Summary of 2022: HoReCa

While we thought 2022 would be a springboard for the HoReCa industry to recover from the pandemic, the exact opposite has happened. The outbreak of war, soaring inflation, and with it rising food prices at an alarming rate have created a situation where many restaurateurs or food and hotel owners are struggling to survive in the HoReCa market. What strategies have specific brands chosen to overcome the crisis? What changes and events were key for industry representatives? Check out the answers from food and design experts!

HoReCa brands' strategy to overcome the inflationary crisis

Marcin Przybysz - Executive Chef, Epoka Restaurant

It is difficult for me to speak for others, but I can speak about the era and share my opinion on the current situation in the industry. These are undoubtedly difficult times for everyone, but the people I talk to about the situation are not complaining. I think the ones who complain are the ones who have always complained, that is, the creators of so-called casual restaurants who haven't thought through their concepts. Remember that even during an inflationary crisis, there are restaurants where there is an increase.

I have a belief that when you have everything well developed, you should manage the restaurant in this way, consistent with each other, and there will always be this audience. In addition, guests also understand the current situation, because they can see for themselves how all prices are going up. So I personally try not to complain, but to look for solutions.

In my opinion, inflation is a kind of continuation of the pandemic – from the point of view that this is the next stage of "cleaning" in Polish gastronomy. Every day we pass by a lot of ill-conceived, unattainable concepts that will eventually be closed. Inflation accelerates this process. After all, there are places that are just worth going.

I'll also add something that I always emphasize – a huge gap remains between the Polish and foreign restaurant markets. Abroad, establishments are often run by chefs who are passionate and really know how to cook. In our country, it is often just the owners, who in many cases do not understand how difficult it is to manage a restaurant. Let's see how this works in other parts of the world, such as Italy. There, even in small towns, you can find many places with real, traditional, artisan food, managed by an experienced chef.

Therefore, I believe that inflation will test the market, and among these "owners" will remain those who want to listen to the voice of chefs and accept real needs, and not be guided by their own vision, which is often completely disconnected from the realities of the market.

Marek Cynowski – CEO & Co-Founder, Rebel Tang

There is no single universal strategy that would be the golden mean and the solution to all problems. The industry needs holistic actions that will not only increase the income of restaurateurs, but also give them a break. The last two years have been a constant struggle and struggle with everyone for their existence. Unfortunately, I think that many establishments will not survive the start of the new year – the constant increase in utilities, the potentially increased cost of food and the uncertain position of consumers will not contribute to consumption in restaurants.

What we do as Rebel Tang has a positive impact on improving the situation of restaurateurs-delivery is constantly growing,and you can no longer not do it. A few years ago, there was a time when everyone had to be on Facebook-hairdressers, pharmacists, and even parishes opened their profiles and were present there. 90% of them don't take any action anymore because they just didn't do it right, they followed the crowd and got lost with that crowd. Now the situation is similar-there are many platforms for ordering food, each of them has its own specifics, its own algorithm, and it's not an easy task to be able to exist there and receive orders. Just like in the case of Facebook once, and now in the context of delivery actions-you should trust professionals and do it carefully.

Agnieszka Tokarz – Food Trend & Product Manager, Nice To Fit You

Inflation is not without reason a hot topic of conversation at the moment. The pressure associated with it is growing not only in Poland, but also around the world, which directly translates to m.in. prices of goods in stores, consumer purchasing power, or cost of living. Brands are facing the challenge of providing quality services in the HoReCa sector, while simultaneously struggling with rising product prices, utility costs, and packaging. Moreover, today's consumer is feeling the effects of these problems, also trying to reduce their costs.

What we are seeing on the Polish market is growing interest in our own brands from our products. To maintain it, it is important to have the right pricing structure for the products offered or to build a brand identity. Worth taking care of m.in. about the availability of the brand's products in discount stores, where we are increasingly making purchases these days. They also talk about asking for help from omnishoppers, who track the behavior of our customers, as well as about returning sales on premise – "on the spot". There is no doubt that consumers are looking for cheaper solutions-so you need to choose the right pricing tactics and plan (at the right time) any discounts or promotions.

Krystyna Pogoń - Nutritionist, food technologist, Founder and Chief Operating Officer of Dietific

The inflationary crisis that has come with 2022 is a phenomenon that most existing restaurants, hotels, and catering establishments have never experienced. It should be noted that this is more noticeable for the HoReCa industry than for the average consumer. Our current expenditures are those that have significantly exceeded CPI inflation-I am talking here about the prices of food raw materials and energy. The inflationary crisis cannot be viewed in isolation from the previous two pandemic years - even then the industry faced big problems, and the current year was supposed to be the beginning of business recovery, when many of the obligations assumed had to be repaid. So, for many companies, what they had to deal with in 2022 was much more serious than inflation – it was another blow after many difficult months.

