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Vaughan Rising Blog: Vaughan’s Restaurant Industry Maximizes the Moments of Opportunity

On March 17, 2020, the Government of Ontario declared a state of emergency to combat COVID-19. Measures included prohibiting organized events of more than 50 people, shutting down schools, and closing bars and restaurants.

The government offered restaurants lifelines along the way:

  • Takeout and delivery from the beginning,
  • Patio service in June, and
  • Socially distanced dining room service in July.

Unfortunately, despite these measures, a Restaurants Canada survey conducted in July revealed that most restaurants were still losing money and could take a year or more to return to profitability.

In Vaughan, some restaurants have chosen to close either temporarily or permanently, but many have made adjustments to keep operating under the new rules.  Other restaurants have taken a bolder approach. Not only have they stayed open, they maximized every opportunity to develop new products and services. Giro d’Italia, an Italian restaurant in Concord, is one example of the latter and they were willing to share their experience.

Five ways Giro D’Italia found opportunities amid pandemic uncertainty

1. Keeping up with world events and industry pivots

“We had expected something like the lockdown as several countries in Europe, including Spain, France and England, had already gone into lockdown. So, we had a feeling that it was coming to Canada too,” says Michele Pellegrini, Head Chef at Giro D’Italia Ristorante.

Yet the lockdown was still a pretty dramatic moment, filled with doubts and a cloudy future. Nobody really knew what was going to happen, whether the restaurant could survive, and even if the staff would decide to stay. The lockdown created a lot of questions.

The restaurant closed down with no end in sight, but Giro was not ready to give up. He confesses, “I’d been home for 10 days, but honestly after three days I was already very agitated. I am a very active person. I have to have something to do.”

About 15 to 20 days after the start of the lockdown, Michele spoke with a friend of his in Italy, at a restaurant where he used to work, and heard that they had started doing some takeout and catering.

2. Adapting current offerings to changing circumstances

Giro D’Italia also had clients asking why they weren’t doing takeout, saying, “We miss all your food.” The team decided to quickly come up with a short menu to fall in line with what many other restaurants were doing and to offer loyal clients the chance to have some of their dishes.

“I’m blessed because I have a fantastic staff,” explains Michele. He talked his takeout ideas over with them and asked how they felt. A few decided to give it a try.

Giro D’Italia had never done takeout before, and the staff didn’t know if their dishes could survive the delivery window. They experimented. Michele tells the story, “Every customer loves our shrimp and calamari. One day, we made a few portions and I drove around for 15 to 20 minutes with the fish in my car. It was completely soggy. Obviously, when you eat the food at home it must be the same. This is the first thing I discussed with the staff. We need to come up with some dishes that will be decent after being picked up or driven 20 minutes for delivery.”

They worried that if it wasn’t the same, they would lose their long-time customers. After some experimentation, they were able to create a selection of dishes that remained consistent after 15 to 20 minutes. Customers loved the new takeout-proof menu. Michele and his staff even expanded it to include new products such as family-sized meals and make-your-own pizza and pasta boxes.

3. Creating new offerings to meet emerging demand

In addition, Giro D’Italia staff started up Giro Mercato to meet the demand for Italian grocery staples. Giro Mercato evolved out of the existing takeout to accommodate requests from customers for grocery items. People were phoning and asking if Giro could provide yeast or a bottle of wine with their takeout order.

Instead of waiting for people to ask for additional products, they decided to offer the Giro Mercato service. “We came up with a list of groceries. Honestly, it was very good in terms of cost for the customers, because we’re not a market or grocery store, we only added about 10 cents to every product such as herbs and pasta. We started to sell our own pasta, which is something I’m really happy about. We made nice packages with homemade pasta and it started to sell,” shares Michele. “At the moment the ideas come from the request of the customers. We just adjusted our business idea around the situation.”

