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The lockdown has brought the F&B industry to the brink of an existential crisis: Manu Chandra



First there was panic surrounding the coronavirus pandemic, with people gradually shunning public spaces like restaurants, hotels, pubs, etc., and then came the nation-wide lockdown that almost brought the F&B industry to a screeching halt. As lockdown norms continue to be eased across the country, we speak to Manu Chandra, the head of the Bengaluru chapter of the National Restaurant Association of India (NRAI), about the impact so far and the way ahead.
How badly has the F&B industry suffered due to the lockdown?

At the moment, it is hard to gauge the kind of losses we will incur in absolute Rupee terms. But it is staggering. We are a 50 billion dollar per year industry across the country and at present we are compromised by at least around 15-20% of that. It is substantial enough to create an existential crisis within the industry, as it is a business that works on a deferred payment model. With the kind of debts currently, it will be hard to service that amount, unless we have some level of revenue coming in.

How hard is it to keep the morale up for your workers?
It is tough times for us as a business, industry and as employers. We are a very large industry in terms of employment. We are probably the second largest employer of human capital after agriculture. To be able to give them confidence that we are not abandoning them and that we are trying to tide this over together is the important message. We encouraged people to cash out EPF when the order came about, to ensure there is cash flow in hand. Keeping up morale for people who are active and who cannot work from home is very difficult. We are a brick and mortar business that is into food provision, so we cannot work from home. If we are not on the job, it is difficult, as there is no activity they can do at home. Some of our senior chefs in the company can definitely be more active on social media and continue to stay relevant and connected to the consumer. We’ve been doing that, but that doesn’t really translate into what someone lower down the order can do. It is frustrating and we are trying to wait it out.

What will it take to get customers to return once operations resume?
This lockdown is a reality check. It is not going to drive the discounting deeper. What had happened, and I understand that consumers were at a win-win situation, was that there were a lot of players in the market who were getting funding to market themselves as the best player. This funding was channelled into very heavy discounting. The cheap booze and food available for consumers across the country was being footed by somebody else. The way the economic paradigm stands now, all that is going to vanish. So, the fair price that is to be paid is going to emerge. Unless it is a very desperate business that requires undercutting to attract consumers, I don’t see it happening. I actually see a rising of prices. This inflationary trend is connected in more ways than one. When the lockdown kicked in, it was the peak harvest season for the ragi crop. But the migrant labour that harvests the crop suddenly disappeared and went to their hometowns. What happens to the crop that lies there? By the time the government directed that agricultural activities could continue, it was late. These are perishables. So, supply chains got hit very hard. I don’t think we are going to open at a best case scenario. We will be meandering through a lot of these impediments into getting back to smooth operations. A lot of us will not have our workforce available as well, since they have fled to their respective hometowns. It is not going to be a return to normalcy. It will take a while. And it will not be a cheaper paradigm either.

Will dining out become a secondary option, as people, especially millennials, have learnt to cook special meals at home?
As an activity, a lot of people have discovered that it is very therapeutic and rewarding. I love the fact that people are cooking and sending food across to different people’s homes. The gifting is actually through food now. A lot of recipes are floating around and people are trying them out. I think this is a trend that needs to continue and it will correct some anomalies in the food space. There were places that were selling bread and jam and it was their USP – that is barely what one needs to go out and eat. We had got to a point where almost everything was driven by availability and choice. There will a bit of correction with regard to that. The race down to the bottom may be rectified and as a good restaurant ecosystem should be – good quality products and produce and honest, high-quality cooking and good talent are what are going to be celebrated.

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