3 restaurateurs on COVID’s impact and the future of the food industry
One of the hardest-hit industries during this crisis is the restaurant business, where dining out that most social and convivial of activities for the food-obsessed Pinoy has now been nullified by social distancing.
What is the “new normal” going to look like food-wise? We interviewed three restaurateurs to find out:
Maritel Nievera
Maritel Nievera introduced Pampanga cuisine to Metro Manila diners via Cabalen, which she opened in 1986 on West Avenue, Quezon City, as an eat-all-you-can buffet restaurant now famous for its kare-kare, dinuguan, beringhe, and prichun.
“Cabalen started it all for me,” she says. “It was so successful, I expanded to Metro Manila malls and later to more malls all over the Philippines.”
Her other homegrown concepts include Mangan, featuring popular Kapampangan dishes; Soi, offering authentic Thai food; BKK Express and Eats Pinoy, outlets serving Thai and Filipino fast food, respectively.
Nievera has also brought in foreign concepts from Japan: Sukiya Shabu Shabu and Tsurumaru Udon House, for a total of 65 restaurants, fastfood outlets and franchised outlets spanning her 35 years in the food industry.
How did you prepare for/face COVID-19? What were your biggest challenges? How did you cope?
I was in the US when the lockdown was declared; fortunately I have a very capable executive committee that was ready to act and adapt to the fluidity of the situation. Nobody was really prepared for COVID-19. The notion of a pandemic is something new to most of us. It’s something that we only read about in history books.
We immediately pared down to a skeletal force, just enough personnel to wind down the business, e.g. taking care of inventory, securing the outlets and its funds. A lot of the perishable food per store was given to employees and donated to frontliners. We tried to save the most we could.
The biggest challenge, first, is how to take care of our people, most of whom are minimum wage earners, and secondly, our profound loss in revenue, which forced us to shut down almost the entire company. Without the usual cash flow from daily restaurant sales, we needed to tap into all our available funds to meet payroll and give something extra during lockdown.
Lockdown is a very big financial burden for the company! To cope, we’ve created our next steps and action plan geared towards ensuring we survive. I never thought that everything I built in the last 35 years — with blood, sweat and tears — could possibly crumble because of COVID-19.
What did you do to help frontliners? Your own employees? How many people depend on you for their livelihood?
We have about 1,300 employees in Cabalen. About 85 percent are deployed to our various restaurant concepts, all of which are in the malls. So, we are really hard-hit by the mall closure. Despite the difficult cash position of our company, we will give our employees their proportionate 13th-month pay in advance, convert available leave credits to cash and some grocery food items we have in our warehouse. What I am worried about is our employees who will eventually lose their jobs. This always makes me cry!
For the frontliners, we tied up with generous patrons like Rep. Loren Legarda and many other prominent personalities, who sponsored meals for the frontlines. Cabalen is committed to prepare affordable, nutritious meals that we regularly supply to the hospital frontlines nominated by their benefactors. There is practically no profit from this; at best we break even. But the thought of helping the country is good enough to keep us going.
What is your forecast for the food industry? What are your suggestions?
Even if a vaccine is invented very soon, it will take years for the restaurant industry to recover, especially those located in malls that rely on high foot traffic to be viable. I hope the government will help us in financing our operations back to life. Most small- and medium-sized restaurants or chains need to start all over again, since even their working capital has been wiped out.
The malls should also realize that we need to help each other. Our seating capacity is reduced to about one-third of the original, given the need for social distancing. We need reasonable rental rates to help us recover and gain our strength back.
How will COVID change the future of the resto industry?
Restaurant food and service should now be conceptualized with the “new normal” in mind, where we need to pivot to suit the changes in consumer behavior. People will refrain from going into crowded places, always conscious of the minimum social distance for safety/health.
Wearing facemasks or gloves will now be common practice. Open kitchens will be preferred, since people will want to see how the food was prepared. It will usher in a new generation of “health-conscious customers.”
We may also see a large increase in delivery business, as customers will be less likely to go out, even when this ECQ is lifted. Some restaurants may have to reduce their capacity indefinitely, severely affecting their profit margins and forcing them to change their business models.
Eric Dee
Eric Dee is the COO of Foodee Global Concepts, which holds the most number of Michelin-starred restaurants in the country, with brands like Tim Ho Wan (Michelin-star dim sum from Hong Kong) Kam’s Roast (Michelin-star roasting from Hong Kong) Hawker Chan (Michelin-star soy chicken from Singapore) FOO’D by Davide Oldani (Michelin-star Italian from Milan) and Tsuta Ramen (Michelin-star ramen from Tokyo).
“Before venturing into the Michelin-star brands we started by creating homegrown brands like Mesa Filipino Moderne, which currently has about 65 stores and counting to our goal of 100 stores in 2020,” says Dee. “We also operate a few partnerships with very well-known retail brands through Sunnies Cafe and Bench Cafe. In the dessert segment we have Llao Llao frozen yogurt, which is Spain’s number-one yogurt.”
In total Foodee Global has about 200 stores across its network of over 15 brands, directly employing around 4,000 workers.
How did you prepare for/face COVID-19? What were your biggest challenges? How did you cope?
No one was prepared for COVID and because of that, everyone was caught off guard, we were rolling with the punches. I personally cancelled a flight to Istanbul the night before my flight when countries were closing borders. These are unprecedented times and we had to take unprecedented measures.
What did you do to help frontliners and your own employees?
