Eighteen-year-old Bakers Circle went into 2020 with a solid business in hand. The Delhi-based bulk bakery and confectionery supplier boasted a client list consisting of the most prominent names in India’s fast-food space. Everyone from Domino’s to KFC and Subway. With 70-80% of its revenue coming from these big chains, it had both predictability and scale.
Then came the pandemic, and both vanished in an instant. As India retreated into a lockdown, Dev Lall, founder of Bakers Circle, says orders from its fast-food stalwarts fell by 95% by April.
Gurpreet Vohra’s journey in India’s business-to-business food space is even longer than Lall’s. He is the founder and director of Tulip Institutional Services, a 25-year-old corporate food service provider in Haryana’s Gurugram. As offices shuttered, Tulip went from providing as many as 30,000 meals a day in the city to none at all.
Tulip and Bakers Circle are exemplars of the wider hotels, restaurants, and catering, or HoReCa, space, which suffered a body blow from the pandemic. The sector, which was
projected
projected
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NRAI India Food Services Report (IFSR) 2019: The sector is projected to grow at a CAGR of 9 per cent by 2022-23
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to be worth Rs 5,52,000 crore ($754 billion) by 2022, was left reeling. With 40% of restaurants expected to shut shop due to the pandemic, restaurateurs scrambled to tweak business models. From turning into cloud kitchens to introducing contactless dining and renegotiating rent agreements, it was a battle for survival. Even foodtech unicorns Swiggy and Zomato resorted to layoffs—the latter firing 250 employees, over a tenth of its workforce.
But while the consumer-facing side of the HoReCa space has rebounded as India emerged from its lockdown, recovery has been slower for the B2B side of the sector. With many businesses shutting shop altogether, and others adopting a work-from-home approach, Tulip has seen only a marginal uptick in business. Today, says Vohra, it supplies only around 3,000 meals a day—a fraction of its pre-Covid operations. For Bakers Circle, as their clients saw a revival in business, order volumes rose to 70% of pre-Covid levels by October. A full recovery, however, isn’t likely for a while longer yet.
Stung, these businesses have resorted to the usual cost-cutting measures—cutting infrastructure and staff costs, scaling back on advertising, and revisiting rental agreements. Midas Foods India, which provides dry mixes—the entire spectrum, from seasonings and marinades to beverage and bakery mixes—to restaurants across the country, cut its monthly expenses in half.
