- How the food industry is catering with shortages this season
Sri Lanka is in the grip of a runaway economic crisis that has led to shortages of food in the country, queuing for food or buying at extortionate prices on the black market: That’s the choice many Sri Lankans are facing. The Government has also asked people to use fuel sparingly and warned that it could be rationed. These tactless decisions have run several businesses in the hospitality and food industry almost to the ground, where businesses are constantly trying to keep up with the lack of ingredients, and now even the lack of fuel, affecting delivery – not to mention the power outages – especially during such a seasonal time of the year.
Brunch spoke to a few restaurants and bakers to find out how they’ve been faring this season.
Doing business in Sri Lanka right now is like going to war
Crêpe Runner CEO/Founder Abdus Salaam
We had a chat with the Chief Executive Officer (CEO) and Founder of Crêpe Runner on the topic of how they’ve stayed afloat with all these shortages recently, to which he immediately quipped that running a business in the food industry these days is like heading off to war.
He commented that while Covid-19 has been an immense learning curve for them, with obstacles comes the resilient strategies to counter-attack the situation and sustain the business. They have been on the tough road ever since starting up Crêpe Runner in 2019 with a small food truck stationed down Marine Drive selling crêpes.
“The Easter attacks’ aftermath destroyed businesses and their confidence, where businesses were doomed for a month as people were afraid to step out. Since then, we have always been proactive in making decisions to face such situations and made sure the business operates without any blockage,” he explained.
He also informed us that Covid-19 was the period where they initiated whatever they planned ahead and things fell into place, such as supply chain management, greater emphasis on health and safety, accelerated migration from in-store sales to online sales, restaurant design changes, and human resource management.
Nevertheless, he commented that with regard to the current conditions prevailing in Sri Lanka, especially for small and medium-sized enterprises (SMEs), it’s like doing business in a war zone with endless casualties and damages. He added: “It’s very tough and we understand that we are in a crisis.”
When talking about the hike in prices of even basic necessities, he stated that prices of the raw materials have skyrocketed and have a negative impact on the business directly and indirectly in terms of sustainability. “We had to increase the prices marginally to sustain the business and made sure we optimised the cost factors and improved capabilities, but not cost-cutting or having variance in quality,” he shared.
Their brand is built on the idea of affordability, staying true to their humble beginnings, and as much as they try to stay true to these values, the current times make it almost impossible. Salaam also added: “Customers are also price-conscious as the cost of living is off the roof. Taking all into consideration, we managed to strike a balance in pricing changes.”
We asked what the future is looking like for Crêpe Runner, to which he responded: “I believe in these testing times, business resilience, and an ongoing focus around cost optimisation will be required. It is important to manage through the entire lifecycle of this crisis – not just short term, but long term too.”
On a final note, he advised other businesses to focus on the supply chain, effective business models, procurement, human resource, and finance. “A poor plan could end up in poor outcomes. Every business is unique, but there are common areas to focus on,” he shared.
They are continuously assessing conditions and making sure they initiate strategies to lower risks and to sustain in the current conditions. Concluding, he added: “To be frank, it’s a mammoth task to overcome as it’s the same to many out there. It’s going to be tougher in the near future so gear up!”
Every day, we have to go out of Colombo to look for gas
Chaiwala Colombo Director Shehan Sameen
In conversation with the Director of Chaiwala Colombo, he shared that back when they first started, they sold their chai and all their items at just Rs. 100, but now, taking into account the price hikes of sugar, milk, and spices – all essential items for a good chai – they’ve been forced to increase the price to Rs. 130.
In terms of the milk shortage, he shared that they never used powdered milk, but since there was a lack of it, everyone was forced to switch to fresh milk, which then became sparse as well.
He also informed us that other than their branch at One Galle Face, they use regular gas at all outlets including the main kitchen in Dehiwala. “There are days where we have to go to Negombo, Chilaw, and way out of Colombo just to find gas. So operationally, we are struggling. Other than a few savoury items, our signature dish is chai, and we don’t want to compromise on its quality just because of a gas shortage.”
