Labour-hit restaurants turn to outsourcing

Labour-hit restaurants turn to outsourcing

With the tightening of labour laws and lack of manpower in the service industry, food and beverage operators are now turning to food manufacturers and production kitchens to solve their labour woes.

Although some restaurants and hotels, including some four-star ones that outsource food and beverage operations to external operators, have been practising this for years, demand for such services have been on the rise of late.

Companies with production kitchens that manufacture and prepare food say they have seen as much as an 8 to 10 per cent month-on-month increase in sales in the past year. Others have noticed a 20 to 50 per cent jump in the number of clients approaching them for food products.

Food and beverage outlets that are now outsourcing their food offerings range from new restaurants and cafes to established chain restaurants and five-star hotels.

Factors that contribute to this rise include the higher foreign worker levies and further reduction of the foreign worker dependency ratio ceiling from 45 to 40 per cent, which will kick in next month. Other reasons for the increased demand, food manufacturers say, include rising operating costs due to rental hikes.

And it is because of these factors that food manufacturers see potential for growth in the sector. This is also in light of the Government's push towards increasing productivity and reducing reliance on foreign labour.

The trend of increasing productivity levels and outsourcing food here mirrors what has been happening overseas. In France, for instance, the French bemoan the disappearance of artisanal croissants. There, with the rise of the "industrial croissant", bakers are now turning to ready-made doughs, breads and other viennoiseries, baking them in the oven and at times, passing them off as their own, due to time and labour constraints.

In Singapore, diners are concerned about hawkers that turn to suppliers for ingredients that they once used to make themselves from scratch. These include carrot cake, fishballs and yong tau foo (beancurd and vegetables stuffed with fish paste).

Now, well-known hotels, buffet restaurants and chain restaurants are outsourcing too, production kitchen operators say.

In fact, there is plenty of food that these establishments can opt for - ready-kneaded prata dough, coffee beans roasted to specifications, individual portions of seafood, sauce for paella and dimsum.

Most items come either frozen or chilled, usually in vacuum-sealed packs. These need to only be reheated in a hot-water bath before serving.

With more food and beverage outlets turning to wholesale food manufacturers, this might mean that diners could be eating the same food at different places.

For instance, the same lobster bisque could be served at a hotel buffet as well as in a cosy cafe. Perhaps a curry at a hawker stall could be the same one at a hotel's coffeehouse restaurant.

However, these production kitchens are also able to create and development recipes for individual clients.

Chinese restaurant group TungLok started producing for other food and beverage clients about three years ago.

On why outsourcing appeals to clients, Mr Andrew Tjioe, 55, its executive chairman, says: "By outsourcing, companies can save on money and manpower, enjoy better-quality products, and concentrate on other areas of the business. Companies may also apply for a government grant."

For instance, meats, when cooked in large potions, have a more intense flavour, he says.

TungLok, which makes mainly dimsum, gyoza and a selection of cooked food for wholesale clients, has had "single digit" percentage growth in the segment in the last year, but Mr Tjioe says it will be "growing this sector for sure".

Other companies that offer these services include Antoinette, which sells its croissants and breads such as brioche and baguettes, and custom-made desserts to chains and stand-alone restaurants; and the Argentum Group that is behind Foodology at Marina Bay Financial Centre and Foodology Fresh in Maxwell Road. It manufactures food and pastries for about 100 clients, including company cafeterias, kiosks and semi fine-dining restaurants.

The Quayside Kitchen by The Quayside Group, which runs restaurants such as Peony Jade and Quayside Seafood, also supplies items such as dimsum and Western dishes to food and beverage outlets other than their own.

The savings can also be significant for restaurants that decide to outsource because staff can be cut and kitchen staff need not be fully trained in the culinary arts.

Moreover, because less heavy cooking takes place in the kitchen, exhaust hoods need not be cleaned as often. Restaurants can also downsize their kitchens and dedicate more floor area to serving customers, which will in turn increase revenue.

Savings from cutting manpower costs aside, it can still seem somewhat more expensive to purchase ready-made food, but existing staff can spend time making other items, and creating new dishes instead of labouring over simple stocks and stews.

Other draws for restaurants include high food safety and hygiene standards, consistency in food quality and the transparency of food costs.

Most restaurants declined to talk to SundayLife! about outsourcing their food, for fear that it might hurt their reputation. But those that spoke to SundayLife! say they do it for "peace of mind".

Mr Laurent Bernard, 45, who runs an eponymous chocolaterie as well as a cafe, Laurent at Portsdown, now buys savoury food for his cafe from chef Julien Bompard's Cuisine Service. He started doing so last year. He also runs his own central kitchen and supplies his chocolates and cakes to other businesses including hotels.

He says: "It is more efficient and I can be assured of the quality. Now, I am also able to focus all my energy on my core business, which is the chocolaterie."

He has also been able to cut the number of kitchen staff from three to just one. He used to employ three in case one did not turn up for work.

Only a few items, such as Eggs Benedict, burgers and scrambled eggs are cooked to order. Replacing staff who leave does not pose as much of a problem any more, as the work does not require as much skill.

Pizza chain Pezzo will be using a newly-created spice paste, which it collaborated with Dancing Chef to produce, for its Asian-inspired pizza, to be launched in August. The chain currently has 16 outlets and plans to have 25 by the end of the year.

Its co-founder Chiang Zhan Xiang, 29, says: "We could probably make it cheaper ourselves, but the trade-off of having someone to do it for us is that quality and consistency will be maintained."

Still, convincing chefs to outsource part of their food could prove tricky, as many do not want to be seen as compromising their own integrity.

Chef Bompard, having run restaurants and worked in hotel kitchens, says: "We can provide the framework for chefs to work with, not take away their creativty."

Some diners whom SundayLife! spoke to say they are irked by the thought of knowing that the food they are eating has not been made in-house. Others seem unfazed.

Account manager Daniel Lim, 26, says: "I guess, unless we have savvy tastebuds, we're not going to be able to tell whether we have had the same beef rendang at more than one place. Honestly, unless I ate it the day before, I'm not sure that I could tell the difference.

"But knowing that I could be paying $8 at one place and $15 at another for the same soup, just in a different setting, puts me off."

Another diner, Ms S.L. See, 42, a secretary, says: "Half the hawker stalls these days get their food from suppliers. I don't see much of a difference when restaurants have to do it because of manpower issues.

"But I think restaurants should at least do something to it - make what you have bought your own by adding more ingredients to it."

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