Food for Thought

The pandemic, which resulted in lockdown has had an ominous effect on the food & beverage industry. The subsequent unlock, which has started in a phased manner, has not eased the problems of the restaurant industry due to the SOPs that have to be followed by the restaurateurs. Getting the people, whose psyche, due to corona virus scare, refrains them from dining-out, back to the restaurants is only the tip of the iceberg. Reducing the seating capacity due to the social distancing enigma and maintenance of hygiene are some of the other major problems. According to a 2019 report of National Restaurant Association of India (NRAI) the restaurant industry employs around 7.3 million people in the country. An adverse impact of the pandemic on this industry would have an effect on the country’s economy. Ashok Malkani discusses on how the industry plans to tackle these problems and how long it will take for the industry to regain the pre-COVID status.

- Ashok Malkani

The organized Indian F&B industry was the largest single employer in the country with a workforce of over 7.3 million. The nationwide lockdown sent this industry in a downward spiral and there a possibility that nearly a quarter of the restaurants may stay shut permanently. India’s $50 billion restaurant industry is, according to the National Restaurant Association of India (NRAI), likely to lose $9 billion in 2020. Though the lockdown has eased off the industry has still not recovered from the effects of the pandemic. It is still facing several problems.

Gurbaxish Singh Kohli, Vice President, Federation of Hotel & Restaurant Associations of India (FHRAI) speaking about the effect of a pandemic on the industry says, “F&B businesses are finding it increasingly difficult to sustain and the consumer confidence has not yet returned. There is roughly eight months of a hit in terms of depleting revenues, piling debts, the exodus of labor, overheads including maintenance, utility bills, taxes, statutory fees, and salaries, among other expenses. Today, the industry has opened but it is still operating at approximately half its potential owing to multiple issues. Today, consumers are not entirely sure about eating out is safe. Additionally, hotel and restaurant establishments are required to operate in restricted capacities and have to take double precautions with safety and hygiene measures. The staff has yet to return and businesses need working capital which, unfortunately, the Hospitality industry does not have access to.