Outlook For Luxury: Delivering A New Dining Experience

NEVER HAS AN industry been so vividly transformed as F&B, with the very basic human concept of sharing a meal with friends and loved ones shattered by the onset of the Covid-19 pandemic. Even as it shook the business to its core - with job losses, rental woes and plummeting revenues - it also raised the very fundamental issue of how people will eat in the near future, in a new climate where social distancing will be the norm for a long time to come.

With no clear guidelines post June 1, and the likelihood that government and rental support will not be long-term, some restaurateurs are still playing a guessing and waiting game. But for the bigger players, it's no longer a case of 'winging' it but coming up with real plans that could spell permanent changes to the restaurant model as we know it. We talk to three prominent restaurant groups to find out what their next steps are.

WEE TENG WEN Founder of the Lo & Behold Group

Soul-searching and painful manpower decisions have been the order of the day for the restaurant group that includes three Michelin starred Odette, heritage eatery Kin and natural wine bar Le Bon Funk in its stable, apart from casual concepts Over-Easy, Extra Virgin Pizza and Po in the Warehouse hotel.

The priority, says Mr Wee, is to have a game plan that will take the group through the short term new normal and the long term vision beyond.

That means mentally dismantling conventions and rethinking the restaurant business as a completely new one. "It's our view that the crisis will permanently change behaviours which is why we're looking ahead to map what a combination off-line/online model would need to look like both in terms of an offering and an operation."

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With the motto 'Transform to Survive', the group has been mobilised to carry out a 200-day business transformation plan. "The first 100 days will focus on adapting to the new normal, while the next 100 will be more future-facing."

There will be a two-pronged strategy. "The first is to diversify revenue streams with clear points of differentiation because revenue will not be what it was even when government mandates ease. Second, we're committed to making considered but swift decisions, and are prepared to 'hunker down and hibernate' if it means a greater chance of survival in the long run."

Takeaway and delivery business has been encouraging, even if it still makes up a small portion of overall revenue. "Odette stands out with revenue averaging 50 per cent of original revenue, while Kin, Extra Virgin Pizza and Le Bon Funk have all done well at around 30 per cent."

But it will be tough to maintain both delivery and dine in operations, which is why "delivery must be reimagined to be worth our while". That means replacing casual offerings with quality in-home experiences. "Odette is a great example of this. Great food any home chef would be comfortable finishing on your own, along with plating instructions that provide an element of interactivity."

The new restaurant model would therefore need to find the sweet spot between dine-in and delivery, while also taking care that "our restaurants are as safe as can be when we reopen.

"That includes looking into things like air filtration systems above and beyond the standard measures of sanitisation and temperature checking."

A long-term view is crucial, especially considering that government aid alone, "while expedient and relatively generous, "will not be sufficient to ensure survival for most of the industry," says Mr Wee. "After accounting for our foreign employees' salaries and the salary cap, government aid (JSS) only covers 40 per cent of total labour costs."

Ultimately he says, "The crisis has forced us to relook what we stand for and why we do what we do - feeding others is what gives us the most joy. We will emerge from this sharper and wiser, with increased clarity and gratitude for our people, customers and community."

LOH LIK PENG CEO, Unlisted Collection

Ghost kitchens for delivery. Social distancing, contact tracing and temperature taking. Serving staff permanently masked and restaurants re-designed differently with partitions. A greater experiential element to draw diners out of their homes. Fine dining restaurants which cater more to locals than foreign travellers.

These are some of the near future scenarios that Loh Lik Peng reckon might be the new reality for the F&B scene when Circuit Breaker measures are lifted and both restaurants and diners try to adapt to the new normal.

But no matter what form the restaurant of the future takes, the basic desire for a good meal will always be there, Mr Loh believes. "The pattern I see now is that people still want to partake of life, to go out and celebrate or socialise. They're still celebrating birthdays and anniversaries with good food and wine, but with social distancing and through video calls. What is also striking to me is that things like weekends still matter. People order more and better over the weekend. They go about their routines with adjustments. I see it as a good sign - people are generally not totally despondent."

As a group, Unlisted Collection - which includes restaurants such as Zen, Burnt Ends, Cloudstreet, Nouri, Majestic, Salted and Hung and more - is down but not out. Mr Loh is expecting a tough May "because we don't have the advantage of the buffer built up during the first week of April before the shutdown. It's likely we will remain shut or severely constrained well into June and possibly July so this is only the start of a long battle."

That said, "we have managed to secure some concessions from most of our landlords and with government help, it will help cushion our losses through the next few months and prevent them from being catastrophic".

One bright spot that is likely to turn into a permanent light is the takeaway and delivery business, which Mr Loh is cautiously optimistic about. "Most restaurants are doing better than expected, although we had fairly low expectations. Our early experience tells us that patrons remember us. We work on lower margins to push sales so customers see we are offering good value. It also seems that people seem to like cheesecakes of all types during lockdowns!"

