OVERCOMING F&B BURNOUT AND FINANCIAL BLEEDING

Cristobal De Nadai, Chief Commercial Officer and Founder of Watermelon Market (a food tech start-up eProcurement platform catering to restaurants and suppliers) discusses significant ways to ensure financial sustainability

F&B is one of the most exciting industries, with dynamic developments and new trends always around the corner. The constant influx of innovations in food processing, delivery, cooking methods, culinary tastes and other aspects aim to serve the best quality food to customers at the most appropriate price. But despite the variety of wonderful experiences that F&B can deliver, it can also be one of the most costintensive industries if not managed effectively. F&B providers face continuous challenges of dealing with volatile commodity prices, building reliable supplier relationships, and overseeing daily operations, amongst other issues. Therefore, staying lean and agile is key to avoiding burnout.

So, how can the F&B industry minimize wastage and control costs while keeping customers happy? Here are a few key takeaways:

Removing friction for customers

Whether it be advanced cooking equipment to quicken preparation times, digital discount codes, or placing online orders in a few clicks through your smartphone, reducing friction for customers to access F&B brands and their services are likely to lower long run customer acquisition costs in terms of money, time and effort. Customers don’t have to visit outlets to discover what each offers physically; they can rely on online reviews, menus, and F&B brands can easily market themselves to target audiences via social media. Aspects like these have been aided by technology and were pivotal in the survival of many brands during the COVID-19 pandemic.

Digital Solutions

It’s no surprise that digitization has taken over the F&B industry. Investing in technology has made F&B experiences more predictable and efficient not only for the

customer-facing side but also in managing the behind-the-scenes process. Various digital solutions have simplified interactions with suppliers and aided decision-making. For example, all-in-one e-procurement solutions assist restaurants with sourcing appropriate suppliers, tracking orders, managing POS (Point of Sale) systems and offering insightful analysis on a unified platform which can recognize opportunities for restocking inventory, forecasting, invoicing and more. This helps streamline interactions, identify spending patterns and improve overall workflow and transparency, ultimately reducing the likelihood of costly errors occurring, if each process was undertaken using various platforms. For suppliers, this enhances their control and visibility over their inventory, orders and payments - a win-win situation.

Optimizing Inventory Control

Inventory management is essential for tracking the money invested in food to avoid overordering and preventing wastage. Additionally, adopting inventory methods such as FIFO (First in, first out) helps to consume older resources first to reduce the chances of stock perishing. Utilizing automated inventory management systems can autonomously optimize stock reorders. They can also help identify popular dishes and the appropriate stock required for them when integrated with a POS system.

Consequently, freeing up time for chefs and managers to focus more on improving the quality of cooking and customer experiences.

Fostering good relationships with suppliers and ensuring timely deliveries can support in securing the highest quality products at the best prices. Additionally, having backup suppliers can reduce the risk of the sudden unavailability of stocks from primary suppliers. Moreover, F&B brands can get creative with left-over stock to create new menu items and build additional revenue sources.

Retaining Good Talent

People are the greatest asset of any business. If they are treated right, they are more likely to build loyalty to a company and contribute their best ideas. In the F&B industry, employee turnover rates tend to be high due to the lack of growth opportunities, pressured working environments and competitive compensation, amongst other factors. This is a critical aspect as the cost of hiring is usually higher than retaining an employee since the recruitment process involves additional costs in hiring, onboarding and training, not to mention the disruption to daily activities until the new hire is ready to take over the empty role. Therefore, F&B brands must ensure ample opportunities for career growth within the firm and work cultures that reduce worker alienation and recognize good performance. Loyal employees promote the company as an employer of choice and perform well. They are also more likely to impact customers positively and more willing to nurture new talent with their experience, reducing training costs.

Once these cost control measures are taken, F&B brands can expect to prevent unnecessary financial leakages. However, they must be aligned with supporting elements as well. For example, investing in a digital infrastructure doesn’t make sense if no one is trained sufficiently to utilize it effectively or if it is likely to become obsolete in a short time frame. Likewise, companies must first hire good and flexible talent to retain them; therefore, appropriate incentives must be in place to attract high-performing staff. Furthermore, inventory management must account for risks in every step of the value chain, for example, late deliveries by suppliers, mistakes in order preparation and uneven dish portion control, to name a few. Therefore, cost controls must be viewed more holistically and be sustainable to have a lasting impact.

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