The COVID-19 crisisTaiwan successfully handled the epidemiological situation of the COVID-19 pandemic in 2020 and witnessed a relatively low economic decline. However, the coronavirus outbreak on the island in May 2021 hit consumer food service market hard. Taiwan entered a state of alert level 3 and announced a complete ban on restaurant use. Many full-service as well as limited-service restaurants recorded store closures and employee layoffs. The sales of some companies fell to as low as only ten percent of the pre-pandemic level. Event catering business and companies providing group meal services were among the worst affected, witnessing a total segment revenue plunge of nearly 40 percent in 2021 compared to 2019. Meanwhile, the beverage service market withstood the crisis relatively well, especially the take-away coffee and tea shops.
Rising to the challengeIn order to survive the pandemic, many restaurants in Taiwan, similarly to the global trends, were forced to switch to home delivery and takeaway business models. Some operators also expanded their revenue channels by venturing into the retail and offering packaged meal solutions, frozen food, meal subscription plans, etc. Food delivery saw exponential growth during the pandemic, with many consumers ordering meals on online food delivery platforms such as Food Panda and Uber Eats at least several times a month. According to the statistics of the Ministry of Foreign Affairs of Taiwan, nearly 40 percent of the catering businesses cooperated with the food delivery platforms in 2020 and even more in the following years.
Some companies embraced yet another solution by only renting the kitchen area and accepting only online delivery orders (completely removing the part of the physical store), forming an online business model of "cloud kitchen" and "virtual restaurant". Surveys show that at least 22 percent of Taiwanese consumers had ordered meals from such virtual restaurants by August 2021 and were generally happy with this innovative service.
Entering the “new normal” in Taiwan, food and beverage service businesses are still adjusting to the changes in consumer behavior. An increasing number of catering operators are committed to the digital transformation (services such as online reservations and mobile payments), improving the experience of the physical venue, and continuing the take-out meal services with the emphasis on safety and convenience aspects.