While there doesn't seem to be any austerity drive in progress with a healthy demand for high end takeaway meals costing over S$200, "it's not sustainable," he believes. "People will still spend for special occasions but discretionary spending will inevitably take a hit. There is no escaping the recession to come and we are kidding ourselves if we think the spending will go back to normal."

As for long-term planning, "One of the first things is to ensure a more permanent strategy for takeout and delivery. We need to look at multiple sources of revenue and educate the consumer on the costs for delivery platforms. We also need to strike a better and more equitable balance with landlords, and think of how to design spaces in future. Maybe we could even work as a community of restaurants rather than competitors, so we can leverage strength in numbers to work better with delivery platforms and other vendors."

As for fine dining restaurants like Zén, "We are doing reasonably well for now but we are aware that things will get much more challenging. Restaurants like that around the world are designed to appeal to the global foodies with all the stars and 50 Best awards. For the foreseeable future we have to rely solely on local guests so we can only hope the market is big enough for all of us!"

But he does feel a growing sense of determination among restaurants and chefs to do what it takes to survive. "We are a resilient lot and we'll use up the last ounce of energy to do so. After the initial cloud of doom, most of us are up and straining hard against the yoke. There's no long term solution yet but we will cross that bridge when we get there."

DESMOND LIM Chairman, Les Amis Group

The first thing that Desmond Lim did when circuit breaker measures were enforced on April 7 was to rush to get delivery platforms in place for the Les Amis group of restaurants which range from casual to fine dining restaurants such as the flagship Les Amis and Japanese restaurant Aoki. The three Michelin-starred Les Amis, however, was the only one which has closed for the duration of the CB.

The pattern Mr Lim is seeing is that "midmarket Asian food and comforting Western food such as pizza and pasta do better than fullfledged upper mid and fine dining concepts". The group's mid-tier concepts such as Indigo Blue Kitchen have seen a surge in delivery sales since island-wide delivery was introduced, with higher sales on weekends and more advance orders as customers plan their meals for the week.

He feels that delivery will be the main business driver for the medium to long term, as he expects the ban on dining in to be extended beyond June 1, and even if lifted, business may not pick up so soon. "While we're looking forward to reopening, we are doubling our efforts to grow the takeaway/delivery business by improving our operations and launching new spin-off virtual branches of existing concepts and even new ones."

After all "Covid-19 forced us all to spin off takeaway and delivery concepts, which we would otherwise have not done; when in certain instances they can generate close to 100 per cent of pre-Covid sales, it may not be such a bad thing after all."

While other fine dining restaurants have gone the takeaway route, there are no plans for Les Amis to follow suit. But it may be a different restaurant when it is able to reopen. "We will need to revisit our business model - it has to be a smaller and nimbler operation with a lower fixed cost base. The high food and service standards remain non-negotiable, but the challenge is how to find the right 'mix' for a sustainable fine dining model."

Still, he doesn't think delivery will dominate in the long term. "Humans are social animals and we will revert to the old 'normal' once confidence returns, especially after a vaccine is found. But with working from home being a more permanent legacy of Covid-19, the demand for takeaway/delivery may not be as high as now but will still remain elevated."

WHAT THE CHEFS SAY

By and large, individual chefs are doing what they can to offer interesting menus for takeaway and delivery and adopting a wait-and-see approach when it comes to any permanent changes to their restaurant model.

Jason Tan, former head chef of the Michelinstarred Corner House, is still on track to opening his own casual fine dining restaurant in Tras Street in September, albeit with social distancing measures in mind. "The overall design concept will remain, but we are planning an alternative seating layout that will be Covid-19 compliant and yet provide an intimate and memorable experience for my signature Gastro-Botanica cuisine." In the meantime, he's also brainstorming ideas for home dining or meal kits while waiting to open the restaurant.

At the one-starred Nouri, its newly-created e-shop sees an ever-growing list of options from vegetable boxes to meal kits and even fullfledged tasting menus which diners have to prep at home. Sales have been strong, with the most popular items being its pasta sets created with artisanal pasta maker Ben Fatto and a collaboration with Copenhagen restaurant Relae.

"It's about being nimble and relevant," says chef-owner Ivan Brehm who says that survival rather than long-term planning is what's driving him now. While there will be no change to Nouri's physical premises post Covid-19 beyond the mandatory health measures, his upcoming lifestyle concept Appetite which has been delayed because of the crisis "is small and versatile enough to continue with events, dinners and drinks that will fall well within safety guidelines."

As for the two Michelin-starred Zén, which has been enjoying a strong response to its fine dining takeaway menus, head chef Tristin Farmer says, "I do not foresee the fine dining experience being majorly changed for customers. We will need to adapt to the new trends for sure, but for our guests I hope fine dining won't be impacted or even become better."

While the clouds have yet to clear, what will remain is the appetite for good food, regardless of what form it takes.