As nearly 40 per cent of Canada’s workforce moves from in-office to remote work, the impact on members of the foodservice and hospitality industries has been severe—and diverse. It has devastated some, driven up profit for others, and inspired creation across the board.
In urban centres, restaurants like that run by executive chef Youngkyo Kim at Delta Hotels by Marriott, have either closed down or adjusted their schedules to meet the needs of a population choosing to lunch in and dinner out.
Kim’s restaurant has been closed since the onset of COVID-19, and as the chef himself suggests, there’s a palpable shift in food hospitality. “The industry is now focusing on the delivery system and take-out concept which is more convenient for the remote worker.” Kim points to the fact that numerous restaurants in urban centres have closed their doors temporarily and let go of front-facing staff.
At the peak of the pandemic, nearly 800,000 foodservice workers were laid off or had their hours reduced to zero. A more recent survey by Restaurants Canada found that roughly half of table-service restaurants expect to further reduce their number of full and part-time employees over the next three to four months.
Nicole Gallace, founder of FoodGrads, an organization that connects recent graduates with prospective employers across the food and beverage industry, suggests that the survival of many restaurants has depended on how quickly they rose to meet the new norm. Gallace points to Lazy Daisy’s Cafe in Toronto as an example of how one local business moved swiftly to flourish under the current climate. Gallace recalls how early on into the pandemic the cafe pivoted quickly to become a general store, offering basic items such as milk, sugar, and flour, while continuing to make hot food and meeting the expectations of loyal customers.
Canadian hotels struggle to make ends meet
While stories like Lazy Daisy’s paint a rosy picture for local businesses, a story like that is the exception, not the norm. For members of the hospitality industry (and their F&B service providers), a temporary end to work travel plus restrictions on personal movement has left hotels struggling to make ends meet.
According to Marjolaine De Sa, CEO of the L’Association hôtelière de la région de Québec, the Chateau Frontenac, a 5-star 610 room hotel in Quebec City which pays nearly 6 million dollars in municipal taxes (roughly $16,000 per day) per year is currently is down to around three one-night bookings per week. With Quebec on lockdown, and large gatherings cancelled indefinitely (virtual holiday party anyone?), tourism is taking a major hit. After all, asks De Sa, who’s going to plan a visit to Quebec when they can’t find something to eat—or do?
The numbers alone speak volumes. 60 per cent of the association’s 224 members are currently unable to pay their municipal tax, and without some kind of relief, they may be closing their doors forever. Considering that 95 per cent of the association’s members are independently owned, there won’t be any corporate dollars coming in to rescue them at the last minute. Consequently, 75 per cent of employees who work within the hospitality industry, which employs around 42,000 employees throughout the province, have been permanently terminated or put on social assistance.
It’s the same story in all major cities across the country, says Tony Elenis, President and CEO of The Ontario Restaurant Hotel & Motel Association (ORHMA). “It started with a health crisis, it moved to a health crisis, and as of late it’s become an emotional crisis,” Elenis suggests that ORHMA members are worse off now than they were in March.
Foodservice is down, food processing is up—way up
While hotels and restaurants continue to bear the brunt of change in work trends and restrictions, some businesses are flourishing amidst the global pandemic.
“Across the board, food processing is hiring,” says Nicole Gallace, pointing to companies like Campbell’s Soup, who reported an 18 per cent increase in net sales year over year, and Dr. Oetker who saw 12.3 per cent growth this year. Gallace suggests that consumers are reverting to tried and tested comfort foods to ease the pain of a population forced to do more food preparation in-house.
Meal-kit delivery services also experienced a record year, with HelloFresh announcing a 92 per cent increase in sales from last year. Canadian grocers like Loblaw Companies Ltd, however, experienced increased profits during the first quarter – $42 million to be exact – before things gradually levelled out. As of April, the company also incurred around $90 million in pandemic-related incremental costs.
When one door closes, another one opens…
The shift in work trend has spurred creativity and encouraged existing businesses to find alternative ways to survive.
A release from Mintel shows that nearly 37 per cent of Canadians were shopping more online, a trend which forces grocers and others within F&B to look closely at their online offering. The shift to digital due to COVID-19 has also propelled members of many industries to find alternative ways in which to stay in operation. For some, including the Art Gallery of Hamilton, the rapid move to online programs, thought to be temporary, is now likely to become permanent.
Christi Marks, Director of People and Operations at the AGH, spoke about how the gallery has transitioned from educational programs that saw more than 10,000 school-aged children come through the building each year to setting up virtual gallery visits with the help of artist-educators. This summer, the gallery was forced to forego in-person camps, and instead mailed out boxes of supplies to eager students who would follow along with a live instructor and pre-recorded sessions from the comfort of their own home. When asked if these were short-term initiatives, Marks said that the gallery will be happy to start up its in-person programs but will definitely be maintaining its newly cultivated digital presence.
At the outset of the pandemic, the AGH had to let go many of its front-line staff including visitor services, retail, and building. Since the gallery reopened in July, nearly 95 per cent of the gallery’s own employees have been working from home. While remote work wasn’t part of their culture before, they’ve realized that many jobs are able to be done effectively outside the workspace.
Finding the middle ground
Restaurant owners and hoteliers may be waiting for the day things return to normal, Ryna Young, Vice President of Executive Search at Optimum Talent suggests that this particular trend is here to stay, proposing a blended model of online and in-office expectations across the board. And while many employees still crave a sense of community (according to one poll, 40 per cent of Americans are eager to return to the office), once the work-from-home genie is out of the bottle, there is, perhaps, no going back.
But ingenious restaurants and food shops have pivoted, or rebuilt their businesses around takeout and delivery, implementing concepts like ghost kitchens and even restaurant-food subscription programs. These pivots are also likely here to stay post-pandemic.
Young also suggests that how people hire is changing just as much as the job descriptions themselves. “The traditional hiring technique and hiring spaces are not necessarily where people are going to go.” According to Young, following layoffs across multiple industries, employers are going to see an increase of older applicants looking to work within industries that used to be dominated by college students and applicants looking for flexible work as part of the gig economy. Young encourages organizations to put together programs where they can lean on those new resources.