F&B Will Recover … But Not Quickly

Posted June 12, 2020 at 10:23 am



In a TRSA webinar sponsored by Kannegiesser ETECH, food-and-beverage analyst Robert Byrne offered  a guardedly optimistic scenario for the restaurant industry. Paraphrasing the author Mark Twain, Byrne told some 50 online attendees on June 9 that “The rumors of the death of food service have been greatly exaggerated. (For) all of the reasons that we love this industry, they’re all going to be back.” But don’t expect consumers to return overnight, said Byrne, senior manager, consumer insights, for Technomic, a leading F&B data-tracking agency. Battered by COVID-19-related closures, the restaurant industry is unlikely to see a return to 2019-level sales until the second half of 2021.

What are laundry operators servicing this sector supposed to do in the meantime? What they’re already doing, Byrne said: providing creative solutions to help restaurants as they reopen – particularly regarding the new and critical mandate to provide safety – both for guests as well as staff. “Shine a bright light on the safety that your products and your services provide,” he said. “Shine a bright light on how you are supporting the health and well-being – for not just the diners but for the employees in this current environment.”

In addition to safety concerns, restaurants face huge challenges as restrictions on indoor dining are lifted in various states across the U.S. Byrne described a “Four ‘S’ process of recovery for restaurants after sales endured a “fall off a cliff” in March/April.  The first “S,” Survival is roughly where restaurants are now. There is movement toward reopening and entering the second “S,” the Start phase. As the industry recovers, it will enter a “Strengthen” phase and then finally as reinvestment and growth take hold it will “Surge.”

In the meantime, sales have cratered by 70%-80% on average as restaurants have sought to get by on carryout orders. Fine-dining restaurants have picked up on the trend as well, with 42% now offering carryout service, Byrne said. About 8% of chain restaurants aren’t expected to survive the COVID-19-fueled recession that began in March. Especially painful for laundry operators, some 14% percent of independent restaurants also are expected to close permanently.

For those that carry on, finding creative solutions to deal with the new normal are a must. One of Byrne’s PowerPoint slides showed a photo from a “Twisted Citrus” outlet that’s using clear plastic shower curtains as a simple yet affective way to ensure social distancing without spending a fortune, or ruining the spirit of sociability that restaurants excel at providing. There’s no reason laundry operators couldn’t offer these or similar products, in addition to the cleaning supplies, hand sanitizers and paper goods that have offered rare areas of growth in recent weeks. Another response to the COVID-19 that Byrne highlighted was a slide showing a photo of a German restaurant where patrons wear straw hats with fixed with Styrofoam pool “noodles” to help ensure social distancing.

These sometimes-whimsical responses won’t immediately fix the problems of consumers who’ve lost incomes or now work at home and have had work schedules that previously accommodated restaurant visits turned upside-down. Overall, the restaurant industry, including school and colleges, earned $940 billion in 2019, Byrne said. The figure for this year is expected to drop between $105 billion to $150 billion.

The good news is that better times lie ahead. Byrne’s forecast for 2021, predicts a likely pickup in restaurants as better COVID-19 treatments and/or a vaccine comes online. Based on the company’s research, Byrne predicts the industry will land somewhere between a “Best” and “Worst Case” scenario on a range of issues, including growth. The bad news? Even with a fourth-quarter recovery, Byrne predicts a 22.4% drop in sales in 2020. That puts the F&B trade back to where it was in the late 1990s. For those F&B laundries that can make it through the next year or so, there’s reason for optimism in that Byrne’s research shows that consumers value restaurant visits (49%) more than any other social activity, including “hanging out with friends and family,” “going shopping” (31%) or “traveling” (26%). That’s a good indicator that today’s “doom-and-gloom” scenario will give way to renewed growth for those operators that can endure and adapt by partnering with restaurants.

Since the COVID-19 crisis broke in early March, TRSA has aired nearly 30 webinars on the pandemic and related issues. You can access Byrne’s presentation and other TRSA webinars through TRSA’s on-demand learning library, which allows you to “live stream” all of the association’s webinars. TRSA members can purchase nearly 150 webinars, and other training and educational resources at reduced member prices. Visit www.trsa.org/ondemand to go to TRSA’s On-Demand Learning portal to view this webinar and more.

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