Food & Beverage Strategy - Future Focused Part 2

Food & Beverage Strategy - Future Focused Part 2

Building great places and creating exceptional experiences for your 'Non-Online' purchases

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In part one, I wrote about how flexibility must be the foundation from which to develop future-focused food and beverage strategies (F&B Strategy). Insights from our projects around the world confirm time and time again, flexibility is the key to future planning. Whilst the pandemic has driven substantial growth in on-line purchases; future spending on food and hospitality will ALWAYS be about the built environment and its uniqueness as a lifestyle destination. New Zealand’s post-pandemic immediate return to eating out and drinking in bars re-confirms customers still demand a unique physical restaurant or bar especially at malls that show intrinsic value as beautiful and hygienic socialising places.

In the past months, as retail centres, high streets, airports, stadia, hotels, commercial projects etc. continue to grapple with ongoing disruption brought on by the pandemic, many property developers and managers are looking to the future and the great reset when it comes to food and hospitality; so that it will continue to be a key asset category post pandemic and into the foreseeable future.

Food and hospitality will always be in-demand, people live to eat, drink and socialise, it’s a fact. As humans we yearn for social-intercourse and human connection, we’re happy to pay for food cooked by someone else and served by a stranger in a welcoming environment.

With this in mind, the outlook is extremely positive for lifestyle focused malls, dining precincts, waterfront developments, commercial buildings, hotels, neighbourhood high streets etc.

Success Factors

Tomorrow’s customers have already developed strong viewpoints on what they want from modern lifestyle eating, drinking and socialising food and hospitality destinations. Future F&B Strategy must endeavour to deliver the basics of hospitality focused precincts: Safe, secure and accommodating the requirements of social distancing, green-hospitality environments, increased outdoor alfresco dining, pick-up and delivery points and flexible environments etc. (www.jll.com.au/en/trends-and-insights/workplace/workplace-canteens-take-a-leaf-from-healthy-food-outlets)

In addition, shopping centres and mixed-use projects will focus on capturing next-generation fundamentals when it comes to the inclusion of dark kitchens, dining courtyards, piazzas, open-air cinemas and theatres, food focused health and well-being retreats, design-driven pick up lounges, elevated drive-thru booths, double and triple storied seating terraces and internal mezzanines, all aimed at maximizing seats and sales at the same time as maximising personal safety.

Developers and owners are leading the way in establishing food and hospitality precincts that will visually present as beautiful lifestyle destinations that tick all the boxes when it comes to customers’ expectations, thereby ensuring maximum patronage and optimising sales for the asset category 

As challenging as it may seem from current perspectives, the hospitality and F&B industries must prepare for a positive comeback. With the catalytic shift to online shopping and consumerism, the very nature of the industry has changed overnight (actually, in about six months!); food and hospitality, and its value in the “experience economy” has been re-enforced and property developments of the future may look to substantially different engagement models from what we have typically been used to.

For those brands, cafés, restaurants, bars and other food businesses that are able to reinvent their focus to incorporate a new set of consumer priorities, need states and aspirations, the future seems positive. Part of the success must start with each operator, centre’s dining cluster, development or mixed-use development food precinct, through the evolution of a strategic narrative to re-energise the customer engagement. For each business it will be different, there is certainly no magic formula, but emphasis must be placed on re-evaluating the unique selling points (and determining if they are still relevant).

The Road to Recovery

UK Hospitality’s recent publication “Road to Recovery” highlights a number of trends that we can expect to see as the next chapter in the C19 crisis impacts our industry as demonstrated in markets that are already ahead of Australia in their recovery. China has clearly seen a gradual return to dining out, where consumers have adopted a number of different approaches and whilst some customers have welcomed the return to “normal” many others have been more cautious in their approach to engagement with restaurants, cafés and bars.

New Zealand on the other hand has demonstrated a strong recovery. Despite a strict inbound travel embargo, the country has seen a domestic return to dining out, going out, coffee out and spending has rebounded relatively quickly. The “Back your Backyard” campaign run by the NZ Government has seen Domestic tourism fill the gap left by the hole in the international travel market. Many Kiwis who would normally travel to Australia or other “local” Pacific destinations are using it to explore New Zealand with a conscious effort to supporting local food and hospitality businesses.

The depth of the rebound is demonstrated by many businesses not remaining eligible for the NZ business subsidy now that the lockdown has lifted. In order to be eligible for the subsidy, employers need to demonstrate a loss of revenue of 40% or greater, something that many good food and hospitality operators have not been able to demonstrate.

New Zealand provides the hospitality industry here in Australia with a beacon of hope, that not only can recovery be anticipated, but that it can also return relatively quickly; Some businesses are even reporting year-on-year growth due to this domestic demand.

 

Change for Good

Revenue, for most businesses, has been the single metric that many food business operators have utilised in analysing the effect on our industry. But with the tremendous shifts that we have seen in the industry, it is a wider pool of data and analytics that we can draw upon to determine the appropriate level of change required in order to master the future of the industry.

For example, we have seen an almost ubiquitous acceptance of cashless operations across most businesses. For years, “cash-only operators” have provided the industry with a negative connotation; yet almost overnight this problem has disappeared.

And whilst hygiene has always been a fundamental element of professional food-service operations, never before have customers demanded that demonstrated standards be so obvious and impeccable.

Some of the learnings that we can take from this pandemic can be of significant value to the industry. Coupled with an inevitable purge of food and hospitality operators (for a number of reasons) provides good forward-thinking operators and developers with an optimistic future, if it can be strategically considered and executed to the highest standard.

In Summary

As the future of food across many industries resets and consolidates, it’s time to start planning for the future of hospitality in our shopping centres, mixed-use developments, airports, stadia, high streets and commercial towers. Diversification strategies must be engaged that allow developers and owners robust business models for the future. Spatial planning solutions that incorporate new approaches to flexibility and hygiene in order to ensure that the lifestyle developments of the future are resilient and adequately flexible to maximise the business outcomes whatever the geo-political situation surrounding them.

Australia is not at the end of the COVID-19 crisis, and for many countries, they may not even be mid-way through. However, it is not too soon to build a F&B Strategy that will foster broad growth in food and hospitality projects across asset categories.

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Cover Images of Westfield Newmarket INCA. Image via Westfield