Resilience in the pandemic age: Conti's response to the challenge presented by COVID-19
By: Virgilio "Toy" Paralisan
A
ccording to William “Bill” Edwards, Chief Executive Officer of Edwards Global Services (EGS) and a recognized advisor to CEOs, U.S. based franchisor brands pursue the bulk of its market overseas. In fact, 95% of US franchisor brands are actually outside continental US and Canada. They anticipate that two-thirds of the new middle class will be in Asia.
Why are these numbers significant?
The above numbers are significant because any Philippine franchisor brand will be looking at a US brand as a major competitor specially in the food or fast food industry. A lot of the US-based brands have been hit hard but a lot of them are also making a comeback.
So how are our local brands doing?
Apparently one brand is resilient enough to beat the odds.
In the afternoon of the first day (Philippine Standard Time) of the Asian Family Enterprise Excellence Conference 2021 or AFEEC 2021, we got a chance to listen to one brand that made it out of the woods.
Here’s my personal reflection on that talk.
The talk I’m referring to is the one by President & Chief Executive Officer of Conti’s Bakeshop & Restaurant and Wendy’s Philippines, Joey Garcia who gave a piece of his mind and experience during the first day, June 25, 2021, in the AFEEC 2021.
Conti’s bakeshop and restaurant is a family owned and managed business. Three sisters started it all, namely: Cecille Maranon, Carole Sumulong and Angie Martinez in 1997. Currently, Conti’s is in partnership with Udenna for three (3) years. To date, Conti’s is operating 51 stores and hoping to close the year 2021 with 65 stores.
Before the pandemic, Conti’s revenue was largely driven by dine-in, and early stages of digitalization and e-commerce.
As the pandemic hit the country, Conti’s experienced a sudden decrease of revenue during the first two (2) months of its operation.
How did Conti’s Bakeshop and Restaurant manage its business operations in this really volatile and uncertain environment?
Let’s highlight some of the major pivots undertaken by Conti’s.
Pivoting the People’s Uncertainty: Putting the teams safety and welfare first
- Employee Welfare
Conti’s chose to look after employees' welfare since they were hit by the pandemic big time. Employees lack resources and mobility because of lockdown. As company’s financial support to the employees, they released cash advances, 50% of the 13th month pay, and relief goods to sustain their daily needs. - Launched an employee transportation program
The company initiated a motorcycle or bicycle loan for those who want to come to work using their own transportation. On top of that, they also provided company vehicles from point to point pick up to bring them back and forth to work. - Remote working
Conti created a different arrangement with regards to flexibility of work structure. Adapted a work from home set-up. Also allows employees to physically come onsite with schedule flexibility on how they are going to fulfil their responsibility. - People connect
One of the initiatives of HR, the company uses digital platforms in communicating to employees (zoom, facebook/messenger and clockify). Allows real time support in cascading information from the company.
According to CEO Joey Garcia, the pandemic kept them from leaving their houses which caused a major problem for the business since it was designed for a dine-in experience.
It was a big issue and they were left with no choice but to find a solution.
Pivoting the revenue stream: Leverage from asset mix strategy to drive revenue and cash flow
- Convert to stand alone sites into “Build-to-Speed” model - allows drive thru experience and curve side pick up. A convertible drive thru to dine-in store in the future as the condition goes back to normal.
- Launch “out of mall lean model” store - take-out nook, express lane, kiosk/mobile store
- Accelerate launch of dark kitchen - door-to-door delivery in collaboration with grab company
Pivoting the digital space: transform our customer touch points into digital
- Embracing e-commerce - created an online store through its website, chatbot, grab collaboration, store direct order thru call
- Delight shoppers program - a program for displaced workers to earn money by allowing them to resell its products.
Pivoting the brand equity: Building the brand of quality and spreading delightful moments
- Deliver same quality products wherever customers are, such as:
- Frozen pies
- Ready to cook meals
- Heat-to-eat frozen delights
- Increase presence in social media by creating relevant digital content and doing social media activation through Facebook.
- Use of key media influencers like artists, vloggers, and the like.
Pivoting the supply chain: ensuring business continuity with supplies and expansions
- Tap in some of the suppliers by creating partnership.
- Backward integration and farm-to-table.
- Gain more control over supply chain production of raw materials to end-product and reduce waste and transport costs.
- Expansion and establishment of a second commissary for business continuity. So they can continually cater to product demand and serve its customers, they created a second commissary.
With the strategies mentioned above, was Conti’s bakeshop able to bounce back after the business strategy recalibration?
Yes, they were able to bounce back a few months after. They were able to double its gross revenue in 2020. Put up additional 9 different store locations and hired almost 1,000 employees.
As part of sharing the company’s blessings, they organized a program by giving back to the community.
