Up with Their Local Independent Restaurants
The pandemic has decimated several industries while nurturing the growth of some. It has forced us to retreat public spaces and into our own private dwelling places. With the decreased social interaction, we have seen the demise of countless enterprises across the board which involves some sort of human contact. This is particularly true for the food service industry, notoriously popular for its low margins, season-dependent profits, high upkeep, low wages, long hours, etc. Small operators were swept by the wave of bankruptcies following several months of lockdown across the globe.
Regardless of the operation size, the crisis has brought down to its knees even the big players in the arena, I’m talking about restaurant groups needing to close their locations since trying to keep it open would be more ravaging. This is considering they actually have the means to utilize other strategies to reach their market (own delivery system, mobile phone apps, etc.)Just as all the world governments took handling of the crisis in a disunified manner, all the other industries were basically left to themselves to try to figure out their own way, in anyway, through this crisis.
If by any stroke of luck and stubborn persistence a restaurant has been staying afloat in the midst of this tsunami, many players have been pondering on the future of dining and ultimately how its dynamics will be.
Now that we’re realizing that the promised light at the end of the tunnel seems to be just moving further off away as we reach it, can the industry players, big and small, formulate a treaty that could save the looming crisis that’s threatening to cause more disruption in the whole sector in the coming months?
The Dynamics of Big and Small Players
The positive-sum game caused by globalization of our era has created an unparalleled level of prosperity on all levels of the restaurant industry. Small and independent restaurateur and chefs, with their high risk gambles, drive creativity while bigger players such as your local restaurant group, with their much extensive resources, provides stability. A vibrant and thriving local restaurant scene is the result of the synergism of the two. Together, they create a conducive environment for progressive innovation balanced with enriching economics.
Alone, the bigger sector would be able to provide jobs for the locals but due to its bureaucratic structure and risk aversion, there would be too little to zero chances of having fresh and novel ideas to keep the scene vibrant. On the other hand, small restaurants would certainly generate a soulful dining scene with its avant-garde trailblazers but could potentially experience burn out thereby risking high staff turnovers. Equilibrium is essential for its steady growth.
However, we are seeing the rise of a third class of participants, the disruptors. A class that if left unchecked, could topple over the whole balance of the system.
Enter food delivery companies.
The Third Wheel: Delivery Companies and their Big Data
Delivery companies have been around quite recently, but with the exponential growth of digital technology, it has received an unrivalled advantage over the traditional food sector providers- Big Data.
Run by ever-advancing algorithms and fueled by consumer data, such companies, which are commonly accessed via mobile phones, have somewhat been both the saving grace and cause of alarm for many. During the start of the crisis, these companies appeared to be the only lifeboat restaurants have in order to stay afloat. But once people got the hang of it, many are starting to feel more comfortable in having their meals delivered to their doors than to actually go back to restaurants. In a way, it has already been changing the perception of what dining could be. This coalescing with the current culture of instant gratification (all things delivered in a press of a button) is probably the biggest looming threat facing the hospitality sector. Add to that the immense power of customized Big Data suggestions based on consumer preference, we are seeing a lesser need for service professionals.
Jointly Forging the Path Forward Is the Only Way
Now that we are realizing that the dynamics of the whole industry is changing with the rise to power of the third players, how should the parties involved act in response to this revolutionary powerhouse? Will the bigger parties, who have more capital and means, even be willing to cooperate with the small, independent players when they know they could absolutely function without them? Let’s remember that the only thing they haven’t really figured out is to actually make the food. But is it really the case? What if they just decide to partner up with local manufacturers (the ones supplying your local grocery stores) and have some ready-to-eat-foods curated by their mighty algorithms?
So many questions, yet we all seem to know intuitively the answer.
Unless the executives of these intelligent companies want a ghost town, characterized by the majority of workforce teleworking, not to mention the countless number of would-be displaced food industry professionals, I don’t suppose we would be heading in that direction, yet. Cultural shifts, however slow, are inescapable. It only takes a few generation with different set of values before the norm is replaced by the novel.
The only way then is for everyone onboard come up with sustainable and enduring solutions that could future-proof the whole industry particularly the vulnerable ones (smaller operators) who provide much diversity and generate innovative ideas. Every city’s restaurant scene is only as strong as its local community, its ultimate distinct feature that allows it to stand out from the rest.
If we can not do it together, the ultimate price we will all have to pay is soul-less dining.