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COVID-19 Has Accelerated Digitalisation in the F&B Industry: How will This Help Overcome the Challenges Faced?

When Malaysia first took notice of the COVID-19 pandemic, not many businesses in the country were prepared to strap themselves for unprecedented times. The first nationwide lockdown declared in March 2020 subsequently became the first step to a challenging journey for F&B businesses.

Since then, many businesses have stayed resilient and adapted by finding new methods to stay afloat during this period, realising that digitalisation is one of the only options to sustain their business. This is also evident in the local F&B industry, with a report by Flanders Investment and Trade indicating that the pandemic has triggered Malaysian F&B retailers, such as food suppliers, supermarkets and restaurants being seen to shift their operations and embrace digital marketplaces.

Challenges Faced by the F&B industry
When the lockdown was first declared, the F&B industry faced its own unique set of challenges. In an ecosystem where business deals were traditionally carried out physically, the food supply chain was severely disrupted due to restricted operation hours, logistical difficulties, and communication hurdles with suppliers, buyers, and end-consumers. This is also in addition to the challenge suppliers face in reaching out to retailers, and vice versa.

For example, on one end of the food supply chain, several farmers in Cameron Highlands were forced to give away their farm produce due to the perishable nature of the produce, whereas, on the other hand, buyers were flocking onto online marketplaces, only to find limited options available for their choosing. This is a clear reflection that the pandemic has affected the mode of communication, even between buyers and suppliers thus impacting the source of revenue for all parties within the industry.

The Emergence of Digital Solutions for the F&B Industry
The shift in communication habits have also forced F&B businesses to pivot and adopt to digital solutions to sustain and identify new revenue streams for their business operations. Adopting to digital space has given businesses an increased interest into digital marketplace, which allows them to connect with businesses within the F&B industry. For instance, Saladplate, an online marketplace, was launched to bridge the gap between suppliers and buyers, making it easy to discover new products and services digitally, through an innovative sourcing solution.

Okinawa Trading, a Japanese company that specialises in exporting fresh meat to countries in East Asia and Southeast Asia, is one of the brands that has embarked on a digital transformation journey using Saladplate’s solution. Having onboarded Saladplate during a promotion with the Japan External Trade Organization (JETRO), Okinawa Trading has seen an increase in inquiries from buyers, opening doors to more business opportunities. Furthermore, since joining Saladplate, the number of website visitors on Okinama Trading’s page saw an inspiring 414% increase, with buyers spending an average of three minutes on the page.

Another example of a digital F&B platform would be Food Market Hub, a procurement and inventory system for F&B businesses. Food Market Hub streamlines all operational data from procurement to inventory and eventually into the accounting systems. It then churns the data and consolidates the cost of goods sold, ultimately allowing F&B business owners to make smarter decisions for their business.

Din Tai Fung, an upscale Taiwanese restaurant chain, are among the businesses that have successfully adopted the platform. The brand has seen a 31% increase in year-on-year growth result in 2020 through the platform, which has helped streamline communications between the central kitchens and outlets, enabling it to weather through the pandemic. These success stories are just the many examples why both F&B suppliers and buyers should embrace digitalisation to stay afloat, build resilience and regain normalcy in this new digital age.

With many more digital solutions and guides to digitising made available, F&B businesses can use it to their advantage to adapt this new normal, while looking at other possibilities for growth. Previous challenges such as communication hurdles, low sales volume and mismanagement of inventory and expenditure can be resolved, thus enabling these businesses to remain resilient and scalable even during these tough times. Platforms such as Food Market Hub and Saladplate, or a combination of both, albeit temporarily, would be beneficial, cost-efficient and would potentially help bridge the communication currently faced by both buyers and suppliers in the F&B industry.

Digitalisation is Paving a New Future for the F&B Industry
As digitalisation becomes a key fixture during this new normal, the digital transformation journey for businesses is expected to continue even in a post-COVID world. A report by Bain & Company indicates that COVID-19 has rewritten the rules of survival for businesses. Online purchasing, digital consumption and average online basket size have risen substantially and will continue to grow at record-setting rates, providing an opportunity for traditional businesses, large marketplaces, and disruptive business models to thrive. The report also indicated that around 83% of online buyers share that they are likely to continue their increased spending online even after lockdown restrictions are lifted.


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