Staying Connected - With Bars And Restaurants Locked Down, Can Innovation Sustain Drinks And Food Sector Entrepreneurs?

George Frost is looking forward to what he calls the “glorious uplift” - the moment when Britons are once again free to gather in bars and restaurants.  

The problem is that none one really knows when that moment will occur. When Prime Minister Boris Johnson revealed his government’s roadmap for easing the U.K. out of lockdown, he held out the prospect of some cafes and restaurants being allowed to open from July, depending on whether or not the Covid-19 outbreak is sufficiently under control bythen. No specific date was given for the reopening of bars and restaurants  - but again, it’s been made clear that any relaxation of the current lockdown rules will be dependent on circumstances. 

And that has huge implications not only for the hospitality industry itself but also for the drinks and food producers who make up much of the supply chain. This a sector where there is a huge amount of entrepreneurial activity. So what does the future hold?  

Long-Term Prospects

Frost - a drinks entrepreneur who founded his premium Rum Company, The Duppy Share in 2014  - is optimistic about the longer-term prospects for his industry. The relaxation of the lockdown will, he believes spark a resurgence of demand. 

“There has been a lot of talk about cultural change,” he says. “But people will go back to bars. We are social creatures and we are creatures of habit. Bars will flourish.”  

Present Day Reality

But there is a present-day reality to consider. The UK hospitality industry employs more than three million people. According to Office for National Statistics figures, companies working in the sector have put 80 percent of their workers onto a  furlough scheme paid for by government. The challenge now is to make sure that as many businesses as possible survive the crisis and bring their workers out of furlough. Meanwhile, the broader food and drinks production market  - responsible for 17 percent of U.K. GDP - has probably been less badly hit. But even in this sector, the lockdown of bars, restaurants and cafes has dampened demand for certain products. 

Not least rum. Although less than a decade old, The Duppy Share has made real progress in a competitive drinks market. In 2018/2019 it sold 80,000 bottles of its blend of Barbadian and Jamaican rum and positioned itself as the number one player in the premium category for that drink, according to an analysis of British sales by analyst IWSR. 

Now, with the company looking out onto a landscape of shuttered bars, Frost believes the short term future for his industry depends on the ability and willingness of individual companies to flex, innovate and work together with partners. 

Three Channels    

As he explains, as a rum producer, the company normally has three channels to market, namely bars and restaurants, off-license sales and direct to the consumer. Two of these routes remain open. But as the business positions for the future, the challenge is to maintain strong engagement with its trade customers and the drinking customers.    

So in its own way, The Duppy Share has begun to tailor its offer for the times. Or to put it another way, it has begun to pivot. The first manifestation of this is the sale of  “rum kits” online,  consisting of mixers, metal cups and a 20 cl bottle of rum.    

In addition, the company is preparing a cocktail kit in partnership the Rum Kitchen chain of bars and restaurants. It’s a move that underlines the company’s commitment to stay close to trade customers during the crisis.   

“It’s bars like the Rum Kitchen that I really feel for in this crisis,” frost says. “The owners put their blood sweat and tears into their businesses and now there are 2.3 million people furloughed.”

Bar Tabs   

And the company is attempting to do something to help out the bars that make up much of its customer base. For instance, it is buying “bar tabs” that will be redeemable in venues such as Trailer Happiness. These are being auctioned on Instagram in an initiative that should see winners going to the bars in question and supporting them, once the lockdown comes to an end.   

In Frost’s view, the whole industry is innovating. He cites the example of restaurants that have morphed into takeaways or offered food for delivery. Others are supplying food to key workers. Initiatives like these are helping to keep the industry alive in preparation for the return of normality.

But are these really lifelines, or are they really providing a means for food, drink and hospitality entrepreneurs to stay active during the crisis? Perhaps only to reassure themselves that they are doing something.  

Does Flexing Work?

Well, there is some evidence that flexing is producing results. For instance, this week, SME lender, Startup Loans, issued a statement highlighting the work of small food companies and cafes that had successfully adapted to the crisis. These included  Healthy Nibbles, which has flexed from supplying snacks to offices and now provides the same service to remote workers, and Melt, an Aberdeen based cheese company that has stepped up deliveries while also producing home baking videos. The key in both cases has been to stay connected with customers while maintaining sales. 

 "We recognise that during these times of unprecedented uncertainty small businesses across the UK are facing significant challenges. However, amidst the uncertainty, we are hearing incredible stories of small businesses finding new ways to survive and even thrive," said Startup Loans Managing Director, Richard Bearman.    

 Frost is doubtless right to say that consumes are looking forward to returning to their favorite watering holes but the post-Covid-19  universe will probably look and feel different. An industry that is based on the joy of socializing is likely to face a more cautious base of consumers, at least in the short term. Bars that rely on being full most evenings to pay their staff, rent and local taxes, will have to cope with social distancing laws. Some establishments won’t survive. But in the meantime, Frost says the industry is doing its best to innovate.