"Untact Era, Survive: Food & Dining Survival Keywords... Packaging, Delivery, Subscription, Machine"

Seeking Breakthroughs for Survival... Strengthening Delivery Services
Expanding Kiosk Installations... Increasing Robot Cooking and Serving

Robot Cafe Beat Sungkyunkwan University Seoul Campus Branch

[Asia Economy Reporter Lee Seon-ae] The food and dining industry, hit hard by sales declines due to the novel coronavirus infection (COVID-19), is actively seeking breakthroughs for survival. To keep pace with the untact (contactless) trend, they are launching online-exclusive brands and strengthening takeout and delivery services. They are also focusing on food tech (a combination of Food and Technology) to enhance contactless ordering systems through the introduction of machines (vending machines) and robots, and are rolling out subscription services to generate regular sales.

Lotte Eats

Strengthening Takeout and Delivery Services

According to the industry on the 4th, Shinsegae Food recently began a pilot service where group orders by phone at six locations?including 'No Brand Burger' Seoul City Hall, Jongno-gu Office, Euljiro 4-ga Station in office-dense areas, and Jungnang Station, Junghwa Station, Junggye Park Station in residential areas?are delivered through delivery agencies. Additionally, at Jongno-gu Office and Konkuk University Station, where takeout customers are many, they started a pilot operation of Naver Smart Order to shorten takeout times and improve ordering convenience.

After social distancing measures were strengthened, takeout sales increased, prompting the enhancement of related services. In August, the takeout ratio at No Brand Burger was 58%, up 16% from 42% in July. Among about 40 No Brand Burger stores, the takeout ratio at office districts located in Gwanghwamun and Gangnam?such as Seoul City Hall, Jongno-gu Office, Euljiro 4-ga Station, COEX, and Yangjae Station?was 19% higher than other stores. The number of deliveries in August at Chef To Go, a delivery-specialized store operated in Yeoksam-dong, also increased by 27% compared to July. Notably, the lunch delivery ratio of office workers near Yeoksam-dong, which was 53% in January before COVID-19, rose to 79% in August.

A Shinsegae Food official said, "With the resurgence of COVID-19 and strengthened social distancing, office workers feel burdened by having to dine in stores for lunch, while hamburgers are preferred as takeout reduces contact with others," adding, "As delivery inquiries have surged recently, we are exploring effective ways to implement delivery services at all No Brand Burger stores in the future, and Chef To Go will expand its menu to attract delivery customers."

Movements to strengthen untact services through ordering apps are also active. SPC Group plans to enhance the 'Baro Pickup' service of Paris Baguette’s own delivery service, PABA Delivery. As the number of users increases, they have recently partnered with delivery apps Yogiyo and Baedal Minjok to increase the share of pickup services. Paris Baguette stated, "Currently, usage during morning hours has increased by nearly 30% compared to the previous month," and added, "Pickup service minimizes in-store stay time and is expected to spread mainly in office districts." Eggslut also launched a delivery service, available through 'Happy Order,' a delivery app operated by SPC Group’s integrated membership 'Happy Point,' and 'Coupang Eats.'

Hollys Coffee, noting the increase in consumers enjoying home cafes or preferring untact consumption, has partnered with delivery app Yogiyo to expand delivery services. Lotte GRS is keeping pace with the untact trend by launching 'Lotte Eats,' a membership app integrating its dining brands.

Haagen-Dazs Vending Machine

Evolving Food Tech

The food and dining industry is adopting various food tech technologies to enhance hygiene safety and customer convenience. H?agen-Dazs recently installed 120 ice cream vending machines and began full-scale operation. These kiosks operate 24/7, allowing consumers to use them easily and quickly without contact with sales staff. A H?agen-Dazs official said, "We expect consumer accessibility to be strengthened through a large-scale expansion by installing a total of 120 vending machines mainly in places with high foot traffic such as companies, shopping malls, and tourist spots."

Dalkom is focusing on expanding its robot cafe 'Beat.' Beat operates as a fully unmanned service from ordering to pickup. Recently, it expanded stores to university campuses. A Dalkom official explained, "Beat, an untact app-based unmanned cafe service, is optimized for the MZ generation and young office workers who are mobile natives and desire efficient time management," adding, "Consumer touchpoints in road-side commercial areas are steadily increasing."

CJ Foodville’s family restaurant 'VIPS' introduced the 'LG CLOi Chefbot' that cooks food directly in some stores. Customers place desired ingredients in a bowl at the noodle corner and hand it to the Chefbot, which cooks the noodles in hot water, drains them, returns them to the bowl, and pours broth to complete the dish.

Lotte GRS introduced the serving robot 'Penny' in some stores of the Mediterranean healthy food restaurant 'Villa de Charlotte' and family restaurant 'TGI Fridays.' Penny moves autonomously to customer tables after staff load food onto it and input the destination on a tablet. After customers take the food, Penny automatically returns to the waiting area to await the next serving.

KFC extensively renewed the system of kiosks and its app used in stores to enhance user convenience for everyone. The kiosk now features enlarged product images and simplified screen layouts, improved categories for easier menu search and selection, and minimized touch counts from menu selection to payment for faster ordering.

Gongcha Korea has expanded kiosks introduced since 2018 to about 400 stores and plans to continue expanding. It also operates a membership order service, an O2O (online-to-offline) service allowing pre-order and immediate pickup through its membership app. Based on GPS, customers can select Gongcha stores within a 2 km radius to place orders.

Lotte Confectionery Monthly Snacks 2nd Recruitment Sold Out

Strengthening Subscription Services and Opening Untact Stores

As the number of people staying at home increases, there is a trend toward launching and strengthening online-exclusive brands and activating the subscription economy. Daesang launched the online-exclusive brand 'JibeuroON' in 2017 and recently released three new 'Paldo Byulmi' soup products, as well as 'Cheese Ball' and 'Sausage Ball,' which are baked rather than fried for a light taste, showing active online business efforts. Online business sales have also surged from 56.8 billion KRW at launch to 89.3 billion KRW last year. A Daesang online business division official said, "As time spent at home has increased recently, demand for snack-type HMR (home meal replacement) has grown," adding, "We plan to continuously introduce products reflecting diverse tastes."

SPC Samlip launched the home deli brand 'Yum' in collaboration with Coupang, and Shinsegae Food expanded its online-exclusive frozen dessert lineup with Beckia En Nouveau.

CJ Foodville plans to expand the monthly subscription service of its bakery 'Tous Les Jours' from nine directly managed stores to franchise stores. The Tous Les Jours monthly subscription service provides one Americano per day for 19,900 KRW per month. A Tous Les Jours official said, "We started with the coffee subscription service, which had the highest customer preference," adding, "We expect strong customer response by significantly expanding subscription service stores that offer daily purchased products at reasonable prices."

Lotte Confectionery operates a monthly snack box service featuring different Lotte Confectionery products each month. The second recruitment for the 'Monthly Snack' service, which started on the 20th of last month, ended early in six days. A Lotte Confectionery official said, "Without special promotion, word of mouth spread quickly, filling the recruitment quota in a short time, raising expectations for the snack subscription service," and added, "We plan to continue expanding the snack subscription service and develop it into a killer content for the e-commerce business."

The chicken industry is strengthening untact small stores. BBQ introduced the untact delivery-specialized small store 'BSK,' which exceeded 50 contracts within a month. BSK operates in small spaces of about 8 to 12 pyeong (approx. 26 to 40 square meters) without a dining hall, specializing only in delivery and takeout, with delivery handled by agencies. BBQ expects to open 100 stores within the year.