COVID-19 has changed what life looks like for restaurants and canteens, which are now receiving help to pave the way for new sources of income and new customer groups.
‘COVID-19 has done much harm to the restaurant and catering industry. Foreign visitors are staying away, turnover is down by several billion, and many companies are cash-strapped and looking for new ways of earning money. We must now get out and help them.’
That’s the view of Pelle Øby Andersen, Director of the Food Organisation of Denmark (FOOD), which, with a subsidy of DKK 3.5 million from the Danish Executive Board for Business Development and Growth, is now stepping in to help ailing restaurants, canteens and subcontractors.
This is being done through a project called ‘The creative and competent food scene’. Over the last three years, the project has been helping ambitious and talented food businesses in the Copenhagen area. So far, the aim of the project has been to boost business growth, but the focus has now shifted to helping them to survive and readjust.
‘Companies need to have several eggs in their basket for generating income, and we are therefore focusing on new sales channels and business development. We simply have to give them the means to earn money from something different from what they have earned money on until now,’ says Pelle Øby Andersen.
The aid has just been granted by the Danish Executive Board for Business Development and Growth from the ‘COVID-19 pool’ which is intended to help crisis-stricken firms. The funds, which include money from the European Social Fund, mean that the food project can now extend its scope to the whole country and give a helping hand to around 150 companies and 300 employees until the end of 2021.
Large differences between the country and cities
The aid goes to a sector that is reopening after having been severely affected by the lockdown and the closing of international borders. During the COVID-19 crisis, a lot of firms tried to keep business going by offering take-aways and new activities, but for many this meant striking out into unknown territory. At the same time, the reopening means that the catering industry has to comply with new requirements and guidelines to avoid spreading infection and that customers have changed their habits and expectations.
However, there are large differences between the countryside and the towns and cities, emphasises the FOOD Director:
‘The crisis is worst in towns and cities, as there has been no lockdown in the areas with summer houses. Furthermore, most restaurants outside the big cities generally have lower rent costs, while larger establishments with a big staff are mainly located in cities. And they have had a very rough time of it — despite the relief arrangements,’ says Pelle Øby Andersen.
Copenhagen badly hit by border closure
The project must get up and running as soon as possible and the Food Organisation of Denmark and its partners — the Copenhagen Hospitality College, Madfællesskabet (the Food Community), Business Region Aarhus and Danmarks Restauranter og Caféer — are also keeping a special eye on businesses and new activities in Jutland, says FOOD’s Director:
‘The lack of international guests has hit Copenhagen in particular, but also Aarhus, which has become popular among visitors from abroad in recent years. It is mainly foreign guests who fill up Copenhagen’s eateries on Tuesdays, Wednesdays and Thursdays, and when that demand suddenly dries up because the borders have been closed, then a rather large turnover of several billion per year is missing.’
Under the project, companies can, for example, get help for financial and cash management, for a stronger link between the catering industry and food producers, and for improving the experience for guests.
‘We reckon we are seeing a ‘go local’ reaction because of COVID-19, with consumers wanting to stick to their local area and looking for authentic experiences. As a result, businesses need to get closer to those producing the meals and keep track of their value chains and suppliers,’ says Pelle Øby Andersen.
Entrepreneurs: Come on board and use your time
For many entrepreneurs, it can be difficult to find the time and the energy to take part in development projects — not least for those businesses that are only now just starting to see light at the end of the tunnel. But there’s no need to have any hesitation, says the food entrepreneur, Morten Sørensen, who develops and sells non-alcoholic drinks with a taste of spirits in the company Ish Spirits.
'Our experience of participating in ‘The Future Food Scene’ has been really good. I reckoned I had a really good idea and I wanted to take it further. But it turned out to be much more complex than we had thought to launch it professionally and get our products into shops, and that was where the project really gave us a kick start,’ says Morten Sørensen, highlighting in particular the Food Scene’s network which gave access to large customers.
The Danish Executive Board for Business Development and Growth is pleased that Structural Fund projects such as ‘The creative and competent food scene’ are coming to the rescue of a sector that is struggling:
‘The situation is serious, and many businesses — especially in the hospitality sector — are under severe pressure financially. So it is good that the companies’ challenges are also addressed by the Danish Executive Board for Business Development and Growth and that by supporting the food project we can help to get the industry back on its feet again,’ says Board member, Dorte Krak, who is also CEO of the Arp-Hansen Hotel Group A/S.
Facts about the measure
At its meeting of 6 April 2020, the Danish Executive Board for Business Development and Growth allocated a total of DKK 114.7 million to the adjustment and scaling of existing business support projects which can help companies on two fronts:
- in the short term, by mitigating the immediate consequences of COVID-19;
- in the medium term, by preparing businesses in Denmark for a ‘new normal’ after COVID-19 until the end of 2021.
Fifteen projects are being funded from the COVID-19 pool. With the pledges made so far, up to DKK 88 million of the resources allocated are accounted for. The measure is being funded by the European Social Fund, the European Regional Fund and decentralised business promotion funds.
For more information on the COVID-19 pool, see the Danish Executive Board for Business Development and Growth’s website.
Facts about the ‘The creative and competent food scene’
Operator: Food Organisation of Denmark. Main partners: The Copenhagen Hospitality College, Madfællesskabet (the Food Community), Business Region Aarhus, Danmarks Restauranter og Caféer.
A business development project in the food industry, which has been extended for 18 months until the end of 2021 and broadened in scope from covering the Copenhagen area to becoming a nationwide project. The project has received additional funding totalling DKK 3.5 million from the European Social Fund and the decentralised business promotion funds.
The aim of the project is to help 150 restaurants, canteens and subcontractors and 300 employees tackle the challenges arising from the COVID-19 pandemic. It is expected that up to 240 employees will be upskilled in the course of the project.
Read more about the project in the Danish Business Authority’s project database
Facts about the European Social Fund
In the 2014-2020 period, the European Social Fund, the European Regional Fund and Danish partners are investing DKK 1 billion each year in activities that create growth and jobs nationwide.
The Social Fund programme for 2014-2020 is targeted at entrepreneurship, education and social inclusion. We need more new businesses and a more skilled workforce. That is essential to increase productivity, competitiveness and growth.
The European Social Fund therefore co-finances projects to:
- increase entrepreneurial activity and provide for growth-oriented skills development in small and medium-sized enterprises;
- promote social inclusion — through specially designed secondary education, pathways for integration into the labour market and social enterprises;
- strengthen vocational education/training and higher education.
The European Social Fund’s ‘The creative and competent food scene’ project, with an additional grant, will extend the efforts to help the troubled catering and food sector to cover not just the Copenhagen area but the whole of Denmark.
The entrepreneur, Morten Sørensen, who previously pitched his idea of selling alcohol-free drinks on ‘Løvens Hule’, the Danish version of ‘Dragon’s Den’, has benefited from being involved in part of ‘The creative and competent food scene’.
