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Food caterers ‘hobbling on’ amid slow recovery from COVID-19 pandemic

Food caterers ‘hobbling on’ amid slow recovery from COVID-19 pandemic

Caterers like Rasel Catering have been hit hard by the pandemic, as large-scale events remain cancelled, pushed back or scaled down in line with safety measures. (Photo: Rasel Catering)

SINGAPORE: After trudging through steep revenue declines for more than a year, food caterers battered by the COVID-19 pandemic see a long and slow recovery ahead for their industry. 

Their bread-and-butter events - like parties, graduation ceremonies and corporate gala dinners - remain cancelled, pushed back or scaled down, in line with crowd-limiting safety protocols.

To survive, many have shifted into smaller menu offerings, ready-to-eat meals and even new virtual brands but have found themselves up against their smaller peers in the food and beverage (F&B) sector.

“We are the worst hit in this pandemic because being caterers, our strength is in doing events or food receptions at a bigger scale,” said Rasel Catering’s co-owner and creative director Chris Loh.

“But right now, we are doing smaller orders that can be done by anybody who is in F&B so we are competing with restaurants, home cooks, hawkers and even delivery platforms. It is a super competitive market and our unique selling point is no longer very much available.”

READ: As buffet lines resume, hotels ramp up manpower to meet COVID-19 guidelines


Food caterers are far from the only ones upended by a protracted pandemic, but they seem to be among the harder hit in the F&B sector if official retail sales are to go by.

Since the start of last year, caterers have seen double-digit slumps ranging from 30 per cent to nearly 80 per cent in their turnover. Latest data for May showed sales down by 52.3 per cent from a year ago, widening from the 31.7 per cent decline in April.

On the other hand, most of the other F&B service industries have seen positive year-on-year growth in sales since February.

The Association of Catering Professionals Singapore (ACAPS) said the steep revenue declines shown in the official retail sales data are “very reflective” of its own survey findings.

“Make no mistake about it, the catering sector is really battered,” said the association’s secretary Patrick Chan. “Compared to the rest like restaurants and cafes, our model is a very bulky one with huge kitchens and big trucks. Catering for small orders is not very profitable. We still need large-scale events.”

ACAPS said it does not track how many in the industry have permanently closed down but it has heard of some players opting to “be dormant for now” and others scaling down their operations to cope with the drop in demand.

READ: Remember the good ol’ days of buffet spreads? They’re back. Well, kind of

The resumption of buffet lines with the requirement of food being served by staff in mid-April had little effect on sales, added Mr Chan.

With safety in mind, the requirement was “very manpower exhaustive” and caterers were unable to absorb the cost of hiring more servers. Customers were also not receptive to the higher prices and preferred other offerings like bento sets.

The tightening of measures under the so-called “heightened alert” in May was another dampener.

Luxe Catering saw nearly 10 event cancellations following the announcement and had to quickly shift to promoting its takeaway menu and special F&B gift sets.

“We knew we had to do our part to be socially responsible but there was definitely disappointment because we’ve built up some momentum since Phase 3 last year. All of a sudden, it’s like ‘circuit breaker’ all over again,” said manager partner Niccole Chan.

With events being a no-go, Luxe Catering started offering food and beverage gift sets for individuals and families as part of its diversification during the pandemic last year. (Photo: Luxe Catering)

While other F&B businesses got some reprieve when dine-ins resumed about two weeks ago, caterers remained “in the dark” until last week when it was announced that wedding receptions would be allowed again from Jul 12.

That said, it remains unclear if serving of food and drinks can resume for work-related events, such as product launches and marketing events held at workplaces or other third-party venues. This is a key concern for Ms Chan, as such events form the bulk of her bookings.

“It’s good that we finally have some certainty for the weddings we are planning for, but we were hoping for some announcements or timelines for workplace events and we are a little disappointed on that.”

At Rasel Catering, Ms Loh is not expecting much of a boost from the latest easing of restrictions.

“We have received some enquiries for gatherings and weddings, but they are not confirmed because I think everyone is still a little cautious,” she said.

“Also with work from home remaining the default, I don’t think corporate orders will return in a big way. The increase in dine-in capacity does not help us so I would say it’s still very depressing for caterers.”


