Adapt or perish -A tale of restaurant business innovation during pandemic crisis-

By the time COVID19 was officially declared as a global pandemic, few people expected that a health crisis of such magnitude would impact the world economy so severely. The few who however foresaw a similar situation, never imagined that it would last so long. Much less that, after 15 months, there would still be no certainty when it would be finally controlled.

Since the first wave caught a completely unprepared population off guard, many small industries around the world had to close their doors. Others, with more luck, managed to adapt little by little to the change. The worldwide tourism and restaurant industries have been some of the most dramatically affected and have therefore had to rethink their business vision to survive in a world in crisis.

The health measures implemented by governments worldwide limited the spread of the virus. Social distancing, the use of masks and the partial or total closure of public places, however, forced small, medium, and large restaurants to adjust their operations to retain customers and generate some income. The world was forced into social distancing.

But the change did not come only from governments. With a virus that is still not fully understood, customer preferences also changed dramatically. Clients stopped feeling safe in crowded or closed places. According to Statista, a business data platform that collects information and facts in 170 industries and more than 150 countries, social distancing measures and general caution towards public places caused many consumers to dine out less. According to them, the year-over-year decline of seated diners in restaurants worldwide, compared to 2019, was 21.67 percent on April 25, 2021.

The strategies the restaurants had to adhere to, range from the application of new technologies to limit contact, such as the use of QR Code menus, payments with tap-and-go credit cards, delivery apps, as well as the increase of the online presence, using platforms such as İnstagram or Facebook as a space to purchase orders or to, in increasingly creative ways, keep in touch with their customers. The rise of drive-thru, take-aways and outdoor dinners, among others, were also some of the adjustments that had to be implemented. Many of these changes are expected to persist even after the crisis is under control.

Adaptation for survival – The example of Eataly İstanbul

The pandemic affected smallest and biggest restaurants alike. In the case of Eataly, an Italian slow-food based philosophy business model, founded in healthy food and support of the local producers with presence in cities such as NYC, Tokyo, Seoul, Sao Paolo, Stockholm, Moscow and İstanbul, they had to re-examine operations to adapt to the new normal. With a proposal that includes restaurant, shop and school services for the culinary arts, Eataly had to change its main market, restaurants, focusing among other things, on strengthening the production of precooked foods that could be sold in its markets.

For Claudio Chinali, executive chef in Eataly Istanbul, where the distribution of the business in the pre-pandemic time consisted of 65% focused on the restaurant, 30% on the market and approximately 5% focused on training activities, the impact of the first COVID wave was devastating. ‘The bigger money-maker for the business was closed down’ Claudio said. The restaurant service in Istanbul, which in the pre-pandemic period had between 4,000 to 5,000 covers every day and worked with a team of 80 to 100 employees depending on the season of the year, was reduced to about 100 online orders and a team of work, reduced to 30% of its capacity. This because of the lockdowns periodically imposed by the Turkish government.

Claudio Chinali – Executive Chef in Eataly İstanbul

On the other hand, orders at their market increased dramatically as customers began consuming from home. The demand for items such as alcohol and bread increased exponentially. It was then that Eataly Turkey understood that they had to adapt to change to survive.

Mr. Chinali reflects on the fact that their business model has changed because it had to. İt was a matter of survival but had to do so smartly and without compromising the distinctive Eataly philosophy. For this they are producing more in the house to maintain some margins ‘we are trying to produce as much as possible to fulfill the new demands’ whilst they started creating ‘ready to use’ products. Striking a balance between Italian tradition and pandemic driven limitations is a tough one, at the end of the day we all know that risotto should be eaten as soon as it comes out of the kitchen and that pasta must be consumed al dente.

Ready-to-use tomato sauce for pasta – Eataly

Adaptation is a must, or you perish

Then the pandemic stroke. Innovation and adaptation are a must, or you perish. Ready pizza base, precooked in the oven ‘the clients only need to add things to the top and cooked for 5 minutes and they will have Italian pizza at home’ Claudio explained. Exactly in the same line they now prepare ready lasagna, pesto and tomato sauces, tiramisu, panna cotta, among others. They also increased their production of cheeses. All these products are prepared in Eataly’s kitchen and sold in its market. The restaurant then began to function as a delivery space. ‘We need to be fast to understand the market, this is very important. At the beginning we didn’t want to make pizza base, but now we sell 40, 50, 60 a day’, Claudio said.

Still the implications of this pandemic in the restaurant business are unfolding. There will be time to look back and do a more objective analysis. For now, chefs and restaurant owners must work on the go, trying to adapt as fast as possible. Maybe the biggest lesson this pandemic taught them is that they need to be prepared to react quickly to any future crisis. For Claudio, the pandemic gave a confirmation: ‘You have to learn to work with very back of the house. Since each lockdown represents a loss of money, it is very important to learn to work with fresh and seasonal products. With very little stock to avoid the expiration date of the goods. We should be elastic. We should be purposeful’.


6 Comments
Flora

June 5, 2021 @ 7:35 am

Reply

Muy buen análisis Ali, una realidad que ha impactado terriblemente a los pequeños restaurantes en Bogotá y han tenido que cerrar sus puertas definitivamente.

Alicia Santana

June 7, 2021 @ 4:15 am

Reply

El mundo entero esta sufriendo los efectos de la pandemia. Muchos pequeños restaurantes han cerrado sus puertas y los grandes restaurantes o los pequeños restaurantes gestionados por familiares, han tenido que cambiar sus operaciones para adaptarse al cambio. El mayor desafio será el de mantenerse a flote en el post pandemia

Christel

June 5, 2021 @ 11:00 am

Reply

Nice my friend. I enjoyed it very much. Now looking forward to the next one, on-line cooking classes as an adaptive strategy 😘

Alicia Santana

June 7, 2021 @ 4:13 am

Reply

Working on it!
Thank you my friend

María machicado

June 5, 2021 @ 11:09 am

Reply

Excellent overview of a true challenging moment and reinventing business. Great piece! Very well written, congratulations!

Alicia Santana

June 7, 2021 @ 4:12 am

Reply

Thank you Maria for reading it. İndeed, it is a challenge moment, and not only for the restaurants, but for all business that need the public

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