With entire societies confined to the safety of their homes during the COVID-19 lockdown, the future of many food & beverage companies was put into question.
While restaurants and bars had to close their doors for in-house diners, other companies – such as catering businesses – were incapable of serving their customers due to a plummeting demand for live events.
For this reason, many companies from the food & beverage sector were forced to revisit their business strategies and needed to find new opportunities to generate income.
In the following article, we’ll discuss how 10 food & beverage companies – including Breadhead, Subway, Burger King, and Spirit of York – pivoted their business due to COVID-19.
Bread Ahead is a bakery and baking school founded in 2013, located in Borough Market, London. Not only do they sell bread, but they also offer baking products from the most respected suppliers in professional and domestic cookware. When COVID-19 struck, Matthew Jones, the founder of Breadahead fought hard to keep all of his three shops operational.
Breadahead started to offer a click-and-collect service from their bakeries located in Borough Market, Chelsea, and Wembley to enable their customers to access their products. Additionally, they offer deliveries across London.
What’s more, to stay on people’s minds at 2 pm every day, Jones started to bake live on Instagram – featuring one recipe a day from Breadahead’s range of bread and cakes. It took the bakery just five days to pick up 25,000 followers, and boost their online sales and food store collections as a result.
Even though the number of Breadhead’s employees has fallen from 100 to 20, the company was able to survive the lockdown.
Mediamatic is a plant-based restaurant, located in Amsterdam. They use seasonal ingredients to cook their dishes: herbs and flowers are picked from their own Aquaponics Garden, they also collaborate with local farmers. As part of coronavirus distancing measures, the restaurant has introduced small greenhouses in which they placed tables and chairs to allow guests to dine in safely.
The staff wear gloves and face shields, and they also serve food on long boards to limit human contact. The reservations can be made online only – they were fully booked until the end of June, which has proven that the concept of “greenhouse eating” was successful. Mediamatic calls their greenhouse model – “new safe hospitality”.
Diageo, is one of the largest producers of beers and spirits; founded in London in 1997. They are present in over 180 countries and have more than 140 production sites around the world. Diageo was hit really hard by the pandemic outbreak – their organic net sales dropped by 8.4%, with pre-tax profit falling by 51.8% to £2bn.
The company’s CEO, Ivan Menezes said that:
“We have taken decisive action through the second half of fiscal year 2020, tightly managing our costs, reducing discretionary expenditure and reallocating resources across the group.”
To help fight the pandemic the brand has given away over eight million bottles of sanitizer for medical workers. Thanks to the donation, over eight million bottles of hand sanitizers are planned to be produced. The donation will be made to eight countries: UK and Ireland, Italy, USA, Brazil, Kenya, India and Australia.
What’s more, Diageo has launched a program called Raising the Bar, aiming at helping pubs and bars resume their operations post-lockdown. They’re investing $100 million to support bars in putting hygiene measures in place, getting practical equipment, and digital support. The registrations for the program opened in June.
4. MyeongDong Topokki
MyeongDong Topokki is a fast-food restaurant founded in 2014, serving casual Korean Street food. The pandemic has pushed a lot of restaurants into temporary closure; in order to maintain decent cash flow, MyeongDong Topokki focused on serving take-away food, calling it the ‘cloud kitchen’.
Their customers could either order food and pick it up personally or have it delivered to their homes using foodpanda or GrabFood (food delivery services). All meals can be ordered online via their website.
The restaurant’s founder says that:
“Since then we are a fast-casual concept restaurant that is more likely to be focused on the delivery format, (unlike BBQ or casual dining), our delivery orders still remain strong.”
On top of focusing on growing their online food sales, the brand also introduced DIY meal kits to let customers prepare their own Korean food at home. They’re given ingredients and recipes to cook three lunches and three dinners – you even receive a free apron. A new menu is created every two weeks so that customers can try new dishes regularly.
5. Spirit of York
Spirit of York is a Toronto-based distillery that manufactures traditional, premium quality Canadian alcoholic beverages. The company is well known in Ontario, with Spirit of York Co. vodka, whisky, and gin available for purchase at local stores across the region.
When the Coronavirus pandemic started, hand sanitizer became a scarce commodity across the entire Toronto area. For this reason, the distillery decided to temporarily repurpose its facilities and resources and produce alcoholic disinfectants according to World Health Organization standards.
The hand sanitizer became available for purchase at the distillery on 19 March 2020. The company announced that all proceeds from the sale of their hand sanitizer would be:
“going to the Food Bank in order to support community members that have restricted access to food, or for those who are unable to leave their homes”.
As of fall 2020, Spirit of York has resumed their standard alcohol production operations, however, they also provide commercial, on-demand production of hand sanitizer for big quantity orders.
6. Burger King
Burger King is an international chain of hamburger fast food restaurants, with nearly 18,000 locations and over 200,000 employees worldwide.
The restaurant chain was one of the first global brands to respond to COVID-19. In early 2020, when China’s Wuhan region was struck by the virus, the company partnered up with food delivery service Ele.me and provided meals for medical staff working at 10 hospitals in the province.
