There is no denying that the Covid-19 pandemic has spurred a massive shift towards at-home eating and food delivery across the country, which has heavily impacted the hospitality and F&B industries.
Fine-dining restaurants have shown innovation, moving towards offering their menus as delivery options to survive. While it’s been a tough year on the hospitality industry in general, it’s also been an extremely exciting one as I’ve watched, and been a major player in, the development of delivery-only brands, which have been created to service this new market.
The rise of ‘dark kitchens’ are completely transforming the F&B industry here as they have started popping up throughout the UAE. These dark kitchens are essentially where brands are shunning expensive ‘bricks and mortar’ restaurants and are instead investing in delivery-only kitchens where multi-brands are mass-operating out of the same kitchen space.
For example, along a half-a-kilometre radius of Hessa Street, 250 different restaurants are operating out of various dark kitchens, which is absolutely mind-blowing. When Covid-19 hit the UAE, in order to survive and keep our employees employed, we as a business had to adapt by looking at the market to see if there were any gaps that we could fill.
Eating-on-the-go, as well as the “Netflix on the couch”, culture meant that people wanted to eat good food on the couch, not always a greasy burger or pizza. They wanted healthier options at their fingertips.
The way that people’s habits are rapidly evolving suggests that people’s expectations have grown extensively and the demand for healthier delivery options is here to stay.
It’s not been all roses though. One of the biggest challenges, beyond revenue loss, is the exceptionally high charges that we have to pay to external delivery companies. We have also seen customers move towards being more budget-savvy which has seen a major discount culture develop in the UAE and this has of course, increased competition between outlets that are already struggling with having to cut costs.
In the F&B industry, it can be difficult to lower your costs. But the best advice I’ve learnt over the years is: Get the best at the best price. Never negotiate down on quality when you’re in the food industry. If the quality is below par, you’ll lose your customers and they won’t come back.
Loyal customers are worth more to a company than trying to get five new people to order from you every day. All industries in the UAE are struggling right now, which means that even suppliers will be willing to negotiate to an extent that they may not have been before. So, take advantage of this.
The rise of ‘dark kitchens’ are completely transforming the F&B industry
As the SME industry has grown over the years, we’ve definitely seen a decline in the traditional company hierarchy where hiring is based on just one skill. In general, industries need back of house and managerial staff to be able to wear more than one hat and for them to be able to dip in and out of various departments within the company.
Employees can have their ‘core skill’ hat, but they need to be willing and able to help the company grow on multiple levels to operate more efficiently in these changing times.
This change has affected almost all industries, but particularly SMEs that don’t have the budget to fill various conventional roles. In our company, we have a ‘skin in the game’ approach, where the company’s key leaders operate on profit-share contracts.
Not only will this prepare our employees with the necessary skills to be able to operate a business like this themselves in the future, but also ensures that our key leaders who have this equity incentive are making every decision in the best interest of our business, including being willing to fill more than one role to keep employment costs down and so far, it’s working for us.
This period is constantly evolving and slightly tumultuous, but the future is bright for F&B and hospitality in the Gulf, and there’s a real opportunity for new blood to come in and share the fresh new ideas that will ultimately help to shape the industry.
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by Staff Writer
More of this topic
The rise of dark kitchens in the UAE amid coronavirus
The pandemic has shifted how people eat, and the F&B industry has responded with a greater focus on delivery options
James Kilcullen, founder of Open Pot Hospitality
There is no denying that the Covid-19 pandemic has spurred a massive shift towards at-home eating and food delivery across the country, which has heavily impacted the hospitality and F&B industries.
Fine-dining restaurants have shown innovation, moving towards offering their menus as delivery options to survive. While it’s been a tough year on the hospitality industry in general, it’s also been an extremely exciting one as I’ve watched, and been a major player in, the development of delivery-only brands, which have been created to service this new market.
The rise of ‘dark kitchens’ are completely transforming the F&B industry here as they have started popping up throughout the UAE. These dark kitchens are essentially where brands are shunning expensive ‘bricks and mortar’ restaurants and are instead investing in delivery-only kitchens where multi-brands are mass-operating out of the same kitchen space.
For example, along a half-a-kilometre radius of Hessa Street, 250 different restaurants are operating out of various dark kitchens, which is absolutely mind-blowing. When Covid-19 hit the UAE, in order to survive and keep our employees employed, we as a business had to adapt by looking at the market to see if there were any gaps that we could fill.
Eating-on-the-go, as well as the “Netflix on the couch”, culture meant that people wanted to eat good food on the couch, not always a greasy burger or pizza. They wanted healthier options at their fingertips.
The way that people’s habits are rapidly evolving suggests that people’s expectations have grown extensively and the demand for healthier delivery options is here to stay.
It’s not been all roses though. One of the biggest challenges, beyond revenue loss, is the exceptionally high charges that we have to pay to external delivery companies. We have also seen customers move towards being more budget-savvy which has seen a major discount culture develop in the UAE and this has of course, increased competition between outlets that are already struggling with having to cut costs.
In the F&B industry, it can be difficult to lower your costs. But the best advice I’ve learnt over the years is: Get the best at the best price. Never negotiate down on quality when you’re in the food industry. If the quality is below par, you’ll lose your customers and they won’t come back.
Loyal customers are worth more to a company than trying to get five new people to order from you every day. All industries in the UAE are struggling right now, which means that even suppliers will be willing to negotiate to an extent that they may not have been before. So, take advantage of this.
As the SME industry has grown over the years, we’ve definitely seen a decline in the traditional company hierarchy where hiring is based on just one skill. In general, industries need back of house and managerial staff to be able to wear more than one hat and for them to be able to dip in and out of various departments within the company.
Employees can have their ‘core skill’ hat, but they need to be willing and able to help the company grow on multiple levels to operate more efficiently in these changing times.
This change has affected almost all industries, but particularly SMEs that don’t have the budget to fill various conventional roles. In our company, we have a ‘skin in the game’ approach, where the company’s key leaders operate on profit-share contracts.
Not only will this prepare our employees with the necessary skills to be able to operate a business like this themselves in the future, but also ensures that our key leaders who have this equity incentive are making every decision in the best interest of our business, including being willing to fill more than one role to keep employment costs down and so far, it’s working for us.
This period is constantly evolving and slightly tumultuous, but the future is bright for F&B and hospitality in the Gulf, and there’s a real opportunity for new blood to come in and share the fresh new ideas that will ultimately help to shape the industry.
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