It is no secret that the Covid 19 pandemic has wreaked havoc on mankind like few before. After the loss of precious lives, the biggest casualty to the pandemic has probably been the worldwide business scenario. One of the worst hit has been the hospitality sector which is also closely linked to the Alcoholic beverages (Alcobev) trade. To get a pulse of the affairs, I spoke to some leading experts from the Alcobev trade in India even as the first vaccines are already in place and things are likely to keep getting better from here.
Effects of Covid on the Alcobev Trade
Covid-19 has affected the Alcobev trade in diametrically opposite ways. While the “off-trade” segment has seen a surge in sales due to more people drinking at home (in some states with even home delivery of alcohol), the “on-trade” segment has borne the major brunt of the pandemic due to prolonged closures and restrictions related to social distancing. Even with the progressive easing of restrictions, it will be a while before the business picks up in real sense. Almost all the experts I spoke-to, opined that it may not be until 2022 that a semblance of pre-Covid normalcy returns.
What Experts opine
Arun Kumar
Co Founder Aspri Spirits Pvt Ltd
A leading Alcobev importer and Distributor in India
The initial jolt and the challenges after Covid 19 outbreak
During the initial Covid stages, the biggest challenge was the uncertainty of the business environment and inability to gauge any time lines. The closure of both retail and on-premise business meant that all avenues of sale had come to a grinding halt.
Moreover, as the whole industry is closely interlinked, the circle of stock movement and commerce put enormous strain on matters like recovery, payables and stock inventory.
My/our workarounds to such challenges
It was important to have a calm and rational approach as the whole world was affected and we needed to find solutions together rather than working in silos. I am happy that so far we have managed to sail-through by understanding each other’s point of view and having a shared spirit of overcoming the challenges. But I think that it is still a “work in progress”.
Silver lining to the crisis situation
As the virus strain comes under control, there is rise in optimism. People’s resilience has started to show and there has been considerable improvement in the business sentiment.
Recovery rate in the past few months
As mentioned earlier, some areas in the country have bounced back a bit earlier and others are in play. One must bear in mind that the nature of the beast is unpredictable and one needs to go with the flow with a positive bent of mind.
Challenges that remain
The uncertainty that prevails, will continue to be a challenge. For example, some parts of the world were recovering from the pandemic but they are again back to square one. Therefore, we cannot take things for granted and take one day at a time.
How much time will it take for the business to recover to pre-Covid levels?
It is difficult to predict that. A lot will depend upon how the pandemic is brought into control across the world. My opinion would be sometime in 2022 if there are no other catastrophes.
Is there going to be a new normal? What will it be like?
We are already living in a new normal of masks and social distancing and it is here to stay. Humans are social animals but full scale get togethers, concerts, weddings and social occasions seem to be a distant dream for now. The current reality is fraught with a bit of nervousness and social protocol. I guess the scenario will persist until permanent solutions are found
Shatbhi Basu
India’s first woman bartender and a highly acclaimed Alcobev Personality
The initial jolt and the challenges after Covid 19 outbreak
At first it felt like something that would pass on a month or two. But as news from around the world began trickling in, it changed to disbelief and helplessness.
As everything shut down, the biggest challenge for me was to sustain and survive while still looking after my team. As the inflow of cash trickled to a stop, the worry grew, more so with the realisation that the pandemic was here to stay for long. I realised that the best way forward was to keep the team motivated and stay occupied constructively.
My/our workarounds to such challenges
After the initial apathy, my first thought was to reach out to the bartending community at large, to support and keep them from getting depressed and feeling insecure. Many had lost jobs, had no source of income and were insecure about the future. We did many online chats, giving them options on using the time for new learning and expanding their skills to embrace new opportunities.
It was time to reinvent myself as well, and I took this as an opportunity to begin writing again. This kept both my team and myself busy. Once we were able to get to office, we worked on the details of publishing the book. I am happy that we were actually able to publish it by November 2020.
Silver lining to the crisis situation
Silence often gives you time to think without the usual clutter of a work environment; which in turn allows the mind to work better and come up with ideas that would otherwise be lost.
The pandemic was also a time to rest and recoup. It afforded us to test the opportunities that one would otherwise not investigate. We were able to learn and execute best business practices in this duration.
Recovery rate in the past few months
The hospitality industry has suffered greatly as we are in the front line of customer service. The restrictions and care that we need to take remain high. The fear of venturing out remains. Hence, in spite of the initial rush post lifting of the lockdown, customers will remain cautious. The younger outlets will do better but will also remain a hazard to health and safety as they tend not to be cautious. But we remain positive and the third quarter of 2021 onwards looks promising.
Challenges that remain
In my mind the biggest challenge is getting the industry to comply with safety measures and adhere to government restrictions. The loss they have suffered, makes them occasionally forget the severity of the pandemic in their need to make up for lost time. There is a strong need for multi tasking and ingenuity in the face of lower staff strength and safe practices that must be adhered-to.