All of these steps were enough to hold on to core clients and keep the restaurant afloat, but, compared to before, business was still slow. However, this rare stretch of quiet time did have a silver lining. They developed a new supplier list, an inventory system, and experimented with new dishes.

4. Restructuring physical space to stay relevant and inviting

Then, as lockdown lifted, patio service became a possibility. Giro D’Italia didn’t have a patio, but they built one in the parking lot to maximize the opportunity. “We never had the chance to have a patio. Now the city has allowed us to have a patio for a few months. The first weekend was very successful, and the people enjoyed staying until late. Now we’re working on a lounge area, where people can chill out.”

With a lounge, people won’t need to come just to eat a full meal. They can also come after eating at home to sit and have a drink with appetizers and lounge music. It’s important to Michele to give people a chance to enjoy life in this situation that is new for all of us.

At the moment, Giro D’Italia is able to open for dine-in service at 50% capacity but no one knows how long that will last as the cooler weather arrives and the possibility of a second wave of the pandemic looms.

5. Continuing to re-evaluate and respond as circumstances evolve

If a second wave comes, restrictions will return. But Giro isn’t necessarily going to rely on the initiatives that worked during the first wave.

Michele admits, “I don’t know how the people will react. In the first wave, we had this big boom of takeout, this big boom of everybody starting to bake, cook at home, order wine. But if this happens again in another couple of months, I don’t know what the general reaction will be. Because the first wave was completely new, a situation that nobody had ever lived through, the reaction was built in progress. For the second one, I personally don’t think in general the people will have the same reaction. It will be more frustrating and depressive. It will be more complicated and harder to handle. As a business, you can have all the ideas you want, but if it’s not the right moment, it doesn’t work.”

It was the right moment for Giro’s takeout, grocery, and patio. He advises, “You need to just be flexible and adjust your work to the situation.”

Maintaining resilience in the face of future challenges

So that’s what’s next for Giro D’Italia: watching for the right moments and rolling with them. Already, since the interview in July, they saw an opportunity for a catering business and for offering personal chef services for home-based private events. The team is also working on some other top-secret ideas, but we’ll have to watch and wait to see more examples of this resilient Vaughan business pivoting, innovating, and doing what it takes to get to the other side.

 

The information presented in this article is provided solely for the purpose of bringing ideas to the attention of the business community, as a service to the businesses of the City of Vaughan.

The City of Vaughan does not, whether directly or indirectly, endorse, sponsor or sanction the opinions expressed in this article, nor any services or products that may be offered by the contributor/s in their normal course of business.  The City of Vaughan does not intend by this article to recommend the contributor/s nor to promote them as subject matter experts over any other business persons employed or engaged in similar lines of business.

 

Vaughan Rising Blog: Canada-U.S. Border Restrictions – Practical Q and A with BDO

The Canada-U.S. border has been closed to non-essential traffic since March 21. As intended, the restrictions have resulted in a drastic reduction in movement across the border to lessen the spread of COVID-19.

According to data obtained by Postmedia, between June 15 and June 21 just 170,998 people entered Canada at a land crossing with the U.S. — and of that number, 104,247 were truck drivers. Over the same period in 2019, more than 1.2-million people travelled through a land crossing from the U.S. into Canada – more than seven times the figure from this year.

What does this mean for cross-border business?

To find out, the City of Vaughan consulted two experts on Canada-U.S. border protocols:

  • Charmaine Goddeeris, Senior Manager in the Customs and International Trade Practice, BDO Markham – Her more than 20 years of professional experience providing customs and international trade consulting services for clients in a wide range of industries has earned Charmaine the position of trusted advisor to importers and exporters in a multitude of trade matters, including customs process reviews, valuation, tariff classification, rules of origin, marking, drawbacks and refunds and free trade agreements.
  • Doreen Buksner, Senior Manager, Immigration Services, BDO Toronto – As a Regulated Canadian Immigration Consultant and Senior Immigration Manager, Doreen has worked in corporate immigration for eight years with a large international immigration firm.  She brings a wealth of knowledge and experience with respect to temporary Canadian immigration matters, having focused her practice on visitor visas, work and study permits and inadmissibility issues to assist businesses in fulfilling their relocation needs.
What are the current restrictions regarding business travel and goods movement? What has changed since the pandemic started?

