Coronavirus: what to do with inventory when your restaurant has to close down suddenly?

The measures to contain the effects of the coronavirus are drastic. Schools are closing, cultural institutions are shutting down, and events are being cancelled or postponed due to the COVID-19 outbreak.

In Belgium, France and many other European countries, restaurants and other hospitality businesses are forced to close down.

It is likely that food businesses in the UK and elsewhere will also have to endure a complete lockdown or severely restrict their activities.

Everyone is hoping for a quick solution, but the economic consequences for the sector will be severe nonetheless.

In most countries, pick-up and home deliveries are still allowed, but eating on the spot is no longer allowed. Also drive-ins are still possible. Hotels in Belgium may remain open until further notice, except for the restaurant area.

If you suddenly have to close the doors of your restaurant, you are faced with several major problems, one of which is: what with the freshly purchased products and the existing inventory?

We organised a quick brainstorming session among Apicbase colleagues to make an overview of possible solutions for the stock and possible ways to overcome this difficult period in a meaningful way.

What can the hospitality industry do during the corona closure?

Acute problem: what about fresh produce?

If there is space in your storage room or freezers, you want to process fresh products as quickly as possible into stockable items that can be frozen or have a long shelf life.

A few tips:

• Herbs can be dried or processed in oil and butter.
• With fruit and vegetables you can make delicious chutneys.
• Vegetable brining is hip and the process extends the shelf life enormously.
• Vegetables can be used in soups, stock and sauces or can be prepared as a sub-ingredient for other recipes.
• Meat and fish are more difficult, but if you have dishes on the menu such as stews, fish soups and the like, you can process and freeze the fresh products.
• It hurts but sometimes there’s nothing else to do but grind a good piece of meat into minced meat and freeze it.

How to free up space in stockrooms and freezers?

1. Sell your stock items directly to customers, like Butcher Coffee did.

Loyal customers are likely to support you in this way and possibly you reach new people via social media who can become loyal customers in the future.

2. Sell prepared portions from the freezer

Follow the FIFO principle (first in first out) and sell the oldest portions, sauces or sub-ingredients directly to customers.

This way, you make room to freeze freshly made products and customers can take something tasty from their favourite restaurant home with them.

3. Contact shelters and social assistance centres

Fresh produce is often not accepted but stockable items that are about to pass their expiration date are.

Your unused stock is used to assist people in need.

If there’s really no other way, and you have to refer products to the garbage can – to make room in your stock – start with things that have a low food cost and production cost. You can quickly replace a bag of frozen french fries; homemade stock is a lot more difficult to replace.

Maximize alternative sales channels

Home delivery is spared from corona measures. If you’ve ever wanted to experiment with a ghost kitchen, now is the time to explore that possibility.

It’s not ideal, but the corona situation gives you the opportunity to test and evaluate within your existing kitchen(s) a delivery focused production.

1. Home delivery

Organize your teams to take full advantage of this option. Promote home delivery via social media. Think of a special menu or exclusive dishes to make the most of this sales channel in the coming weeks.

Start your own home delivery system or use a third-party delivery service like Deliveroo.

Don’t forget a system like Deliverect to follow up incoming orders efficiently.

See if it is possible to use employees to carry out the deliveries.

2. Pickup at restaurant

If you do not have a home delivery system then it is an option to organize a pick-up at the restaurant. Re-arrange the unused dining-area to serve people who are picking up their orders quickly and efficiently.

3. Work with Too Good To Go

Stop food waste. Unsold dishes can easily be offered to the extensive network of the efficient app Too Good To Go.

Protect future income: use vouchers

Take an option on future success by offering vouchers. A voucher is an alternative revenue stream that allows you to generate income today and spread production over time.

Reward customers who support you by giving them something small to show your appreciation when they redeem their voucher. A free cup of coffee is often enough to make someone super happy.

Collaborate with your suppliers

Everybody’s in the same boat. And not only your immediate colleagues but also your suppliers. They, too, are affected by the corona-measures.

See if you can do something together. Suppliers also have products that need to be processed, would that possible at one of your kitchens?

In any case, no matter how crazy it sounds, this is the right time to connect with your suppliers.

Show them some love.

What if a mandatory closure is imminent but not yet effective?

If you are active in a country where restaurants are still open, but you fear a lockdown, you will want to work up everything you have in the house quickly.

Prepare yourself well.

These tips can help.

1. Sell extra portions to dine-in customers

Offer customers who have booked a table the opportunity to buy an extra portion to enjoy at home. They can take it with them straight away or pick it up at an agreed time.

This way you can divide the pressure on your own storage rooms over those of your customers. Plus, you generate extra income today.

Think of extra doggy bags or opt for a sustainable solution by encouraging customers to bring their own storage box.

2. Larger portions & doggy bags

Another option is to temporarily increase the portions. It will not benefit your food cost, but throwing away unused products won’t either.

A small surcharge to cover the costs is an option.

In any case, it is important to communicate to your customers very clearly what you are doing and why.

Bigger portions also mean that not everyone will be able to empty their plate. Make sure you have enough doggy-bags.

3. Review recipes

Grab your recipes and see if ingredients can be replaced by what you still have in stock. Again, be transparent about changes and let people know what you have done and why.

4. Do a promotion

Evident and efficient. Get extra customers in the short term by doing an interesting promotion. Customers will be delighted.

How to hit the ground running after the corona crisis?

The coming weeks will certainly be quiet in terms of sales. That doesn’t mean your hospitality business can’t come out stronger.

These are a few ideas to make the most of the slower days and to get out of the corona crisis at full strength:

• Organize training for your teams
• Do a full stock count
• Reorganize the inventory
• Recalculate your recipes and take a closer look at your sales history
• Take a closer look at the variance between actual and ideal costs and take measures
• Re-engineer your menus for maximum profitability
• Check and double-check the allergens in your ingredients and fine-tune communication.
• Evaluate your workflows and check up on the efficiency of your food cost management, allergen management, margin controls, stock management, supplier tracking and ordering systems.
• If you don’t already use kitchen management software, now’s a good time to explore this option and see if F&B software is the right tool for you.

Good luck and take good care of each other!