The year 2020 was a very transformative one for the F&B industry globally and in the UAE. During the thick of the pandemic, retail stores and restaurants were facing cash flow constraints, since global restrictions forced them to close their doors.
Recent months have seen businesses all over the world scale back massively, so not only did thousands of local F&B businesses have to readjust their operations to focus solely on delivery, but the act of delivery has also undergone plenty of changes...
COVID-19 brought on a new reality for the F&B industry everywhere, and this new reality motivated some recently launched homegrown F&B concepts to go straight into delivery, rather than incur the substantial cost of setting up a physical eatery. “Skipping the brick-and-mortar phase allowed us to scale our delivery business faster to reach a higher number of people in the UAE - and abroad,” said Jessica Kahawaty, co-founder of Mama Rita.
“We found this was the best way to have a proof-of-concept,” said Kahawaty. Mama Rita was launched in mid-September, immediately after the peak quarantine phase in Dubai by mother-daughter duo Rita and Jessica Kahawaty.
And though by then restaurants were open for business, with defined safety guidelines, Mama Rita took in orders for 10,000 dishes in just their first month of operation. All without the help of third-party aggregators. “In eight weeks of operation, we already had loyal customers,” said Jessica. "The other day, I saw that a customer ordered over 58 times in less than 56 days.”
Another local startup, Doughlicious, which makes edible cookie dough, went straight to delivery to minimise risk, especially when introducing something so new to the market. “We wanted to validate the idea of edible cookie dough without investing a huge amount of money,” said Ahmed Zia, co-founder.
Starting virtually also helped keep their setup time short. “Launching through a cloud kitchen with online delivery platforms meant we could start with minimal capital and just a two-week startup time.”
Doughlicious launched just ahead of the quarantine period, at the Dubai Food Festival in March this year. “In hindsight, starting a business during a pandemic could have been devastating,” said Maliha Khan, who is the other co-founder.
“Luckily, it ended up working in our favour. We developed a brand that was fun and kept things lighthearted during uncertain times. It also helps that cookie dough is comfort food - I think people really craved that during the quarantine.”
The original target market was the Gen Z-ers and the younger millennials. But right now, it’s the older millennials that make up the bulk of the customers base. “It must be the nostalgia,” Khan said.
Growth during a pandemic
In 2017, before the ‘cloud kitchen’ concept started to take off in the UAE, Ziad and Rowan Kamel had the idea to create a different kind of F&B company. “We wanted to invest in our food and in our kitchen team, instead of on expensive fit-outs required for bricks and mortar restaurants,” said Ziad Kamel, CEO of Cloud Kitchen told Gulf News.
Having a delivery-only online restaurant company operational for two years before COVID-19 worked in their favour during the pandemic. The brand was already offering five delivery F&B concepts under the ‘Go!’ banner and plenty of customers were ordering.
“Our online orders increased during the pandemic,” said Rowan. “Interestingly enough, we noticed a trend at the start of quarantine, which was an increase in hearty food and fast food while demand for salads and raw food decreased,” said Rowan.
But downsides too
A physical shop undoubtedly comes with a lot of advantages. “There’s a human-human relationship that’s lacking in the digital space,” said Kahawaty. “Part of the allure in many physical restaurants is the atmosphere of the place.
However, we can’t seem to forget the price advantages and convenience that comes with food delivery, which right now, seems like a priority given the state of the world.”
Slow build up
For Doughlicious, it was the extra effort needed to win over repeat customers. “We noticed that it’s challenging gaining loyalty through a virtual concept compared to a brand with a physical location. Additionally, the margins are very tight in a delivery-only business as a big chunk goes to delivery service providers.”
To tackle these challenges, Doughliciou investing personalising each delivery package, and adding new menu items to increase profitability prospects.
“Not seeing our customers is a big challenge,” Rowan. “In restaurants, there is always an opportunity to interact on a personal level. In an online business, we have no idea who our individual customers are because their data is protected, which of course is a good thing.”
But at a time when the majority of F&B businesses are putting their operations back in order, being online only seems to be working wonders for some…