As the Coronavirus spread across the globe, the Burger King Corporation took several steps to maintain financial stability and to contribute to the fight against the pandemic.
Source: Burger King
In the US, for instance, they have expanded on their serving options by adding curbside pickup and introducing contactless drive-thru and home delivery. They have also launched special COVID-19 deals. To support struggling families, the chain offers two free children’s meals with each purchase through the mobile app. As Jose Cil, President of the Burger King Corporation, explained:
“there's a tremendous impact on children, as a result of all the school closures. It's one of the hardest hit groups of Americans, because they rely so significantly on school, for lunch... Monday through Friday, for the better part of the year.”
Meanwhile, in France, the chain decided to connect with consumers confined to their homes and published a make-at-home Whopper recipe on Twitter. They called it “Le Whopper De La Quarantaine”.
In June 2020, Burger King Corporation announced that its sales have returned to pre-COVID-19 levels – just 100 days since the pandemic turned “business in their home markets upside down”.
7. Crafty Delivers
Crafty Delivers is a Chicago-based workplace food & beverage provider. Prior to the pandemic, the company specialized in catering events and kitchen supplies for B2B customers.
With the COVID-19 lockdown, Crafty Delivers have created a COVID-19 guide to help businesses navigate in the new reality and understand how they can remotely organize cyclical events such as team lunches or training sessions.
Secondly, they have launched an entirely new DTC service called “Crafty in a box”, which lets customers put together customized goodie boxes.
Source: Crafty Delivers' website
The service allows businesses to send over sweets, healthy snacks, and drinks to dispersed, remote teams. As of fall 2020, Crafty Delivers have also extended this offer to B2C customers – clients can now purchase single quantity boxes for personal use.
Subway is an American restaurant franchise with over 41,000 locations in 100 countries (as of October 2019). The company is most well known for its flag submarine sandwiches and salads.
When COVID-19 pushed most of the world into the lockdown mode, the company decided on a multifaceted strategy.
Firstly, like many other D2C businesses, they introduced safe purchase and delivery methods such as curbside pickup. The company has also decided to donate 15 million meals to Hunger Relief Organization Feeding America®.
Furthermore, Subway has also reached out to its franchisees in an effort to expand their business operations and offer an entirely new service: grocery shopping. Subway Groceries allows customers to purchase essential items, contact-free, from over 1,500 restaurants in the United States. Orders also qualify for free delivery within a 5-mile radius of participating restaurants.
In an announcement issued in June 2020, Subway confirmed that it would continue offering contact-free delivery and grocery services. Both services have been renewed for at least Q4 2020.
9. Forte Tapas
Forte Tapas is a popular Las Vegas restaurant, advertised on Google as a “casual, cozy eatery with Spanish small plates, Eastern European comfort food & flavor-infused vodka”.
When the pandemic started, the popular venue lost most of its income from in-house diners due to strict lockdown procedures. While the restaurant offered pickup and home delivery, it wasn’t enough to maintain financial stability.
In order to keep the business running, Forte Tapas Head Chef & Owner, Nina Manchev, decided to launch a series of weekly online cooking classes. The series, called “Cooking w/ Nina!”, priced between $30–$50 each, quickly became popular among Forte Tapas fans. In an interview for KTNV, Manchev shared that while the first, March class sold 8 tickets only, her late-April sessions already had 129 participants.
Source: Bar Forte website
As of Summer 2020, the restaurant had already reopened for dine-in reservations. The online cooking classes continue, with participants now being able to purchase kits that include all ingredients needed for the weekly Sunday cooking sessions.
10. Papa John’s
Papa John’s is an American pizza restaurant currently present in 47 countries and territories across the globe. Over the past three years alone, it has expanded to an additional 12 countries. Like numerous other food brands, Papa John’s has addressed concern about food safety and sanitation amid the COVID-19 pandemic.
The restaurant has implemented convenient ordering options like Facebook Instant Ordering. This allows customers to access an inexpensive food option, with trips to the grocery store limited at this time.
Additionally, health and safety measures for Papa John’s have been increased. They now offer No Contact Delivery to quell the fear of transmission during delivery between customers and Papa John’s personnel.
Papa John’s has also extended their health plan to include free virtual doctor’s visits so that their staff can get the support that they need.
Food & beverage companies during COVID-19 and beyond
The introduction of social distancing has kept consumers apart and seriously strained many food & beverage companies. Certain businesses, like Burger King and Crafty Delivers, could quickly adjust to lockdown procedures and continue their operations by introducing new delivery methods, such as click & collect and contactless home delivery.
Meanwhile, others – including restaurants and bars – had to go a step further and redefine the way they generate income, for instance, by offering online events or cooking classes.
As the world gets adjusted to the new reality, many businesses have now resumed operations, with strict health & safety guidelines and reduced capacity. However, given the innovativeness and creativity of the food & beverage industry, we can anticipate that it will survive through these disruptive times.