Reflections from lockdown

Published on 1 June 2020

Melbourne Food & Wine Festival surveyed the Victorian food, drink and hospitality industry to uncover the key challenges of the lockdown, how businesses responded, what the new normal might look like and what support is required on the road to recovery.

It’s been an incredibly challenging few months for everyone, but particularly those in the business of socialising and pleasure. We are buoyed to see that the hospitality industry can resume some trade from 1 June, albeit with restrictions in place.

For now, we share with you a temperature check of the Victorian food and drink industry that was conducted in May. Survey respondents included restaurants, bars, pubs, cafes, bakeries, caterers, vineyards/wineries, breweries, distilleries, producers, farmers, retailers, wholesalers/distributors, hotels, accommodation venues and more.

Responses to the survey were anonymous. We’ve grouped them into themes below and edited for grammar and clarity.

HOW MANY PEOPLE WERE SURVEYED?

We had 104 responses.

64.4%

came from Melbourne


35.6%

came from Regional Victoria


HOW DID HOSPITALITY BUSINESSES RESPOND DURING LOCKDOWN?

The most common commercial responses were to create an online store and offer takeaway. Many businesses also updated their health and hygiene practices. A very small number of businesses closed permanently.

 

WHAT WERE THE BIGGEST CHALLENGES FACED DURING LOCKDOWN?

Other than sales and revenue, relentless adaptation, staff morale, supporting temporary visa workers and balancing business and home life are some of the challenges that businesses highlighted.

“Knowing that many of my staff are not supported (particularly visa holders); knowing that I need them all if we want to re-open quickly and easily; creating a new business plan every three weeks; my staff are working less, but are exhausted from the agility they need to adapt to.”

“On staff we have split into two separate teams ensuring the business can stay alive. There are obvious HR challenges with this.”

“Maintaining staff morale when not working beside them on a daily basis.”

“Keeping culture intact whilst having hard conversations.”

“Energy. Although we are keeping everyone’s spirits up by servicing our community and keeping our crew up, I'm feeling like [I need] a holiday as at every announcement we have to rethink, research, and adapt.”

“A balancing act. Ensuring our business survives while trying to manage a family, home schooling, running other businesses and cooking dinner all at the same time.”

“Creating a successful diversified product (home delivery) – this is a challenge for a venue that is ordinarily an exclusive event space. Unlike a restaurant, our database isn't necessarily engaged with us on a 'take home' basis.”

“Unable to do tastings to drive sales. Limited promotional activities. Our business is based on face-to-face sales and marketing, which isn't possible.”

“Stock continuity and difficulty getting stock transported due to courier companies dropping their days with restaurants being closed.”

“Working on appropriate models (if possible) for a return to hosting cooking classes with COVID-19 social distancing rules. Ongoing rescheduling, refunding of cancelled cooking class sessions, and managing enquiries.”

“Losing contact with regular customers and missing out on our regular yearly events and traditions we've upheld for more than 50 years.”

“The main challenge will be how we remain profitable with lower seating capacities, which essentially increase our wage bill and rent per capita. As these were already at the limit many people simply won't be able to reopen or remain open for long.”


WHAT SUPPORT FROM GOVERNMENT AND OTHER BODIES WOULD BE MOST USEFUL?

Tax relief, government grants, reviewing award rates, business mentoring and marketing support are some of the recommendations that respondents put forward.

“Marketing and messaging that helps the general public feel safe to return to restaurants, pubs, bars and hotels.”

“Official health and safety procedures and training for staff. Standardised hospitality hygiene practices to give consumers confidence in returning to venues. Media that advertises venues as safe spaces.”

“A review of all on-costs, wages and penalty rates moving forward as it can’t be sustained as it is.”

“Tax breaks for small business for another six months.”

“Lobbying for tax relief, marketing support for the restaurants and a fresh drive to all venues.”

“Lower taxes, rent relief and the ability to open for larger numbers so we can actually continue with weddings and events.”

“Government to support small businesses by providing on-going tax incentives and reducing penalty rates on weekends. Local councils including City of Melbourne ensuring that hospitality venues do not saturate each suburb to allow businesses to make profits, pay staff and suppliers and meet our obligations.”