Food caterers have not been just waiting for rules to be relaxed.

Over the past year, many have diversified into menus for smaller celebrations, individual bento boxes and gift sets. But these offer low margins due to smaller order sizes and higher costs for labour and packaging.

READ: Smaller menus, more takeaways this festive season as F&B businesses see ‘high’ eat-at-home demand

Ms Loh said: “In the past when we do an event for less than 100 people, it probably requires 10 chafing dishes for all the food, which means you only need one driver and one or two staff for delivery.

“But now for 100 bento boxes, we will need around 10 packers and for deliveries, we have one driver on three locations... If it's multiple locations, we will need more people so it’s a huge surge in expenses.”

Apart from that, the costs of some ingredients have gone up by about 5 per cent due to pandemic-related disruptions in shipments, said Delizio Catering chief executive Joseph Lee.

“The events business has gone down so everybody’s fighting for a much smaller pie. But we need more manpower to pack and deliver so costs have gone up. It’s a double whammy,” he said.

“Everybody is just hobbling on and trying to get over this period.”

Under the encouragement of ACAPS and support from Enterprise Singapore (ESG), other caterers have also tried venturing into a different line of business, such as launching virtual F&B brands.

These brands, which are available only for delivery and takeaway, allow caterers to experiment with new offerings out of their idle kitchens.

This saves costs but it is not without challenges, said Mr Chan.

“The kitchens of most caterers are located at the far ends of Singapore so when caterers list their virtual brands on delivery platforms, they don’t get much (orders) because they are located too far away,” he explained.

While caterers can tap their own delivery fleet, it does not always make economical sense to “use a big van for a small delivery order”, he added. “It is definitely not easy but caterers are willing to try.”

READ: Companies seek new opportunities to stay afloat amid COVID-19 pandemic

Another area of diversification is to enter the market of ready-to-eat meals.

Mr Chan, who is the chief executive of Kitchen Haus Group that owns four catering businesses, is one of those who have made the shift.

His company rolled out a new brand Gourmet Xpress about a year ago but is only starting to see “some traction” now given that this is a “very saturated market” with many household brands, he said.

Resal Catering is also in talks to enter the ready-to-eat food segment but Ms Loh said the company is eyeing the export of its products overseas as the local market is “too limited”.

For Mr Chan, his company has gone into the agriculture sector by partnering a local urban farm. The new brand, called Frux Earth, launched its first vegetable subscription box this week and hopes to differentiate itself with a “farm-to-table” concept.

“We know that the catering industry is going through an upheaval, much like the department stores, but we are willing to try to remain relevant,” said the ACAPS secretary.

“ACAPS is very glad to see many of our members pivoting to new products and services. The association, with ESG, will continue to assist them with technical know-how and funding support.”


Ultimately, the industry said it needs bigger events in order to recover.

Businesses that spoke with CNA noted some hope on the horizon with authorities announcing differentiated measures, including bigger social gatherings and higher capacities for some activities and public venues, for those who received jabs under the national vaccination programme.

READ: People fully vaccinated under national programme may be able to gather in groups of 8 from end-July

“Ultimately for us, if we focus solely on takeaways and deliveries, it will not bring in the same revenue unfortunately as catering for hundreds of people,” said Ms Chan from Luxe Catering.

“If the differentiated measures allow organisers to eventually hold events for more people and while offering a peace of mind, then that’s the way to go for us.”

But this remains very much dependent on the COVID-19 situation here and changes in consumer behaviour may mean that the recovery ahead will be slow, said Ms Loh.

“It’s definitely not going to be an instant rebound simply because people are cautious, rightfully, about how their food is served and also want to take precautions when it comes to taking part in some events,” she added. “So with these human behavioural changes, I expect the recovery to be slow.

“It also depends on how fast the Government measures are relaxed. If this takes longer and the message is to stay home, then it may be difficult for people to come out of that comfort zone immediately.”

With that, Ms Loh said she is hoping for the Government to consider rolling out specific support measures for the industry.

“I think they have to isolate catering from the rest of the F&B industry. Dine-ins, whether it's two or five or eight, doesn't mean business for us ... so I would urge the Government to be a little bit more sensitive to this sector because if not, I would think a lot of caterers will soon be exiting the market.”

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Source: CNA/sk


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