The road ahead for food and beverage retailers

Hosted by Suzette Lamont, guest Suzee Brain
Monday 18 May 2020

SL:
COVID-19 has been a game changer for food beverage retailers around the world. They've had to change their regular business model almost overnight to think of new ways of serving people in their homes in order to bolster operations. But what impact has this had on businesses? 

Hello and welcome to Talking Property with CBRE. A podcast that provides information and insights, to owners and occupiers of property all around the world. My name is Suzette Lamont, Regional Director of Client Solutions here in Australia and New Zealand and I'm your host for today's episode. 

Over the next little bit, we’ll be directly referencing how food affects the workplace experience on what you can do to get your work force fed in these hungry times. Today, I'm joined by Suzee Brain, Founder and Principal of Brain and Poulter. Thank you for joining me, Suzee where do I find you today? 

SB:
Suzette, thanks for having me on the show. Today, I'm broadcasting from the little tiny Hamlet of Burrawang in the Southern Highlands of New South Wales. It’s a cold, crisp autumn day here and regretfully still, my local cafe is not open for me to be able to go and get a coffee. 

SL:
Well, I hope you've had some sense of caffeine in those veins this morning Suzee. Now Suzee, you are absolutely one of Australia, Pacific's food gurus. You advise landlords, you advise food and beverage retailers, and you've worked with leading deliveries of these all around the world. Gosh, A lot has changed in office over the last few months, especially with the closing of many of our lobby cafes. Can you tell me a little bit about what has had to change in the selling of food during COVID and what do you think will remain? 

SB:
Yeah good question certainly, as we start to think about re-entering into our CBD’s again, what is that going to look like? For us it's around a framework off what we call the ‘P.P.E of F and B’. So what's going to change is P for protection, food and beverage is such a high touch point experience and now that customers are going to be coming back, the workforce is going to be coming back hyper-vigilant about all those touch points, where we used blithely dip our teaspoons into the sugar pots and stir that into our coffee, we're going to be really freaking out about whether that's going to send us back home into isolation for another 14 days. So, a lot of changes to be made by food and beverage operators in removing as many touch points as possible, taking anything that we shared, be it an eftpos system, be it a menu, be it salt and pepper shakers. All those sorts of things will need to now be removed and alternative ways of limiting the contact in undertaking those things.

SL:
I understand that they've had to really pull in their income from a whole lot of different ways as well Suzee, what are you seeing there?

SB:
Yes Suze, that's been a major thing particularly now as restrictions are being lifted, but with impositions of reduced customer numbers being allowed to be served. Relying on getting your turnover back to where it used to be by just having tenants relying on dine in it isn't going to cut the mustard effectively. 

We've cut all seating areas down to quarter of what they used to be, we don't want tenants to come back, only making a quarter of what they used to in sales.  So, our strategy and recommendations to landlords is to be looking to encourage the tenants to look to what we call ‘Seven Streams of Income’. Seven different ways of running their businesses from dine in to take away, to delivery to meal kits to locally and homemade sourced products from events and live streaming, all sorts of different avenues to bolster where their incomes going to come from in the future. 

SL:
Wow, that's a lot for a retailer to think about. 

SB:
It’s a big pivot. 

SL:
Thinking about my little local coffee shop. The mum and dad that serve the coffee, bake the bread, and now there's this huge expectation of them to also be creating online experiences.  

If you're a landlord, what kind of advice would you give them at the moment for sort of resetting their retailers’ expectations around this?

SB:
Most importantly, it's not to get overwhelmed in all of this and not make it too complicated. So, we've created a booklet that's got, like, the best practice examples we've been able to collect from all around the countryside, where we're seeing some incredible, simple, quick to implement ideas and that's the key. If you spend too long trying to get this perfect, you're going to miss the boat. It's about reacting very quickly. How can you create very quick posts, very quick communication, simply ringing ahead and ordering rather than even having to worry about a detailed web-based system is the way to get action and connect quickly with the customers in the here and now.

SL:
So, going back to our little lobby cafes you know, feeding at some points in time up to four or 5000 people in one building, they've mostly been put into mothball over the last few months. What would be their number one priority in reopening and communicating to their community that things are going to be okay and they can get that morning coffee that we all need?