Unfortunately, many brands – from large to small, local-do not join us for another year. Remember that a significant part of the HoReCa industry is not large corporations, but small businesses run by specific people - for many of them, the only option for survival was to stop the business. This group includes one of the closest culinary places to me-an Asian restaurant located in one of the Krakow settlements, which is run by old friends. In November of this year, we had our favorite bamboo soup and the best roast beef in the world there for the last time.

Typically, most brands in the industry have accepted the need to raise prices to keep up with rising costs. Depending on the size of the business and the situation, these increases were more or less, but were fairly common. Starting with the prices of hot dogs in a popular furniture chain, ending with global fast food and premium restaurants. In my opinion, the winners in this situation are those who decided to slightly increase the promotion, while maintaining the quality that customers are used to. The worst possible strategy is to raise prices and reduce product quality - in an era of inflation, customers expect an increase (even if they are not satisfied), but when they see higher prices, they expect that at least the same standard that they used to use will follow.

The closest part of the industry for me is, of course, dietary nutrition. In this sector, the behavior of companies associated with higher prices was very diverse, and sometimes surprising – you could even see a decline in prices in such a difficult, inflationary year. One of the industry leaders decided to take such a step, announcing an unprecedented promotion at the beginning of the year, and then permanently significantly reducing prices. This is due to the strategy of capturing a part of the market that was previously developed by cheaper organizations. I suspect that with the large-scale impact that such a large company can get, such a strategy may be justified even against very high costs.

At the same time, many companies tried to keep prices unchanged for as long as possible, slightly reducing the quality of food served. Unfortunately, some of the brands that tried this approach didn't make it to the end of the holidays – the worst demand period for the industry. Many companies have decided to raise prices in line with rising costs, trying to "sweeten" customers with temporary promotions or distract attention from it by modifying the offer.

Probably most of us working in the HoReCa industry paid significant attention in 2022 to the possibility of reducing costs. In recent years, the growth of employees ' salaries has sharply slowed down, and budgets for advertising or investment in new projects have been reduced.

I cross my fingers that after such a difficult year, the next one will be a little softer. I expect that even if inflation continues, the spikes in food and energy prices will no longer be so surprising and sharp, which will allow us to take a little break and plan further actions.

Positive changes in the industry

Marcin Przybysz - Executive Chef, Epoka Restaurant

This year was good because there were no restrictions or interruptions in COVID – people have started going back to their favorite restaurants and are more likely to eat out. Even though the beginning of the year was difficult due to the war that broke out across our eastern border, we have, in fact, seen a great power of relief slumber in our country.

However, I've also noticed positive changes strictly in the food service industry. Those who did a good job are doing it even better today. They do not hide their heads in the sand, on the contrary-they monitor their business even more carefully, control the cost of living of the restaurant, which, in fact, should always be monitored.

Marek Cynowski – CEO & Co-Founder, Rebel Tang

The most important change we are seeing is professionalization. An increasing number of landlords are choosing to focus on the one or two things they work best at, cutting down on their menu. Magda Gessler has been teaching this in her programs for a decade, but it's only now that it's becoming too expensive to maintain the many products needed to maintain a large map that these changes are being implemented very consciously. This allows restaurants – even though they have smaller maps-to simply eat better.

Agnieszka Tokarz – Food Trend & Product Manager, Nice To Fit You

I think the biggest positive change is the actual one listening to the customer's needs. We have never seen such a flexible approach and adaptation to what the consumer is looking for and within reach of what amounts they can afford to buy food. Companies are trying to meet the expectations of consumers by creating cheaper options that are adequate to the financial situation of many Poles.

Krystyna Pogoń - Nutritionist, food technologist, Founder and Chief Operating Officer of Dietific

This year it is very difficult to look for positive things-it was incredibly demanding. There hasn't been a week that I haven't heard about a well-known and beloved food business closing down, and from this point of view, the challenge is to look for what's good.

However, I noticed some positive changes – at the level of contacts between entrepreneurs in the industry. So far, these have been purely business contacts – good ones with counterparties, but competitive and sometimes even hostile ones with competing enterprises. And suddenly there was a situation that in some sense outgrew all of us-a situation in which there are no victories, there are only those who manage to survive. And this objectively difficult situation brought with it a fair wave of kindness - contractors have become more supportive of each other and find out what else they can do to help themselves. Even competing entrepreneurs have started talking to each other and looking for solutions together.

My dream was to consolidate the diet food market by creating a group of actors who share their experiences and problems, so that they can better respond to such a difficult situation. At the moment, this is still a dream, but I have already met many representatives of this relatively small industry and believe in the possibility of its implementation.

Main event of the industry

Marcin Przybysz - Executive Chef, Epoka Restaurant

Of course, we all in the industry have been waiting for the next Michelin guide for a long time. Unfortunately, obviously, we still need to be patient in this regard.