“People will spend less dining out and will choose cheaper alternatives. Hopefully the government will allow entertainment to be claimable again to increase restaurant spend whilst keeping staff wages as they are.”

“Government grants for growth and innovation particularly in environmental friendly initiatives.”

“More industry forums and a hub for the industry to support itself where we can exchange ideas and advice.”

“Some professional business mentoring to assist with a revitalised business plan.”

“A mechanism for consumers to know that prices will go up. It's actually the best time to be a consumer right now – the quality of takeaway has never been better or cheaper. It’s creating a false economy though and the worse thing for the industry is for consumers to expect this level of quality at this price post-lockdown.”

 

WHAT ARE THE TOP PRIORITIES FOR BUSINESSES WHEN RESTRICTIONS ARE LIFTED?

The overwhelming majority stated that sales and cashflow would be their focus following lockdown, followed closely by the health and safety of employees and patrons. Takeaway and delivery was the second to last concern.

 

 

HOW HAS THE PANDEMIC AFFECTED OUR RESTAURANTS AND DINING CULTURE?

Business owners talked about the after-effects of the lockdown and the virus, from the atmosphere of their venues to price increases and a changed consumer mindset.

“Without the hustle and bustle of a full restaurant you miss what’s arguably the most important part of the restaurant experience. Restaurants restricted to 50 per cent capacity don’t hum, they actually cheapen your brand.”

“Experience-based venues or places that are unique will prosper post-coronavirus. We will all seek this. We might not be able to afford to go out as much, but when we do, we'll want it to be special.”

“People will become more aware of their surroundings which means they will take more notice of where they go and how long they spend there. People will take notice of cleanliness, staff appearance and how well the establishment is contained. I think they will focus more on quick bite places rather than long periods of dining and takeaway options.”

“A more conscious effort from customers wanting to support their local restaurants, bars, wine shop. Our customers have been so vocal about supporting us continually – they really understand that if they don't support businesses such as ours, we won't be able to be here.”

“People will be more cautious about their spending and we will have to find lower cost offerings to allow for this. People will also be a little timid about how to interact in public spaces and will need direction from venue owners.”

“A new customer who is focused on health, safety, wellness, price, supporting local.”

“Vibrancy and that shoulder to shoulder atmosphere – physical distancing will challenge that 'vibe' until a vaccine is available.”        

“The top-end restaurants may suffer. No tourism will be very challenging for many businesses.”

“Price increases definitely. Floor layout with less communal tables and less cramped seatings. Focus on menu items and fewer 'shared plates'.”

“There is a minimum operational and staffing cost that restaurants incur and if that minimum cannot not be recovered due to reduced diners as a direct impact from social distancing then a good part of the industry is in jeopardy.”

“Reluctance of guests to return to normal hospitality densities due to fear.”

“There will be changes in consumer behaviour. People will have to cut back on their non-essential needs. They want better hygiene practices, more spaces between tables, better takeaway, ordering and delivery technologies. For hospitality that means we will have to accommodate the new set of requirements but with potentially less income/revenue. And we also have the deferred payments from the lockdown period on the shoulder as well.”

“Trust in participants and avoiding clusters and outbreaks once easing commences – keeping everyone safe and protecting your business or event against being associated with a cluster/outbreak.

“A loss of small, passionate operators doing great things. Where are the next generation of Australian chefs going to get their training as we continue to lose fine dining experiences and focus on fast casual dining and takeaway?”

“Potentially better hiring opportunities – or not, as some chefs have already left the industry.”

“Overall I think the biggest challenge will be to create new business models for restaurants that are sustainable, progressive, and also more profitable.”

 

WHAT DOES THE FUTURE LOOK LIKE?

With different spending habits and more people working from home, owners pointed to a thinning out of the restaurant industry, a need to rethink their offer and the challenge of covering costs.

“E-commerce will continue to grow in importance.”

“Supporting local producers seems to be increasing dramatically.”

“We will have to be flexible to respond to so many unseen bumps. Our products will only be similar to what they were pre-closedown.”

“We need to understand how to make a living from significantly smaller in-house clientele.”

