The Covid-19 pandemic has seen us accelerate towards a cashless society, shop everything online and order food through mobile phone apps. For operators like McDonald’s, KFC and Domino’s, this has all played into their strengths, while for others the transition to takeaway or delivery service through restaurant kitchens or dark kitchens has been a vital lifeline. Here, we catch up with industry experts Mike Faers, David Vagg and Karl Hodgson to hear their views on the changing landscape and its impact in terms of equipment.
What impact has the pandemic had on takeaway food and/or delivery?
MF: After many years of creating concepts and consulting on dark takeaway and delivery brands for Wagamama, Domino’s, Uber Eats, Deliveroo, TRG, Foodstars and Taster to name but a few, at FIS Group we went on to create and launch our own delivery brands to both operate and potentially franchise.
This gives us a unique view of this sector as both consultants and operators. Put simply, the pandemic has caused a seismic shift in our industry and, in particular, to delivery. This in turn has impacted the high street and accelerated the trend we have been seeing for the last decade, namely a shift to the ‘I want what I want when I want it’ generation who are quite comfortable ordering takeaway and delivery three times a week.
This is further enabled with the rise of the tech platforms (Deliveroo, Uber Eats, Just Eat) and the circle is complete. This means we have seen a significant increase in the number of start-up entrepreneurial brands, which makes sense as the cost of market entry is now much lower. However, the number of competitors has also increased so you need to get it right to both thrive and survive.
DV: The period between 2017 and 2020 saw almost 40% growth in delivery sales. Many struggling high street venues, along with other retailers, had seen a significant benefit from having a delivery option, where most were happy with around 10% of delivery sales. The pandemic has dramatically changed this. Takeaway and delivery are now the lifeblood of restaurants, big and small, the length and breadth of the country.
Whilst there will be some clawback post-pandemic, it is very clear this drive to more delivery will continue. The UK, while a big European delivery market, is significantly smaller per capita than others such as the USA and China. Delivery fits with the way many people now lead their lives — it is a lifestyle choice. In many cases, customers spend more on their delivery order and will order additional items — so there is a clear reason to get it right.
KH: To put it into perspective, the spend in takeaway for the UK in 2007 was £7.4 billion and in 2021 it is likely to be £11.2 billion, up 9% on 2019. I feel, though, that the acceleration will slow once some kind of normality returns and we can go out to eat again. We are social beings, we like going out and socialising. I don’ think the desire to meet with friends and eat out has changed.
Large QSRs are also now offering delivery services. How have they had to adapt? What are the key operational aspects that make them successful and has kitchen equipment played a role?
MF: QSRs are generally set up very well to work a delivery service. They are used to serving customers quickly and accurately with drive-thrus, and with delivery and collection already in their portfolio they are ahead of the curve versus high street operators. Equipment is important, the procurement lenses of selection are: speed, capacity, durability, total cost of ownership and, of course, space. It has required some additional thinking around hot holding and work flows to optimise operations.
DV: Many QSRs have focused on three key areas: dine-in, takeaway and drive-thru. In recent years, this has expanded to include delivery. Management of the delivery process is crucial. Scheduling for delivery is a key part of the business, not as an add-on — it is the first step to success. You must have the right equipment to assist in delivering the right food at the right time and meet the expected temperature and quality parameters. Equipment must help ensure hot is hot and cold is cold. Having the right storage capacity at the point of preparation that helps this and allows staff to focus on preparation rather than constantly restocking their workstation assists in this.
KH: Large QSRs have seen their revenues grow, thanks to delivery. This means outlets have had to be able to cope with the speed and pace of orders coming in. The QSRs I work with are hugely disciplined. We’ve been able to help them with that by providing refrigeration that enables their staff to stay at their stations so they can deliver what they need to, quickly. In addition, our fridges are praised for being efficient, reliable, easy to access and operate. This is essential in a busy and often 24-hour operation. It allows revenues to grow while keeping costs low and increases profitability.
With such pressure on businesses currently, can firms which run takeaways or delivery services expect to be successful and make a profit?
MF: It is always a challenge to make profits in our industry but the good news is you can. It was already a key part of an operator’s strategy and will continue to be so. Post-pandemic, however, we will likely see a high street resurgence as we all celebrate being allowed back out to socialise but then it will settle back and we will see some operators drop out of the market.
DV: Covid-19 has made operators focus on delivery — it is no longer a bolt-on but an integral part of today’s world. With the right attention to detail, it can be a profitable business, whether standalone or integrated into the broader business model. In my opinion, the vast majority of operators will continue to run and grow their delivery option post Covid-19.
KH: Delivery charges make up 20% to 30% of the takeout order. This affects operator margins greatly. The pressure on the front end of a business means that venues need to ensure every other area of the operation is running efficiently. Firstly, everyone should buy smart when purchasing kitchen equipment.
What looks like a great deal initially needs to be reviewed together with the running cost and lifetime cost of the equipment. I hate to see venues that have bought what looks like ‘great value’ fridges only to find they are paying a fortune in electricity costs, or don’t get a stable temperature and are having to throw food away. Lower running costs and less waste keep profit margins intact.
What key things does an operator have to bear in mind when it comes to maximising efficiency and minimising cost?
MF: The key to this is a well-designed menu and supply chain linked to a great kitchen design that enables delivery. You can’t think of this in the same way as you would when designing a restaurant kitchen — it’s a different thought process and, consequently, the equipment needs to be flexible.
DV: Reducing waste — whether food, time or energy — is critical to all foodservice companies. Ensuring correct staffing levels to meet demand is essential. Too few staff and orders are delayed, delivered cold and poor customer experience achieved. Having the right food, in the right place, at the right temperature ensures customers receive the right product. And the right equipment and management of ingredients will reduce wastage of food and energy.
KH: Yes, the main consideration is efficiency — footprint efficiency. Having the correct kitchen equipment in the right area saves time and money. Adande drawers give you greater capacity in a smaller footprint. The fact you are able to control the temperature of our fridges to within one degree, from +150C to -220C, at a touch of a button adds real value. You can preserve your produce if you don’t use it all. In addition, drawers that hold 86L of product keeps your need to restock at a minimum.
That brings us nicely onto the final question. Refrigeration space is vital in takeaway and delivery. What refrigeration equipment should operators be looking for to aid their efficiency goals?
DV: Energy usage, productivity and waste need to be considered. Equipment which aids the delivery of high quality safe food while positively impacting these three key measures is essential to deliver a successful delivery option. Low energy usage refrigeration, which maintains a steady and consistent air and product temperature, will assist in delivering higher quality, safer food and with lower waste. Equipment which can be truly fully utilised at the point of preparation will improve productivity and ensure orders are met on time and in full.
MF: You need to have large storage feeding service storage at point of cooking — one feeding the other.
KH: Refrigeration needs to be efficient, reliable and easy to access and operate, with a small footprint. If you care about food and its holding condition, then temperature stability is key as temperatures can fluctuate, especially in small areas, where the heat is more intense.
By having Adande insulated drawer systems, the cold air stays in the drawer with the food, thus keeping the food at the correct temperature ensuring a quality product every time. Oxidised meat is a direct result of not being held in a stable environment. This impacts the cooking process and the meat will yield you less product — a smaller burger, for instance. Ultimately, this impacts on taste, quality and an operator’s bottom line.