'It’s about trying until our last breath': New F&B players cook up survival plans for COVID-19 crisis
SINGAPORE: For more than half a year, first-time food and beverage entrepreneur Andrea Tan had been working hard to get her cafe, Lucid, ready for business.
But on Feb 4, a day after concluding the cafe’s soft launch, a Chinese health products shop located on the adjacent street was discovered as Singapore’s first local cluster of COVID-19.
Four people had caught the novel coronavirus after some had “prolonged interactions” with a Chinese tour group that visited the shop in mid-January. The number of infections linked to Yong Thai Hang, the health products shop on Cavan Road, would later grow to nine in less than a week.
For Ms Tan and her co-owners who decided to bite the bullet and open the cafe as planned, this was “very scary” news.
“We were very worried that people would start avoiding the area, thinking that it wasn’t safe,” she said.
By Mar 10, the cluster at Yong Thai Hang was given the all-clear but the virus outbreak in Singapore did not stop. Each spike in the number of infections and countermeasures by authorities – safe distancing rules followed by a “circuit breaker” that included a ban on dining-in – dealt a blow to the newly opened cafe and its owners.
The “worst week” came when the circuit breaker kicked in on Apr 7. Revenue fell by a sharp 90 per cent.
“The first week of the circuit breaker was really bleak for us. We haven’t started deliveries yet so we were reliant on takeaways but no one was coming out to take away food,” said Ms Tan.
Plans that were drawn up previously, like holding coffee brewing classes, had to be shelved as new ones, such as offering deliveries, were quickly added to shore up business.
Ms Tan and one of her co-owners are now doing their own deliveries, and can make up to 15 trips a day.
Speaking to CNA at on one weekday at 8pm before her final delivery for the day, the 25-year-old, who also runs a coffee consultancy and is an award-winning barista, said: “I’ve been joking with my friends that my quarter-life crisis is a virus pandemic.”
NEWCOMERS FACE ROUGHER RIDE
Ms Tan’s experience is not uncommon with the F&B industry among those hardest-hit by the COVID-19 pandemic, although newcomers are likely facing a rougher ride.
“We’ve not had enough history in the F&B scene to have our own supporters so it’s a fight against time to have our brand known and remembered,” she said, while noting that Lucid, with an investment of about S$200,000, could now take longer to break even.
“This is definitely not the best time to be launching something new and hope that people will want to give you a try.”
READ: Events postponed, restaurants ‘near empty’: F&B industry on the chopping block as COVID-19 measures bite
Over at a coffee shop in Toa Payoh, an eight-month-old noodle stall is trying to stay afloat after the COVID-19 outbreak struck just as business was stabilising.
“It’s definitely been at least a 50 per cent drop in sales,” said co-owner Jeevan Ananthan who is also the main cook serving up bowls of fishball noodles and bak chor mee.
The 29-year-old ditched his investment banking job last year to join the hawker trade with former digital marketer May Leena Krishnan. But a “racial barrier” made it difficult for the couple at the start.
Said Ms Krishnan: “There was a period when every stall will be crowded except ours. People are just not used to seeing an Indian man cooking Chinese noodles.”
Some had “snarky comments”, recalled the 30-year-old. “There were people who asked the other stall owners if we are really selling bak chor mee or questioned us if we know what the ingredients are and what we are doing.”
Two months after starting up, Ms Krishnan decided to put her marketing skills to use and uploaded a video of Mr Ananthan cooking fishball noodles on Facebook. That made the rounds on the social media platform, attracting media interviews and before long, the stall was seeing customers who came from as far as Changi.
“People thought we were interesting and after giving us a try, they realised that our food is actually not bad,” said Ms Krishnan, who makes the stall’s fish balls and fish dumplings from scratch.
The couple managed to break even by January as orders picked up steadily. However, business soon started to see a slowdown with the virus outbreak emerging later that month.
Amid the looming uncertainty, the couple is putting on hold plans for expansion.
“The only plan now is to stay put and protect what we have so carefully built,” said Mr Ananthan.
Mr Lim Wee Hsien, who co-owns Wursthans Switzerland at the new Paya Lebar Quarter shopping mall, is in a similar situation.
His 40-seater casual diner also endured a slow start after opening last October. It took three months and various adjustments to the menu before the restaurant found a following.
“We were doing very well in January and into February, so much so that we were looking for a second location,” he said. “Then COVID-19 got worse and everything has changed.”
The unexpected pandemic now threatens to take the business back to square one after revenue dropped by 90 per cent since the circuit breaker rules were enforced.
Government policies such as the Jobs Support Scheme to subsidise local employees’ salaries have helped to alleviate cash flow concerns, said Mr Lim. He was also relieved when his landlord, Lendlease, offered to waive rental payments for April and pass on the Government-granted property tax rebates for the month of May.
But with the circuit breaker extended until Jun 1, the outlook remains bleak, especially for a new entrant like him, noted Mr Lim who said he has discussed the possibility of a 20 to 30 per cent pay cut with his five full-timers until the end of these measures. He has stopped employing part-timers to reduce costs.
Amid expectations of a slow recovery in footfall and consumer spending, he hopes that landlords could consider having retail rent based on gross turnover for at least six months.
“In F&B, it usually takes about six months to know if your concept works and we know ours is working. We just need to tide through this period,” said Mr Lim.
TURNING TO DELIVERIES, NEW OFFERINGS
Despite the mounting challenges, all four entrepreneurs plan to keep operating during the circuit breaker period so as to keep their relatively new brands going and earn whatever they can.
To cope, they have adjusted operating hours, such as closing earlier as people stay home, and pivoted to takeaways and deliveries.
Apart from having their noodles available on food delivery app Deliveroo, Ms Krishnan and Mr Ananthan have engaged a driver to deliver islandwide and introduced a pre-order service for takeaways.
“We are trying to see this unexpected turn of events as a lesson for us so we want to learn and adapt. Since the launch (three weeks ago), we have seen somewhat of a pick up,” he said.
Wursthans Switzerland is also on board two of the major food delivery platforms here, with “deliveries now the only lifeline”, although Mr Lim said the restaurant hopes to get its own ordering platform up and running soon.
This is because with more F&B establishments joining the delivery platforms, new players like him are finding it increasingly tough to fight for visibility, he said. Having its own site will also help to save on the “steep” commission fees charged by delivery platforms.
Meanwhile, these new players are adding new menu items to cater to the stay-home crowd.
Ms Krishnan and Mr Ananthan have begun accepting orders for their handmade fish dumplings, as more people stay home and cook.
Over at Lucid, Ms Tan is getting ready to launch an online store selling coffee beans, drip bags, filters and other equipment for those who wish to brew their coffee at home.
“We are constantly thinking about what to do to go on,” she said. “For me and our business, it’s about trying until our last breath basically.”