One of the industries undoubtedly feeling the effects of the current Covid-19 coronavirus pandemic is the restaurants and hospitality industry. According to the Office of National Statistics, 79% of those furloughed in the UK due to the Covid-19 pandemic were from the food and accommodation industries.
With all restaurants in the UK only permitted to open for delivery or takeaway, many have rushed to adopt new digital-first business models.
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Karakuri feels coronavirus impact on restaurants
One organisation witnessing firsthand the impact the coronavirus pandemic is having on the restaurants and hospitality industry is robotics startup Karakuri. Launched in 2018, Karakuri specialises in off-the-shelf food preparation robots, with its two models designed to dispense precise quantities of ingredients and rapidly produce customisable meals.
The business has received attention from those in the food world, with investors including online supermarket Ocado, while Heston Blumenthal is one of the company’s board advisors.
However, like many aspects of the industry, Karakuri has felt the effects of the coronavirus pandemic, especially as an early-stage business.
“The biggest immediate impact was two-fold,” Karakuri co-founder and CEO Barney Wragg told Verdict.
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By GlobalData“Firstly, all of the restaurant customers we were talking with, in the UK and overseas, started to be forced to close. Secondly, a lot of our retail and grocery customers have faced huge issues fulfilling online orders and keeping their supply chains operating. So we found the immediate short term impact was a rapid fall-off of business development activity.
“Fortunately, we’re still in the R&D phase of our products, so we’ve been able to focus our activity on development and product improvement to meet the changing market.”
Tech solutions to the hospitality industry crisis
The industry faces the significant challenge of adopting new ways to deliver to customers, while maintaining good customer service and abiding by social distancing guidelines, at a time when revenue may be suffering. Many have adopted tech-centric solutions.
For example, e-commerce platform Slerp has been assisting restaurants in setting up online stores, and has waived set-up fees, Foodchain, a platform that connects chefs with suppliers, has opened its app up to consumers and London bakery Bread Ahead has launched online baking classes through Instagram Live.
Robot food delivery company Starship has also seen a sharp rise in demand for contactless deliver and told Verdict that it is “working as quickly as possible to expand our robot delivery service so we can help more people” and has had grocery stores, restaurants and other delivery companies get in touch to ask for assistance from their robots.
Karakuri has felt the impact of the increased pressure the industry is under, says Wragg.
“This is a tough time for restaurants, they’ve literally been forced to close. We know of restaurant groups where they have been able to retain only 200/300 staff and 20,000 people have been furloughed. It’s unprecedented,” he says.
“In general, we’re seeing most operators doing everything they can to support furloughed staff, with many making up wage differences between the government allowance and what the employee would normally earn. It’s clear some restaurant groups are going to struggle, staff, property and supply chains are all challenging right now.”
“We are seeing some interesting developments”
However, although the immediate priority for many is to stay afloat during these challenging times, some are exploring the role technology could play moving forward.
“We are seeing some interesting developments. Some of the more forward-thinking operators and some of the challenger brands seem to be prepared to adapt to the new norms quickly and are looking to update their operations and offerings to adapt,” says Wragg.
“In the initial phases of the Covid crisis, most of our customers were overwhelmed dealing with closes of their restaurants or adjusting their retail businesses to the new norm. We then started to see people looking at our products in the light of a post-Covid future. Before Covid most of our days were spent meeting customers face to face, at the moment we’re spending a huge amount of time on video conferences.”
According to research by Mckinsey & Company, consumers in China, where lockdown restrictions have been eased, are now more hesitant to visit restaurants, with ongoing wariness about being in close proximity to others, and more is being spent on food deliveries and groceries.
Mckinsey has also predicted that consumers will have a greater concern for food hygiene and safety, and a stronger demand for digital and delivery.
Technology companies like Karakuri will likely have a role to play in this new environment.
With many consumers now accustomed to contactless delivery, once lockdown measures have been lifted, consumers may have a renewed interest in using technology to improve food hygiene.
Although Covid-19 is not known to be transmitted through food, the use of food preparation robots, which lower the risk of cross-contamination of different ingredients, may be incorporated into businesses’ food hygiene strategies moving forward.
Furthermore, Karakuri’s robots work by allowing customers to interact with a restaurant’s menu via an app, which may offer a solution for consumers and businesses to serve food while social distancing measures are in place, for both customers and staff members.
Tackling the issue of food waste, not just from an environmental perspective, but to help restaurants minimise costs may also play a role at a time when they are facing significant business challenges. Karakuri’s use of machine sensing enables businesses to understand the precise quantities of ingredients used in each meal, helping cut costs.
“Covid will have repercussions long after this initial period of lockdown”
Wragg believes that these will be key considerations as restaurants and other catering settings plan for the future.
“It’s very early to say, but it definitely feels like Covid will have repercussions long after this initial period of lockdown. When the world reopens, we expect there will be a greater focus on hygiene levels, even tighter control on expenses (such as portion control and food costs) and a sustained move towards delivery and takeaway,” he says.
“We’re hearing that operators are really concerned about the “if and how” consumers will return to serve yourself, buffet or canteen service offerings. These are a staple of many major catering services like schools, hospitals, hotels and large organisations.”
He highlights that restaurants may have to adapt to a world where social distancing is expected.
“Nobody knows what will happen yet, but many operators are starting to consider a future where social distancing is the normal – distancing that includes the distance between staff and customers, and importantly, staff members working in the kitchen and service,” he says.
“This would be a huge change for an industry that has prided itself on working in small footprints. As with all challenges facing the human species, Technology will play a central role in this future landscape – from the drive for robotics and automation to mitigate hygiene concerns to AI to manage food costs and portion control offering healthy, personalised meal choices in a safe and cost-effective way.”
Of course, robotics are not intended to replace human kitchen workers, especially at a time when many face job insecurity, but may have a greater role in food preparation once the pandemic has eased.
Investment in innovation, as well as ensuring that organisations in the R&D phase such as Karakuri are given the support to continue to grow, will be vital moving forward.
Read more: Coronavirus case studies: How food startup Karma switched to deliveries.