Our priority was our team: we were one of the first ones to call closure for all our brands and restaurants. We had to make sure our teams were going home safe and able to get through this. We quickly decided (even prior to all government announcements of subsidies) to release the 13th-month pay prorated, as well as release a P5,000 allowance and loan programs for our teams. Upon announcement of the subsidies, we were able to process all our team’s paperwork to be submitted and are now awaiting approval from government agencies. We made sure to start to help within before helping others.
We decided to help frontliners the way we know how, through food. Our FEED (Foundation of Enrico and Elizabeth Dee) program coordinated with our brands to execute a food donation drive to several hospitals, army bases, checkpoints and barangays, in coordination with local mayors and congressmen. In total we have donated about 20,000 meals across all our brands to date and are looking to continue to FEED the people as the need arises.
What is your forecast for the food industry?
The restaurant industry will experience a paradigm shift, which will eliminate the weak and the strong will barely get through, but as they say, there is light at the end of the tunnel. We are entering a new norm. Restaurants are not just about food but the combination of food, service, attention to detail and ambiance. Now restaurants have to rely on takeout and delivery. How does one convert a dining experience into a microwavable container that arrives one hour after you order it and still expect it to be good?
Restaurants now have to be creative to not lose the brand during the process of its takeout and deliveries, and to each his own on the execution. We will see real creativity in this space and the true entrepreneurs will survive this crisis because they were agile enough to think of ways to make the takeout and delivery service the best it can be.
Social distancing will be a “new norm” and if we reference our restaurant partners abroad, like Singapore and Hong Kong, they have already executed a 1.2 to 1.5-meter distancing per customer, so the capacity of your restaurant reduces significantly and yet you are paying full rental on those areas. It’s really tough until a vaccine is developed, which looks like 18 to 24 months. All these new SOP and safety protocols have to be in place and we will focus on safety because any mishap is a health issue, not only for our customers but also our team.
Are you currently offering food deliveries or takeout?
We opened Tim Ho Wan and Hawker Chan recently for pickup and soon, delivery. This week we will open Mesa with its own delivery service as our pilot store and will slowly and safely open a few more as we progress.
We’ve implemented our new safety protocols and are slowly improving them to be able to use for our other brands. We have secured rapid test kits for internal use to make sure that the working environment will be safe when employees return.
This crisis has pushed our digitalization timeline early, but the good thing is that we were already heading in that direction anyway, but now we are doing it at a much accelerated pace.
Florabel Co Yatco
Chef Florabel Co Yatco is the memorable name behind her eponymous Florabel Group of Restaurants, comprised of her biggest chain, Crisostomo, a Filipino heritage restaurant with 13 branches; Corazon, El Corazon (same DNA, slightly different name); Mr. Frank’s Hotdogs and Nachos, Sisa’s Secret, Market at 5th at St. Luke’s BGC, Caféteria at Asian Hopital in the South, Felix (which will be replaced with a new concept) and, of course, Florabel, her flagship restaurant and catering business.
“My specialty is just really good food,” Florabel says. “I started and still continue to do continental cuisine, which is my bread and butter, but at the end of the day, there’s nothing more satisfying than delicious comfort food, which Crisostomo, Corazon and El Corazon offer.”
How did you prepare for/face Covid-19?
I don’t think anyone was truly prepared for the magnitude of this pandemic. We implemented extra sanitation methods and schedules in our restaurants when COVID-19 was starting to have an impact. But being non-operational? That was a challenge I wasn’t at all prepared for.
Right now, the safety of our staff and customers are of utmost importance, which is why we’ve decided to temporarily suspend operations until the ECQ is lifted. Right now, I just work with a very lean core team in making my artisanal deli line available, as well as the freshly baked bread I’ve been overseeing production of outside the city, which people can order in limited quantities at a time.
What did you do to help frontliners and your own employees?
Before the heightened ECQ, we were able to offer meals to various frontliners. We tried to donate as much as we could with the resources we had. Because truly, if our health workers aren’t in tiptop shape, especially when it comes to sustenance, it might deter them from being at their best.
As for my over 700 employees, I try to give them as much personal assistance as needed, since most of them are the breadwinners of their family.
What is your forecast for the food industry?
It’s hard to say what’s going to happen in the food industry, or any industry at the moment. We can’t really act like everything is normal, because it really isn’t. In as much as we can, we’re focusing on helping our health workers right now while giving people the opportunity to still enjoy our food in the safety of their homes. The restaurant business is all about the dining experience as much as the quality and taste of the food, so we’re trying to get by.
It’s great that we have delivery and logistics options in the city to bring food for people to eat, order and patronize, so that might be the key to making this work for the time being. Of course, our hope will always be for things to return to the way it was. But we understand the need to stay put right now because that’s really the best solution when it comes to prevent the spread of this virus.
How will COVID change the future of the resto industry?
It’s already changed the industry. More restaurants are making their items available to more people, not only giving the public what they want but also as a salute to their employees. The restaurant industry is as much about people as it is about food. We need to support one another, which is happening. Making food available is the best we can do right now. Even home kitchens are sprouting up — people are more aware of what’s there and what they can get.
What are your activities now in quarantine?
If I’m not working with my skeletal core team on our bread, deli and frozen items, I am cooking up a storm for my family at home. The one great thing about this is that I get to spend more time with my husband and children. In between, I try to figure out other ways to assist our frontliners in getting what they need.
What do you miss the most about what we used to call “normal”?
I definitely miss interacting with my team and clients on a daily basis. While we correspond online, nothing beats seeing someone, or experiencing something in person! While I’ve been enjoying every minute of being at home with my family, I also miss the other human interactions I have and create almost every day.
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