Feeding a dream: the struggles of opening a new F&B business

When Lumo first opened in the first week of March, it was drawing in crowds thanks to its smoky plates of wood-fired meats and cocktails inspired by breakfast dishes. “The initial response was great,” shares owner Alex Chok. 

But in less than two weeks, the number of diners visiting this Carpenter Street hotspot dwindled. Shortly after, the government announced the closure of all entertainment venues, including bars and clubs and the flow of customers stopped altogether. Now, with the latest ‘circuit breaker’ measures in place, Lumo only provides takeaway. 

“There is no one out and about,” says Alex. “You can literally hear a pin drop.” 

What used to be a vibrant local food scene has since been overshadowed with dread and uncertainty – especially for F&B businesses that depend heavily on foot traffic. “Our sales are down significantly,” he says. “This is our first foray into F&B. Opening right in the middle of an outbreak is truly a baptism by fire.” 

Delivery woes 

Lumo is just one of many nascent F&B businesses that have to deal with the compounded issues brought about by the current situation. The already challenging task of opening a restaurant or eatery is now even tougher. 

Sugartree Gelato opened barely a month ago in Kovan. While the residents in the area were initially excited for a new ice cream parlour in the neighbourhood, co-founder Jessica Chin soon found herself with fewer guests than anticipated.

“Movement restrictions make it harder for our products to reach each customer,” she says. “Business isn’t as brisk as we had expected.” 

"I don’t think there’s any difficulty in getting listed [on delivery platforms] as they seem to accept just about everyone. It’s getting on fast enough that’s the issue."

Many, like Sugartree Gelato, have been forced to quickly pivot and offer delivery services in order to reach the stay-home diners. But even then, getting onto these delivery platforms might not be all that beneficial. 

Alex feels that delivery services could diminish the dining experience, and are “not the most ideal as food quality might be compromised when it reaches the customer.” 

Others, like two-month-old restaurant Slate, decided to shutter temporarily during this period. “We started the application in late February… but I reckon due to the influx of other F&B players, we couldn’t get anyone to help us settle administrative issues like setting up and implementing the service,” says founder Adrian Yeo. “Because of that, we couldn’t launch our delivery platform for our guests.”

Co-owner of Grain Alley, Loh Qing Yu, agrees. Her café serves Mediterranean-inspired dishes and opened earlier this February at Orchard Central. “I don’t think there’s any difficulty in getting listed [on delivery platforms] as they seem to accept just about everyone. It’s getting on fast enough that’s the issue,” shares Qing Yu. “There also appears to be insufficient riders to deliver the orders fast enough.”

"Being on those platforms would have cut our margins by some 30 percent."

Cost also plays a big role in deciding whether or not a restaurant should offer delivery. Adrian shares that most delivery services cover only a limited area, and Slate is located further away from populated neighbourhoods. “If you take the percentage of orders against the overheads that you incur to remain open for takeaways and deliveries, it just doesn’t add up,” he says. 

Most delivery platforms also take a sizeable cut from each order. According to the Restaurant Association of Singapore (RAS), commission rates range from 25 to 32 percent. This was the main reason why Joy Chiam, who co-owns Pâtisserie CLÉ, decided to work with a private driver instead. “Many people are now opting for delivery through various platforms. But being on those platforms would have cut our margins by some 30 percent,” she says. 

“That’s a lot for a small operation that is just starting out.”

Hitting pause

Even industry veterans aren’t spared. 

Rishi Naleendra, the chef behind Cloudstreet and Michelin-starred Cheek Bistro, had to delay the opening of his upcoming Sri Lankan restaurant, Kotuwa. The project, which was slated to open in mid-April, is now on hold for three months. 

“I initially thought that Kotuwa would be the dream restaurant opening – we had everything planned and sufficient time to execute it. Everything was on track,” shares Rishi.

While Kotuwa couldn’t officially open its physical space, the chef-owner has decided to ‘debut’ the restaurant by providing a takeaway and delivery menu instead. Rishi now works out of Cloudstreet, filling the kitchen of the fine-dining establishment with bubbling pots of curries. 

“Doing Kotuwa from Cloudstreet felt like opening a new restaurant,” says Rishi. More than just making tweaks to the kitchen to ensure a smoother workflow, Kotuwa’s original menu had to be adapted as well to ensure that the food travels well. He adds: “It’s a prelude to what’s in store when we do officially open.”

“Unfortunately, we had already signed our tenancy agreement and rent started to kick in all about the same time as the outbreak began.”

Carlos Couto, the co-founder of upcoming Portuguese restaurant Tuga, also had to put a pin in his plans. The Taiwan-based brand had initially planned to soft-launch in late April at its Dempsey Hill location. “But now we have to wait and see,” he says. 

Delaying the opening of the restaurant would have helped, except that it isn’t possible. “Unfortunately, we had already signed our tenancy agreement and rent started to kick in all about the same time as the outbreak began,” Carlos shares.

Like many others, the restaurant is currently exploring takeaway options. But it remains a huge challenge for establishments like Tuga to distill the full dining experience into containers and carrier bags. “We had planned for Tuga as a unique gastronomic and sensorial experience,” says Carlos. These intangible ingredients cannot be delivered. “We were excited to share all of this with our future customers, so postponing hits us especially hard,” he adds. 

Adapting to change

The situation has, however, inspired creative solutions. To attract more business, the team from Grain Alley moved its portable draught beer dispenser out from the bar to its outdoor area in full view of passers-by – a reminder to people that they can grab a cold pint to-go.

Recently, the café also started selling groceries and other fresh produce after hearing customers complain about long queues and empty shelves at the supermarkets. “When we heard that, we decided to open our supplies for customers to purchase,” shares Qing Yu.

Slate is also planning to use this downtime to embark on a series of home projects, some of which include releasing videos on how to concoct homemade cocktails and simple baking recipes.

“I think as a chef, you go through a lot to get to where you are. But this is something I never thought I’d experience in my lifetime."

Most are also seeing the situation as a learning opportunity – to grow and bounce back even stronger. “I think as a chef, you go through a lot to get to where you are. But this is something I never thought I’d experience in my lifetime. It has been stressful, but we’ve taken this challenge as a team – and we’ve adapted and changed,” says Rishi. 

“I think this will be one of the strongest memories for me, and a lesson I’ll carry with me for the longest time.” 

Uncertain times ahead

Many remain cautious about the future. 

Anecdotally, Qing Yu shares that about half of her friends in the trade have plans to shutter – either temporarily or permanently – within the next three months. Existing measures and stimulus packages by the government might be helpful for some, but it still not enough to weather through “these extraordinary times”.

“New establishments do not have as big of a fan base yet, and so the comeback will be slower.”

Even if social distancing measures do get lifted and things gradually return to normal, new F&B businesses need a longer time to recoup and recover. “More well-established places have a following. People will rush to go back as soon as the ‘circuit breaker’ is lifted,” explains Adrian. “New establishments do not have as big of a fan base yet, and so the comeback will be slower.” 

Alex shares that while Lumo’s initial decision was not to do takeaways and deliveries, the restaurant needed to change its plans. “We let go of the things we cannot control and we adapt to survive,” he says.

“I have a team of eight and their livelihoods depend on the survival of this establishment. I think this is enough reason to keep going.”