Post-Covid Food & Beverage: Innovating and going back to your roots

Milano, 15 June 2020
For some it is just a way of saying, some vaguely hope so and others firmly believe it. But in some industries “We’ll end up being better” is strict necessity and can become a strategic direction. Among those industries is Food & Beverage, one of the most impacted by the Covid-19 pandemic, even though with different results: on the one hand, agribusiness never stopped, and it has indeed stepped up efforts; on the other, the catering business is just stepping out a three-month total lockdown (perhaps the worst paralysis ever).

In the food sector, “end up being better” naturally implies rethinking how good what you produce, sell, serve and consume is. A milestone whence the sector should and can start all over again. A milestone that is Vittoria Veronesi‘s point, too. Vittoria is SDA Bocconi’s Master of Management in Food and Beverage (MFB) Director, and we spoke with her about present strategic assets and possible recovery directions for firms in the industry.

What is such a harsh experience teaching the F&B world?

In one word, it reminds us we need to go back to the origins. Here it is not just metaphorical language: we need to value product traceability, understand where food comes from and what its production process is. The health crisis broadens the idea of good/quality food to include, besides organoleptic properties and taste, how healthy what we eat and drink is. The product needs not only be “good” for the final consumer but for everybody in the supply chain as well, distribution included. When you think how important the supply chain is, you also want to be supportive to smaller farmers, respect land workers, value simple and seasonal products. Farmers are themselves finding different ways to join forces, form a “critical mass” and reach out to consumers beyond logistics and distribution hardships. They are sending us a reassuring message: we will always be there.

It is not merely food ending up in your plate…

We can certainly speak of an “enhanced” product, whose value is not purely in material traits. Purchase motivation also embraces service (from home delivery to cooking and serving suggestions), the environmental sustainability of production processes, packaging and logistics (being well aware that the time of green-washing is over); the history and narrative of products; and safety, of course. These aspects cannot be considered ancillary anymore. Quite the opposite, they are the ones that make food products different in the consumer’s eye so that these products can stand out among competitors, perhaps even move to a higher market segment (as for an Apulian EVO oil that the producer managed to work into excellence exactly in the Italian region that is home to this kind of product). Of course, all of this attention to nutrition and food comes in times when changes in everyday life have allowed people to take greater care of these aspects of their life. But I think it is going to last.

What is coming next?

That is no easy question, since we have no precedents. In the catering business, I think recovery will be driven by the fact that people want to meet friends and have fun again after these gloomy days; but special attention to safety is an absolute need. My impression is this is going to be the critical factor for customer preference, especially in the upper-intermediate segment. In a way, I believe we should think of catering activities, and social behavior in general, as pre- and post-Covid, pretty much the same as 9/11 has been for travelling. Generally speaking, customers will be more and more careful about authenticity and consistency from producers/retailers/restaurants, and consequences for those who will not meet expected standards will be “fast and furious”. No more time for joking.

In such a traditional business as catering tends to be, especially for small to medium firms, will they be able to innovate to tackle the crisis?

Due to safety regulations, on the short term all restaurants will face higher costs and lower income (think of the number of seats shrinking because of social distancing). This means restructuring the business (multiplying kitchen shifts, for example), and especially implementing savings that do not undermine quality, for example rediscovering food seasonality or humble/discarded ingredients. This doesn’t mean overlooking food presentation and service, of course. I think good, good-looking and well done are always key to success. Now more than ever. And in my opinion, it is more about rediscovering than innovating.

What does a post-Covid Food & Beverage manager need to be, and how can training support this evolution?

One distinctive feature is certainly taking pride in working in an industry that has proved a pillar during these hard times for our country; also, rediscovering food as a cultural value, as a means and a way to share something beyond mere nutrition. Plus, a manager in F&B (as in other industries) has to be flexible and resilient, which is crucial to overcoming a crisis and end up being stronger, better. This has always been a focus for us in the MFB, and will be even more so, together with other specific skills, which are key but often overlooked in F&B: analytic and quantitative skills, since data are increasingly important in a manager’s decision-making process; intertwined horizontal and vertical knowledge, for the sector is made up of numerous sub-industries (there are huge differences between F&B manufacturing companies, F&B retailers, restaurants, catering services and hospitality, not to speak about the F&B categories – dries-fresh-frozen products or wine-coffee-soft drinks). Our Master’s provides both kinds of competences, general management ones and sub-industry specific ones, which are also useful for participants to make their professional choice. Absorbing ideas and inputs from different fields is good training for lateral thinking as well, which is another essential managerial quality, even more so when the F&B world increasingly needs to find a balance between innovation and going back to its roots.

SDA Bocconi School of Management