The Future of Food After COVID-19

by Sarah Tan, General Manager of Deliveroo Singapore

COVID-19 has hit the world in unimaginable ways. To reduce the spread of COVID-19 across the globe, social distancing measures have been put in place, resulting in many restaurants to close their doors. Here in Singapore, table sizes and operational hours have been reduced, with the Department of Statistics Singapore reporting a 43.5 percent drop in F&B sales in June compared to June 2019*. To help restaurants and customers cope amidst the pandemic, food delivery has become an indispensable part of people’s daily lives and restaurants' businesses.

In order to survive in a world that no longer allows gatherings and out-of-home celebrations, or at best up to eight under phase three from 28 December onwards, restaurants have turned to delivery services to engage with their customers digitally and to keep their businesses operating. While consumers and restaurants were already embracing the idea of partnering with delivery apps and offering menus online, COVID-19 has simply acted as an additional catalyst to a growing trend. Food delivery companies do more for restaurants than act just as platforms from which to order and deliver food, they also offer specialised marketing, brand development, open up new revenue streams and even support to develop virtual brands to further their reach to potential customers.

The days of merely ordering Chinese take-out or pizza and wings for game nights have morphed into something bigger, with delivery companies offering everything from local-favourites to essential on-demand groceries, and even food from luxury hotels and Michelin star restaurants. The ability to connect with local restaurants and high-end eateries through food delivery platforms has truly shifted how we eat and drink, opening up new options and endless possibilities for consumers.

The F&B sector has been one of the hardest hit by COVID-19, with visits to restaurants, malls and other recreational places declining by about 60 per cent as of April, compared with the first five weeks of 2020, as the pandemic hit Asia, months even before its spread to the rest of the world. Delivery platforms have played an important role in supporting businesses to maintain trade and protect jobs. Food delivery apps have helped protect approximately 110,000 jobs in our partner restaurants in Singapore from being lost or furloughed between April and June, with our platform supporting 7,300 jobs in the Singapore economy alone. The industry has generated SGD 2 billion in revenue, according to a recent Capital Economics report.

However, it is not just restaurants that are using delivery platforms as a lifeline through these troubling times, as food delivery companies across the city have onboarded thousands of riders to meet the surge in demand for take-out orders. Deliveroo Singapore, alone, has received nearly 5,000 rider applications in Q1 2020. In recent months, many Singaporeans have experienced layoffs, while others have gravitated to home offices. Delivery apps are able to offer part of the solution to an increasing unemployment rate, providing an opportunity for people who have been out of work to use them as a path back into the jobs market, as well as satisfy people’s growing demand for home delivery. This is particularly important for elderly, vulnerable and isolated people who are unable to leave their home.

In addition to creating new opportunities for work, delivery companies have also given back to the community through initiatives that provide support to the healthcare sector and marginalised groups experiencing hunger.

Food delivery platforms have become a vital part of communities during Covid: enabling essential workers - riders - to feed the vulnerable and isolated; giving restaurants a lifeline and critical support when they needed it the most; enabling customers to safely order the food they wanted; investing to provide discounts and promotions for customers, which also increases sales for restaurants. This is in addition to developing new partnerships that enable traditional restaurants to set up delivery options and reach new customers.

The relationships food delivery platforms have with their restaurant partners has developed over the years. Deliveroo not only provides a delivery network to reduce restaurants’ costs, but further empowers them to focus on the core of their businesses: cooking and having more people eat amazing meals whenever and wherever they want. Since the start of COVID-19, approximately 2,000 restaurants have joined our platform. In addition to this, delivery platforms have taken on necessary steps to help restaurants through the immediate crisis. These include helping them to tackle liquidity issues and investing in marketing campaigns to increase their sales.

In the long-term, food delivery apps will focus on helping restaurants grow their business, supporting dine-in operations while at the same time maximising the benefits of delivery, overall reaching a bigger customer base. This will be supported by sharing data insights into consumer patterns and their own performance, as well as helping them from a marketing and branding perspective.

Meanwhile, to support riders, delivery platforms will continue to ensure riders receive protection and support during the crisis, and beyond. Now designated as essential workers, riders have been supplied with protective equipment, as well as extra financial support as needed.

The habits developed by consumers throughout COVID-19 are not ones that will likely fade away; delivery is indeed the new normal, and many opportunities lay ahead for platforms, consumers, restaurants and riders alike.

*https://www.singstat.gov.sg/-/media/files/news/mrsjun2020.pdf

**Based on data from Google location notification services, reported by the Monetary Authority of Singapore (MAS) in their twice-yearly macroeconomic review.