He even told us that they had to cut down on certain items on their menu because they don’t have enough gas, so every day the menu has to be changed depending on the availability of gas.
Since spices are the main ingredient in masala chai, we asked if they’ve seen a price hike there. “There has not been a noticeable hike compared to fresh milk and gas; over a period of time, there has to be a price increase, but it should be within a limit.” Using cardamom as an example, he informed us that they use pure cardamom for their cardamom tea. “When we started off, 1 kg of cardamom increased to Rs. 16,500 a kilo, but now, fortunately, it has come down to Rs. 11,000, which is a small blessing.”
We asked him if the recent price hike in fuel had affected them at all since they are a business operating from a truck. “Definitely it has. All our items are prepared at a centralised kitchen because we want to maintain the quality, so we transport the prepared food to all our outlets, so daily, we face a logistical issue.” They also have to take into consideration staff transport and Uber and PickMe delivery since they have to pay these services a commission, which is becoming increasingly difficult. “We face a shortage of riders in both Uber and PickMe, because they do have to pay a commission and they are not willing to work for the price they get. Even with direct delivery, there is a significant sales drop since the fuel hike began.”
He added that even if they tried to hail a tuk off the road and task them with delivery, it would be unlikely because most don’t even want to take hires anymore unless they have a lot to gain.
Even with all these difficulties and logistical issues, Sameen hopes that the situation will remain constant rather than get worse over the upcoming new year. “I know for a fact that many restaurants have cut down on their menu because of these shortages. I can only hope that our current strategies will keep us afloat.”
I have had to reduce the number of orders I take
Little Miss Shortcake Founder Ashmita Wijesinghe
Speaking to the Founder of online-based bakery Little Miss Shortcake, we were told that orders have significantly reduced compared to two to three years ago, especially since it’s Christmas season.
She told us that she is unable to promote a specific Christmas menu this year because the availability of ingredients is unpredictable and sometimes they need to be imported, which is also a task due to the current import restrictions. “It has come to a point where I have to tell customers that I can’t even take their order due to a certain shortage,” she said. There are many reports to be found online that suggest that those running food-centric businesses have even resorted to buying food and ingredients on the black market at extortionate rates because it’s their only source of income.
Luckily for Wijesinghe, she has relatives that live close to her, so she manages to get her baking done without the worry of her gas running out, but one thing she does have to worry about these days is also the unpredictability of electricity. We have been warned of random power cuts throughout the day, so if one’s income is based on using an oven, then how will one survive? As she put it, it is incredibly unrealistic to expect every home baker to own a generator or to be able to hire one; most online bakers are students that are trying to earn a side income or pay off college and with this situation, on top of worrying about price hikes, they have to worry about the lack of electricity as well.
Another point that she raised was that if you are a home baker, most people expect cheaper items when compared to established brands like hotels, and they simply cannot afford to keep their prices low as they too are struggling with the lack of ingredients and cannot afford to stay afloat on capital alone.
This season, she was forced to prepare her signature love cake and Christmas cake ahead of time, so she could take immediate orders rather than promise to have it done and be unable to cater to her clients at the last minute. “I try to take as little orders as possible these days due to this, especially cookies and stuff. I do have Christmas cake and love cake available in bulk, but anything else, it will have to be an early pre order,” she stated.
Sri Lanka has certainly seen long queues to buy essential items amid tight lockdown measures to control the spread of Covid-19 with shelves at supermarkets running low – some even empty – with very little stock remaining of imported goods like milk powder, cereal, and rice. The authorities continue to live in denial, all while businesses – and therefore us customers – struggle to put food on our plates. ‘Tis the season of food and festivity, but this year, we’ve had to scavenge for a meal on our plate, as remains the same with the businesses that try their best to provide.