Asia Pacific Update: February 18
In today’s edition
In today’s edition, we explore how food and beverage markets in Asia Pacific are tackling 2021. In deeper insights, Weber Shandwick MENAT’s CEO outlines four focus areas for businesses to leverage over the coming year.
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Recovery Spotlight: Food & Beverage
With Asia Pacific remaining in a state of flux, the Food and Beverage (F&B) sector is facing the prospect of reconfiguration. Customised food and recreating the restaurant experience at home will continue to remain attractive. With food delivery growing in popularity, there have been calls for the reduction of commission fees charged by delivery platforms to help F&B outlets cope.
Subdued Lunar New Year festivities and sectoral uncertainties
With restaurant closures across Asia, Australia‘s lobster and abalone producers continue to face depressed demand. Ranchers hope that, as celebrations remain at home, people will cook festive delicacies, driving demand. Beyond China, the industry is looking to Japan, Taiwan, Hong Kong and Singapore.
The Tet holiday typically generates additional income for Vietnam’s F&B sector. However, this year, restaurants in Ho Chi Minh City were closed following an outbreak in the city’s airport. Restauranteurs put away chairs, tables, and festive decorations in line with government directives calling for closure of non-essential businesses. In Singapore, restaurants failed to receive a boost during the Lunar New Year due to restrictions on group dining and foreign labour shortage, despite residents remaining in town this festive season.
In Indonesia, the government introduced ‘micro lockdowns’ limiting the restaurant diner numbers to 50 people per institution. This measure is designed to minimise the impact of the pandemic on the country’s economy.
Confidence in Hong Kong SAR’s restaurants has fallen amid the pandemic, with customers ranking their satisfaction 5.8 out of 10 in overall business performance in H2 2020, according to a recent delivery platform survey. The forecast remains gloomy in 2021, with 86% of restauranteurs sharing they were pessimistic about the sector, and nearly 1 in 3 respondents planning to lay off staff moving forward. Food delivery continues to be popular with 37% of restaurants experiencing a year-on-year increase in order out dining.
Thailand’s Centre for Covid-19 Situation Administration has given the green light for restaurants in Bangkok to serve alcohol and play live music until 9pm.While a relief for the F&B sector, such a time is earlier than the 11pm requested by venues. The president of the Thai Alcohol Beverage Business Association predicted that, if alcohol sales continue to be banned until April, THB90 billion (US$3 billion) in revenue could be lost.
Restaurants in Japan experienced a 15.1% drop in sales in 2020, the steepest year-on-year decline since 1994. With dining out singled out as the biggest source of infections, eateries in regions under the country’s state of emergency have been urged to close by 8pm. Due to the voluntary nature of Japan’s pandemic strategy, the government is handing out 1.8 million yen (US$17,119) a month for stores that comply. Restaurants are also toying with mokushoku (silent eating) and tanshoku (short meals) to reduce the spread of the virus.
Diversifying out of the doldrums
Recognising that the F&B environment continues to be challenging, a Singapore restaurant group has expanded into the country’s local hawker scene to diversify its business. The group highlighted that the foray into hawker food will enable it to reach the local mass segment at reduced cost to the business, complementing its current strategy of selling retail products on e-commerce platforms.
Currently under a national movement control order, Malaysia‘s consumers have taken to drive-in dining, which enables diners to enjoy restaurant meals in the safety of their cars. Pioneered in Cyberjaya, restaurants serve meals on a tray that fits in the space between driver seat and steering wheel, similar to in-flight meals.
The largest component of spending habits in the Philippines, food consumption, particularly in fast food restaurants, remains subdued as movement restrictions on children persist. In the Philippines, a multinational fast food provider has joined the private-sector campaign to support the government’s vaccine distribution programme. The company’s market president shared that the company had purchased vaccines for both their employees and for donation to the government.
Japan has experienced a meat grilling boom, with yakiniku restaurant growth in 2020 accompanied by historically low number of insolvencies. This is attributed to the ventilation at such eateries, with the air inside a yakiniku restaurant circulating approximately six times more than in standard eateries – making the pandemic practice of recreating the experience at home exceptionally difficult.
Ahead of Korea Disease Control and Prevention Agency’s announcement of the national vaccine roll out on 26 February, social restrictions have been reduced: The 9pm curfew for restaurants and cafes has been extended to 10pm and bars and nightclubs have been allowed to reopen with limited patrons. The Ministry of Health and Welfare shared that these measures have been rolled out to ease the struggle of SMEs.
In Australia, the Adelaide Economic Development Agency is enticing the city’s residents to make their way back into the city with AU$30 (US$23.35) “long lunch” vouchers awarded via lucky draw. This is part of a larger AU$150,000 (US$116,764.50) economic stimulus package to help hospitality and tourism businesses recover from the pandemic.
Methodology
Media analysis of stories covering Australia, Cambodia, Hong Kong SAR, Japan, Malaysia, Macau SAR, New Zealand, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam from 18 January to 18 February 2021.
This briefing was prepared by the Weber Shandwick Insight and Intelligence team in Singapore. If you feel a specialised briefing and analysis bulletin could benefit your team, please get in touch: enquiryapac@webershandwick.com.
Deeper Insights
“First, ‘employee experience’ will be a key theme for organisations in 2021 and beyond. The pandemic put both leadership and employees through a tough test, and opened the eyes of companies to the importance of building resilience. Wellbeing, mental health, and social connectivity to fight isolation are all companions on this road, as is the ability to authentically inspire employees.”
In a roundtable discussion with fellow business leaders for BrandBerries, Weber Shandwick MENAT CEO Ziad Hasbani outlines four key realities for businesses to address and leverage in 2021 strategising.
About COVID-19 Recovery Report:
- The content of this news bulletin is a summary of publicly available news articles on events and developments related to COVID-19.
- The views and opinions reflected by these headlines do not necessarily represent those of Weber Shandwick.