“I think food drink and hospitality will never go back to what it was. I suspect fine dining is finished and we don't quite know what will take its place.”

“Once JobKeeper stops then it will be very difficult for hospitality businesses to survive, especially if there are still restrictions on the number of guests allowed per square metre. It would mean that a number of our favourite restaurants and bars may be forced to close down and that will be the one of the saddest things to come out of this.”

 “Having to diversify our business and making any profits will be next to impossible. With current wages and produce pricing, menu prices will have to rise and the industry will be thinned out by about 40%.”

 “The biggest change will be the number of venues that will close as a result.”

 “More people will inevitably work from home in the future reducing foot traffic in and around the city which in turn may mean there is less revenue to be shared between so many venues.”

 “Creating the right experience under social restrictions and encouraging people to visit the CBD to dine out while they are still working from home.”

 “Consumers and operators want very different things. The former will be used to convenient quality at low prices. The latter needs to increase prices to survive and may not be able to bend over backwards for everything.”

“Managing the initial burst of return and the expected slump afterwards. Mentally managing that it won't be 'business as normal' or as it was before.”


                                                        Angel Music Bar courtesy of Isabel Lyon


WHAT'S THE VIEWPOINT FROM REGIONAL VICTORIA AND THE TOURISM INDUSTRY?

Businesses suggested putting a more human face on regional promotions and marketing; others expressed an overriding sense of uncertainty about the future.

“Would be so fantastic to be able to profile the unique offering found in Barwon Heads. Regional promotion and business profiles that add a human element rather than just buy, buy, buy messages.”

"It would be really good to have our area in central Victoria recognised as a serious region by both MFWF and Visit Victoria. We have one of the oldest wineries in the state in Tahbilk and really exciting wineries like Mitchelton and Fowles, whose owners have spent a small fortune building hotels and restaurants. We would also like to see events like Regional World’s Longest Lunch come back. We have run a number of really good lunches that people still talk about."

“Once travel restrictions are lifted it's going to be game on for regional Victoria as we all compete for Melbourne visitation. How great it would be if MFWF did monthly marketing campaigns for each region and really shone a light on what's happening across Victoria. The campaign could include online events, pop-up events and virtual tours. Businesses won't have the cash flow to be able to get these up – the ones doing it toughest especially.”

“Despite the uncertainty and anxiety around JobKeeper, we have heaps to do in the vineyard over winter so are using the time to get all sorts of overdue jobs completed and be on our toes and ready to spring the minute the restrictions are lifted and people can travel to country areas and visit my cellar door.”

“Sales of our wine, which are mainly stocked in restaurants, are now struggling as it is a higher end product.”

“We’re challenged by the inability to collaborate with regional businesses given the lack of resources or undertake scheduled events and projects to improve our business. I’d say uncertainty is the greatest challenge in all areas. Not knowing what restraints will be in place.”


ARE THERE SOME POSITIVES TO COME OUT OF THIS? 

Respondents showed some cautious optimism about the future of the industry and consumer behaviour towards supporting local, as well as some concrete learnings in the area of e-commerce.

“A lot of businesses have been forced to readjust and come up with new ideas and platforms to survive. Online sales, home deliveries to customers, zoom events and collaborations. I don't think this is necessarily a bad thing and it will shape the industry in a different way as many of these new practices will probably remain once everything goes back to normal. Personally, we have received fantastic support and response from the community when we launched our online store and we are looking to keep and integrate the online store into our regular business once everything resumes to normal.”

“Setting up an online store with minimal knowledge of e-commerce.”

“I am hoping that patrons respect the job that we do better.”

“People will stop being so opinionated and appreciate how hard hospitality is without a lot of reward. It’s still the most criticised of all industries.”

“Everybody understanding that it will never be 'business as usual' and maybe that's not such a bad thing.”

“Supporting local producers seems to be increasing dramatically.”

“I deliberately broke my crystal ball, but I do have a wish for those who have looked after their staff and suppliers to prosper.”

“Consumers will support local more than ever and are more open to online events and store purchases. While people will be cautious about returning to venues, they'll welcome the return to face-to-face dining and entertainment.”

“We're adaptable people and will make something work no matter what.”

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