Analysis: From family owned to fine dining, F&B players balance delivery with dining-in

The Circuit Breaker period is gradually being lifted in Singapore, and the government has said that restaurants could possibly be allowed to resume dine-in operations before the end of June, should the number of infections in Singapore remain low. Given that a majority of physical outlets had to be shut from April in Singapore, many F&B businesses have had to pivot their strategies embracing delivery platforms and eCommerce to make ends meet.

While many have turned to platforms such as GrabFood, foodpanda, and Deliveroo, commission fees on these platforms which can range between 25 to 32% for each order, has led to many launching their own delivery services instead.

Stylish Italian fine dining restaurant Garibaldi is one such restaurant, which built a new website during this difficult period to focus primarily on its delivery and takeaway businesses. Speaking to Marketing, Walter Visioli, general manager, sales and marketing at Garibaldi, said its aim was to create an easy and direct website for both the restaurant and its customers to navigate and to deal directly with its customers. He added that with the website being a direct channel between the restaurant and its consumers, it enabled a more intimate contact with its customers, and allowed it to listen to their requests and feedback more closely.

Besides having its own delivery service, the restaurant also invested in new channels such as Facebook ads, Instagram ads and worked on content marketing campaigns to boost its online visibility. Garibaldi also hired a design company to create branded labels for its packaging, in efforts to create yet another element of communication and also to deliver the experience with a personal touch.

Meanwhile on the other end of the spectrum, catering to the masses with a penchant for Indian vegetarian cuisine, is Indian vegetarian restaurant Madras New Woodlands Restaurant which also launched its digital journey during this period. Situated at Upper Dickson Road first starting up in 1983, the daughter of the family-owned restaurant, Ashtlaxmi Dinakaran, said although the restaurant has been around for over 30 years, it has never felt the need for a digital presence. But all this changed when circuit breaker measures were imposed in April 2020.

Since then, Madras launched its own website offering islandwide delivery and takeaway services, as well as its Facebook and Instagram pages. To further boost its digital visibility, the restaurant also joined various Facebook groups to promote its delivery services.

Additionally, the restaurant launched a DIY (do-it-yourself) dosa kit which consumers can purchase and make their own dosa with their families. To further engage with its consumers digitally, Madras also held a social contest on its Facebook page which encouraged consumers who purchased the DIY dosa kits to submit creative videos showing their creation progress.

Although its sales during the circuit breaker period is still lower than before, Dinakaran said its online selling strategies have definitely helped. She added that if it did not venture into the digital space, it would have seen a much bigger setback.

What happens after business as usual resumes?

Online selling strategies seem to be here to stay, despite F&B businesses being allowed to soon resume dine-in operations. Even though its online selling strategies emerged out of extenuating circumstances, Madras' Dinakaran said it will continue its delivery and takeaway services, while placing equal importance on dine-in operations.

Due to the uncertain social situation, and how consumers may still be uncomfortable with dining physically at its restaurant, Dinakaran said maintaining its delivery and takeaway services is still important even after dine-in operations resume.

To balance between its delivery and dine-in service, the restaurant will impose at least a one and half hour waiting time for delivery orders.

This is to ensure that the kitchen will be able to cope with orders coming in from both sides. She added that in order not to compromise on a personal touch when it comes to delivery and takeaway orders, the restaurant will actively reach out to consumers and encourage them to provide feedback about the food and services. 

Meanwhile, bottled cocktail company LAB Inc’s founder, Laura Barker, told Marketing that it is optimistic that online transactions will continue to grow after lockdown. “We believe consumers habits which have developed during quarantine will partially be maintained. Based on statistical data, online food and beverage delivery has also been a fast growing market over the past few years,” she said.

Garibaldi's Visioli seconded the point of view that more consumers may still choose to opt for delivery and takeaway options. “This Circuit Breaker period has shaped many consumers to try food delivery services, and it may have become a comfortable routine for some,” Visioli said.

Garibaldi will not only be continuing its delivery services, but also delving more into online selling and launching two separate delivery concepts.

These concepts are "Burrata Joy" and "Gustavo Lapasta", a cheese-focused and pasta-focused delivery service respectively. It has also integrated its delivery orders into its existing point-of-sale system so that it can guarantee that both delivery and dine-in experiences will have the same amount of attention and dedication.

Crowded delivery platforms a push

When asked why restaurants choose to launch their own delivery services instead of tapping on food delivery players, both Garibaldi and Madras said they did initially consider food delivery platforms, but were subsequently placed on waiting lists due to the high volume of businesses trying to get on the service.

Wanting to provide delivery and takeaway options as soon as possible, Garibaldi decided to launch its own delivery services instead. Visioli also said that an advantage of having direct delivery service is that it gives the restaurant direct control over its online selling services. “When a company starts a new range of services or a new product, it is good to understand every single aspect of that, so we wanted to understand better how the delivery services work, and we created our own system to organise deliveries, orders, packing and run it smoothly,” he said.

On the other hand, Dinakaran said besides the longer waiting time needed to get onboard delivery platforms, cost was a concern as well. With a commission rate as high as 36%, the restaurant was not sure it was the right choice for it to join a delivery platform given that its food pricing was not high. 

There has also been a rise of F&B businesses that focus solely on online delivery. Newly-launched business Overly Cheezy Pizzeria was quick to set up its website to facilitate its delivery services. According to its owner Kenny Wong, it chose to focus on online selling as delivery services are flourishing during this period. Overly Cheezy Pizzeria has also opted to launch its own delivery channel, instead of joining a delivery platform.

Wong told Marketing that even though joining a delivery platform seems to be a natural step for F&B businesses during the Circuit Breaker, the high commission fee was a stopping factor. He also said it will definitely consider joining these platforms at a later stage, but that will mainly be for marketing purposes and to boost its online visibility.

LAB Inc’s Barker also agreed that it is more cost-effective to launch its delivery channel as food delivery companies work on high sales percentage and delivery fees. She is quick to note, however, that businesses should ensure they have the resources to manage in-house delivery before launching their own delivery channel.   

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