SB:
The number one thing is to manage your productivity. So, the tenants have to find ways to get customers to be able to order quickly and collect their orders, quickly, with a little contact as possible. So whether that can be at every moment through the building, working with the landlord on how that's communicated, creating different pickup and collection zones around a building, to limit the number of people having to go up and down in lifts to get their coffees, to some degree and my autumn walk this morning in my lovely little village of Burrawang, I was thinking about the old trolley ladies who actually used to be push around the corridors of News Limited and places where I worked growing up. There is a time and a place to start thinking about some of those types of products and services coming back into commercial office buildings.

SL:
It sounds like everything old is new again.

SB:
Funny about that.

SL:
So, Suzee, I also live in New South Wales, where you do, and I'm really excited restrictions of finally being eased a little bit. What is that going to mean for our retailers in terms of their productivity as well as the overall customer experience?

SB:
So, we come back again here Suze to P.P.E. It's going to be so important to;
P - Make sure you're protecting your customers, protecting your staff and communicating that very well.
P - for profit and productivity. So, got to be looking at ways of getting customer spends up as high as possible. So maybe the introduction of fixed menus, where we're getting a drink and a meal in a certain time period so that you're turning over those tables of 10 as quickly, as possible and;
E - Standing for engagement. Communicating what your offer is, your availability and the ways for customers to get in and out with you as quickly and frictionlessly as possible – P.P.E. 

SL:
Yeah, that's really sensible. I suppose, for some of those really large spaces, like the bars and hotels that hold thousands of people. Will they actually be reopening with only 10 people allowed in each space?

SB:
Yes, it's definitely going to be a challenge for those - again, it comes to productivity. We allow about 1.3 square metres of space per person for fine dining, about one square metre per person for fast food outlets and in pubs and clubs that can be low as 0.7, 0.8 square metres of space per person so anywhere where people are crammed in it's going to be very difficult for them to come back productively in a dine in situation, but they can still be busy with their takeaway and working on connecting with their communities. You know, we've seen pubs reinvent themselves as takeaway outlets, busting holes in their walls to have takeaway counters serving directly out onto the street and the outdoor areas and these are all opportunities to stay connected to the community and keep customer loyalty. 

SL:
In a lot of ways then, it's a pretty exciting place we're in at the moment. I mean, outside of the terrible pandemic and no one wished that upon anyone in society, but we have actually seen some true innovation over the last couple of months. So, we expect to see it in the future, Suzee?

SB:
Innovation has been my favourite thing that has come out off this pandemic, particularly for the food service sector that had relied so heavily on very human, staff heavy basis and food and beverage operators are very kind and tolerant to all the office workers who used to sit over one coffee for one hour in their places of business. Now we're going to see some really strategic thinking about how to give customers a fantastic experience, but that's also profitable for the tenant and helps pay the rent.

SL:
So new normal, what might it look like as we move forward after COVID?

SB:
New normal is going to be awhile off. We call, there's a semi normal phase first, which is what we're about to enter into, where things are still going to be a bit tricky. It's going to be very strategic, who survives and who thrives, through this semi normal period. 

By the time we get to new normal a lot more automation cash - probably dead in the food service sector by that stage. Contactless ordering, which means a change to the way dining rooms were staffed, most likely to be used by those more progressive operators and into the back kitchens where safety again and hygiene under scrutiny, certainly some automation coming through in that, too. So, think of robots making burgers at lunchtime, you could probably order it without even having to talk to any human beings in that process.

SL:
Yeah, I guess, though what we're all really craving is to get back out into the world and be able to connect with humans and share a meal, something that we all adore doing and one of the things I'm looking forward to doing is starting to really eat healthily. I think for a lot of us, COVID has seen a few kilos pile on. Is this something that is not just happening in my world, but perhaps a little bit wider?

SB:
The home baking craze has been almost impossible for the supermarkets to keep up with. Interestingly, for Asia as they’re reopening, a huge spike in an interest in health orientated foods and a real desire to make a cultural shift into how they attend to that. Australia, New Zealand, we already have quite good health offers in our takeaway and dine in sectors. 

So, some of the indication so far are that in fact, were busting to go out for an indulgence that hasn't been required to be made by our own hands, so the jury’s out there Suzette as to which way we will see that land.