From the point of view of the epoch, an important event was rating us in the rating La Liste. We have become the highest ranked Poland restaurant among the top 1000 in the world.

However, for me personally, the key event was participation in the night market. I consider this to be one of the most interesting events of my life that I would definitely like to repeat!

Marek Cynowski – CEO & Co-Founder, Rebel Tang

There were several such events. Capture the Doordash Volt "while this may not be a noticeable change from a customer perspective, the global tycoon is already present in Poland.

For us, they were also visible increasing orders in the delivery channel - Despite the worst time for the entire industry, the Food delivery category is constantly evolving.

I can't help but mention the collaboration of brands with stars. McDonalds broke the bank with foul language; we, as Rebel Tang, can also boast of such a groundbreaking project-Blow Burgers with the biggest influencer in Poland, Karol Gezwa Blok.

Agnieszka Tokarz – Food Trend & Product Manager, Nice To Fit You

In the Polish market, this is definitely the case Food Market and Trade Forum, organized in early November 2022-both online and stationary - at the Sheraton Hotel in Warsaw. During this event, a meeting of representatives of key and most important brands was held. They had the opportunity to share their thoughts and experiences on companies ' strategies in an era of inflation, the values they bet on, and the future of the industry.

As for foreign events, this is definitely a breakthrough for me paris sial or Plant Based World Expo Europe z Londynu. These are really high-level events, where in addition to product exhibitors, who you can personally get to know and taste their products, conferences are also organized with a lecture part or even a culinary demonstration with the presentation of products in the organization of a specific dish!

Krystyna Pogoń - Nutritionist, food technologist, Founder and Chief Operating Officer of Dietific

The main event not so much in the industry, but for all of us, including entrepreneurs, was, of course, the beginning of the war in Ukraine. This changed all the plans and forecasts, and as a result-the real course of this year in the HoReCa industry.

Both the outbreak of the war and all its associated consequences (i.e., inflation or reduced demand for public catering services) led to a number of liquidations of subsequent enterprises in the industry. The gastronomic map of Poland for the end of 2022 will be very different from the beginning of this year, and it will be missing many wonderful and favorite places.

An example is the fall of Mr Hambuger,the first Polish fast food chain with a 30-year tradition. Although I am not a fan of fast food, I am very sorry that the brand created in Poland could not cope with the difficulties that this year brought. Unfortunately, this is something that many domestic companies that do not have a "backend" in investment funds or foreign capital face. This is something to think about when making purchasing decisions – our Polish brands, family businesses, and local restaurants need loyal customers/guests more than large corporations.

Other sad industry news items include death of Tadeusz Golubevskyresponsible for creating a truly unique hotel chain. And even if I personally prefer a slow life vacation, the Gołębiewski hotel chain is significant on the Polish HoReCa industry map.

While preparing this resume, I also tried to find some positive industry event so that it wouldn't be so gloomy. , Here, of course, remembered industry exhibitionsTwo years later, the meetings were finally held in the usual stationary mode, which gave industry representatives several opportunities for joint meetings.

The biggest problem

Marcin Przybysz - Executive Chef, Epoch Restaurant:

It is difficult to find one answer, because in gastronomy every day is a new challenge. This is best known by people working in the industry – here we are waiting for something every day that we have never encountered before.

I try not to worry about problems, not to focus on deepening them, but on finding optimal solutions. The difficulties I face turn into something positive. I think this is a good universal strategy for those who want to link their future with the HoReCa sector.

Marek Cynowski – CEO & Co-Founder, Rebel Tang

1) maintaining businesses and jobs.

2) maintaining prices at a level acceptable to customers, as opposed to the rapid growth of raw materials and the constant increase in utility prices.

Agnieszka Tokarz – Food Trend & Product Manager, Nice To Fit You

As Nielsen puts it in his Consumer Outlook Survey report: The task of retailers and manufacturers will be to determine an acceptable price compromise while simultaneously satisfying the choice of products for different consumer groups that will meet the changed priorities..

Next year, we continue to struggle with high inflation and a society that counts every dollar. Success will consist in offering solutions that, from the consumer's point of view, will be profitable for them and at the same time offer quality products. A good approach for companies is to rethink brand strategies, perhaps rethinking product strategies, setting goals that match the brand's nature, identifying their market advantages over competitors and proximity to current and future consumers, listening to their needs and offering adequate solutions.

Krystyna Pogoń - Nutritionist, food technologist, Founder and Chief Operating Officer of Dietific

The year 2022 actually presents two challenges that together make up one: significantly increased costs in almost all categories and reduced demand - both due to the decline in real incomes of customers and fears of a deterioration in the financial situation, and due to a significant reduction in the number of foreign tourists. And all this in a situation where businesses were already straining so much because of the problems posed to them by the pandemic.