How much time will it take for business to recover to pre-Covid levels?
I am guessing we’re looking at 2022 to get there!
Is there going to be a new normal? What will it be like?
I’m hoping that we have learnt from this pandemic and the safety measures and best practices are taken forward as “new normal”. Hygiene, both personal and within the work environment will remain high. We also must remember that patience and kindness go a long way especially in our profession.
Malay Kumar Rout
Prominent Alcobev Marketer and Founder Wine and Spirits Club of India
The initial jolt and the challenges after Covid 19 outbreak
Covid came unexpectedly and affected every walk of life. It affected me too drastically, as my work hinges on people-to-people interactions across wide geographies.
The initial stages of Covid-19 involved a complete lockdown that challenged big time the traditional way of doing business as a consultant. But if you look at it from a positive perspective, the adversity gave us enough opportunities to discover new ways to accomplish our work that we might not have visualised otherwise.
My/our workarounds to such challenges
The post Covid environment brought mixed effects for me. On one hand, the stress levels in the initial period were high, but on the other, our business increased by virtue of introducing several new brands. The pandemic provided us enough time to restructure the way of working and utilisation of resources in a much professional way.
Silver lining to the crisis situation
Besides the domestic market, my major business involved a lot of international markets like Europe, South Africa, Australia, Chile, Singapore, and the USA . Many markets started reacting early-July onwards immediately after the un-lockdown on alcohol started happening in India.
A significant development was that I could afford enough time to work on the social media platform called Wine & Spirits Club of India and its Newsletter that we had launched in Jan 2020. So, from a macro perspective I am a satisfied entrepreneur.
Recovery rate in the past few months
I will not call it recovery but a phase which enhanced my progressive thinking. During this period we were able to manage and introduce 17 new wines and spirits labels in India from countries like France, Chile, South Africa, Spain, Tibet etc. We are working on 10 more new labels which will be available soon in India.
Challenges that remain
Perhaps the biggest challenge is the inability to travel abroad freely. Many bigger activities around alcohol like large scale banqueting and on-premise sales are still facing the brunt of the Covid-restricted environment.
How much time will it take for the business to recover to pre-Covid levels?
This is very subjective. In the Indian context, I suppose that it will easily take anywhere between 12 to 18 months before a considerable recovery.
Is there going to be a new normal? What will it be like?
I strongly believe that going with the flow will be the best way for a dynamic and volatile industry like alcoholic beverages. Augmented hygiene measures forced upon us by Covid 19 are definitely here to stay. Such precautions would be good for us in the longer run to prevent future health scares.
Henry Wang
Managing Director China Garden chain of restaurants
The initial jolt and the challenges consequent to Covid 19 outbreak
A sudden standstill owing to a complete lockdown came as a big jolt indeed. The biggest challenge and concern was the safety of our customers and employees as also to reassure them about our utmost safety precautions.
Some other key challenges were:
- Generating footfalls/sales.
- Business survivability, especially with the unrelenting fixed expenditure and zero sales.
- Retaining key trained staff.
- Completing current/ ongoing projects
- Maintaining consistency in the quality of food and services.
My/our workarounds to such challenges
We evolved strict Standard Operating Procedures to ensure staff and customer safety. At the same time we increased our marketing budget to make a concerted outreach to restore customer confidence. We changed our focus on deliveries and to that effect struck JVs with third parties like Zomato, Swiggy, Uber eats, Dineout and Eazy diner etc. Renegotiating with our suppliers, landlords and key staff members also helped a lot.
Silver lining to the crisis situation
F&B, travel and hospitality are the first and probably the most effected industries in the world due to the Covid-19 pandemic. But when the pandemic is over and done with, we believe that these will also be the first industries to bounce back with vigour.
Recovery rate in the past few months
Quite understandably, our business recovery has been slow and gradual. Speaking in absolute terms, we are operating at 35% to 40% of pre pandemic sales for food and 15% for alcohol.
Challenges that remain
With new strains of the virus and widespread efficacy of vaccines still to be proven, an element of uncertainty still persists. We cannot rule out additional restrictions on businesses owing to fluctuations in the pandemic scenario. Hence it will be challenging to retain customer confidence and ensure staff continuity. Implementing new projects and cost/ price management will be the other priorities.
How much time will it take for the business to recover to pre-Covid levels?
In my opinion, it will be at least 2022 before we get there.
Is there going to be a new normal? What will it be like?
I foresee smaller and outdoor restaurants/bars having limited items on the menu. There are likely to be more “hot-prepped” items and “value-for-money” offerings. A higher degree of hygiene and social distancing will be the order rather than exception. Businesses are likely to shift upto 60 percent of their operations to online and delivery modes. Event based businesses will continue to struggle until complete normalcy returns. Lastly, we shouldn’t forget that the consumer will now be even more discerning towards the quality of food and its packaging.
