2023 — Another Year Of Uncertainty For F&B?

F&B industry 2023

The food and beverage (F&B) industry has been through the wars as a result of COVID-19 measures, but is showing signs of recovery. Anil Goswami, Founder of Al Capone’s Group of Companies, KF Seetoh, founder of Makansutra, Thomas Choong, Co-founder and CEO of Xi Yan Group and Loh Lik Peng, Director of Hotel 1929 scan the horizon for opportunities.

Coming out of a pandemic, and into a series of challenging global and local situations — logistics issues, inflation, rising costs, workforce evaluation, disruptive technologies, clouded judgement etc. etc. — how will 2023 shape up?

STORM-ASIA talks to industry players about their observations and approach to the new year. The interviews will be featured over the month of December.

Anil Goswami
Anil Goswami, Founder & Owner, Al Capone’s Group of Cos.

Negotiate And Grow

COVID-19 might still be in the air but we at Al Capone’s continue to attempt to provide jobs and build our brand.

Case in point is the fact that we opened six new outlets during the two uncertain COVID-19 years — 2020 and 2021.

Problems might always arise, if there is another nationwide shutdown. 

But the F&B industry has become a clear lifestyle choice of Singaporeans, and is vital for those who find they need to unwind, celebrate or just meet up with friends. That is certainly the case, after the restrictions imposed during the circuit breaker period.

As a business, it’s all about negotiating and tipping the economies of scale in our favour and offering value for money to our customers.

KF Seetoh, Makansutra
KF Seetoh, Founder, Makansutra

To Boldly Go…

Manpower woes and the mysterious reasons for the tightening of foreign worker supply continue to plague the food industry.

It doesn’t help that the new generation — the Zillenials — view the post COVID-19 era as the new normal.

The key opportunity is the need and boldness to reinvent business models to suit this “new think” and resulting expectations. 

Business folks and thinking of yore will have to be discarded, with new models built to stay relevant.

Thomas Choong
Thomas Choong, Co-founder and CEO of Xi Yan Group

Exercising Cautious Optimism

The impact of COVID and various international trade and geo-political issues have certainly permeated through many industries, and the F&B industry is certainly not spared.

The Xi Yan Group of restaurants has been negatively affected by shortages and rising costs of food supplies, equipment, consumables and manpower.  We also see energy costs and rental costs going up in tandem.

During COVID-19, some restaurants were adversely affected and  had to close down. But many new ones have also started this year.

The consolidation of industry players has given rise to opportunities for some who have remained and also new entrants.

The uncertainties due to global geo-politics, interest rates rises, and financial market and inflation situations will continue to be a concern as their impact will be felt in varying degrees by different industries. We expect the uncertainties to continue well into 2024.

New opportunities that arise, the reopening of the economy and the stability of Singapore and the ASEAN group would help reduce some of the adverse effects and would be a tourism draw, which is good for the the hospitality and F&B industry. 

The increasingly challenging operating environment for the F&B industry will continue to cap the upside potential, and may even exacerbate any negative effects. Lots of care will have to be exercised in any expansion even where opportunities present themselves.

Loh Lik Peng
Loh Lik Peng
Director, Hotel 1929 Pte Ltd

The China Syndrome

I am sitting on the fence for next year. Preparing for the worst but also hoping for the best. 

The world is wracked by problems and risk is everywhere right now. With sky-high inflation affecting the cost of virtually everything and interest rates so high it’s likely that consumers are really going to feel the pain next year. 

At the same time, for travel and hospitality, I think the very strong USD will mean that Americans will travel in big numbers and spend when they do, and this should have good spillover effects for any sector that has exposure to the American outbound market. 

With China announcing the easing of its quarantine measures next month, even if their outbound numbers only partially recover it will cause a big spike in travel demand.

Pre-COVID-19 China was the largest outbound market in the world. This twin demand drivers have the potential to make 2023 very strong indeed…if things line up properly.

See also  Key Opportunities and Challenges in 2023

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