Digital F&B, Maximising Efficiency in Volatile Times
Updated: Oct 19, 2021
Restaurateurs, chains and their suppliers have seen deep disruption on an unprecedented scale that has not only severely impacted their traditional business models, but often their very existence. Owners have had to move fast to adapt their business models, with digital F&B playing a deep integral role.
Everyone needs to Eat
Delivery and takeaway models have been more eagerly explored and executed, by both owners desperate to find new revenue streams, and equally consumers who are also keen to participate for their own reasons of safety and convenience. Changing economic environments also brings new entrants.
Ghost, cloud or dark digital kitchens, that have no physical footprint, continue to spring up, bringing both threats to your business as they become new competitors, and at the same time providing incumbents with opportunities for risk mitigation to protect them from any unexpected localised covid related shutdown.
Different kitchen styles, including centralised & decentralised kitchens, have different underlying cost metrics in that they can be located in non-prime areas, avoid customer facing fit-out costs, and can additionally leverage industry wide delivery apps which contribute to replace walk-ins for driving traffic. Margins from each need to be tracked.
Enhanced F&B concepts mentioned above, combined with the leverage of digital, has given this new breed of tech savvy owner the ability to drive innovative menu design based on data. This enables a higher degree of personalisation, and all with a more compelling cost structure. Although the secret sauce of these digital kitchens relates to digital food production, many aspects of the business model can still be leveraged using your own data within your current environments.
In Process Analytics
Financial and non-financial information can be viewed at both an aggregate or individual level, so for example by operational cluster, brand, outlet, distribution type (eg 3rd party delivery), order source (eg WhatsApp, WeChat, delivery apps etc), all with an integrated audit trail, so that underlying variables can be fine-tuned for optimum results. This also includes line menu items exploded to their underlying ingredients as well as actual vs expected consumption rates.
Fear, uncertainty and doubt means that It is not uncommon to hear about some owners being cautious about additional app related distribution costs, but at the same time it is not uncommon to find on-premise and delivery menus containing price differences to compensate, so it is all about experimenting to some extent to find what works from your typically very discerning end user base, and comes back to smartly differentiating channels where appropriate.
Procurement can be localised or centralised for both direct and indirect procurement (T&E, recruitment agencies, utilities), and can also include both quantitative & qualitative metrics (delivery performance, food quality, reliability etc).
Master food order lists can be used to simplify re-ordering procedures, and ongoing visibility maintained by giving internal stakeholders controlled access for the more detailed updates, such as food availability is when, where and what will be delivered etc. This ensures that par levels are maintained as needed, with delivery times being optimised and storage costs minimised, in order to maintain ongoing quality.
Food supply and demand levels can be proactively managed across outlets to optimise supplier orders and therefore reduce costs, as well as giving full visibility on all items coming up for expiry. This area is extremely relevant, as today’s supply chain constraints will need more forward purchasing, contrasted with everyone’s ESG responsibilities to reduce food waste.
Adapting to Change
With Digital F&B, decision making is enhanced through having accurate in depth and timely information that can be used to minimise food wastage, as well as enabling detailed scenario planning that can leverage the available ingredients at hand when supply chains are not so predictable.