Doreen Buksner: There have been five areas of change for business travel:

  • Essentialness test: Customs officers are granted a great deal of discretion to determine if travel is essential. There has been a wide range of interpretations and inconsistent application of the “essentialness test” at various ports of entry.
  • Quarantine protocols: Most travellers are required to quarantine upon entry to Canada. Employers are expected to pay for expenses and salaries during isolation. Immigration conducts compliance checks within days of arrival to ensure adherence to the quarantine plan presented by the traveller on entry. Non-compliance can result in significant fines to both the employee and employer, depending on the individual facts.
  • Foreign national exemption: Foreign nationals who hold a work permit are exempt from the travel restrictions; however, they must also prove that they have ongoing employment in Canada. Merely holding a work or study permit is not sufficient.
  • Port of entry applications restricted: Foreign nationals who are generally able to apply for a work permit at the port of entry must now apply in advance at a visa post abroad. They will not be permitted aboard a flight without approval from the visa office.
  • Appointment to get a permit: Some ports of entry are taking appointments to ensure a reduced number of applicants in the office at any given time.

Charmaine Goddeeris: In regard to the movement of goods in Canada, there has been very little change since the onset of the COVID-19 pandemic. All of the requirements that were previously in place (i.e., licensing and permits) are still applicable but have not been tightened. The critical thing to remember is that any time you are importing goods into Canada, you must do your due diligence before importing or you could face delays at the time of import or even denial of entry of the goods. All importers, especially of food and children’s items, must take care to obtain the correct licences and permits.

What kinds of business travel are essential vs. non-essential?

Doreen Buksner: Actual work at client or company sites is permitted, irrespective of industry or profession. Workers in food production, agriculture and transportation are considered essential and receive priority processing. Business meetings are typically considered non-essential as they can be conducted virtually.

Some companies are required to send their Canadian staff to the U.S. to manage projects (e.g. I.T. or construction related). Are they allowed? If not, what are some alternative solutions?

Doreen Buksner: It depends on which visa category they are being sent under. U.S. President Donald Trump announced a proclamation in late June restricting visa applications under L1 (intra-company transfer), H1B/H2B (specialty occupation and non-agriculture workers), and J1 (interns, caregivers). Canadian citizens are exempt from the proclamation and may be eligible for other visa categories, including E (treaty and trade) and TN (professionals under the Canada-United States-Mexico Agreement, or CUSMA). Citizens of other countries currently residing in Canada, including Canadian permanent residents, tend to be more restricted in their U.S. visa options.

If workers are deemed essential (from Canada to the U.S.), is quarantine required upon returning to Canada? What is the protocol?

Doreen Buksner: Workers in essential businesses or jobs are exempt from the quarantine period on their return to Canada. They are strongly encouraged to abide by all other protocols, including limited daily travel, wearing PPE, maintaining physical distancing and self-monitoring.

Are there certain sectors where there has been a drastic swing in trade, either positively or negatively?

Charmaine Goddeeris: All sectors of the economy have seen a significant decline in trade since the onset of COVID-19, from manufacturing to retail and consumer goods, and this appears to be the trend until mid-2021.

Many manufacturers that I advise closed temporarily in mid-March, and workers were instructed to stay home. If no manufacturing was happening, then there was no need for the importation of manufacturing inputs. This was most evident in the automotive industry, a staple of the Canadian economy. This part of the economy is rebounding now in the Canadian market as workers are back on the job, and the economy begins to ramp back up.

What trends are you seeing in supply chain pivots? (e.g. more diversified sourcing, etc.)

Charmaine Goddeeris: We are seeing two trends, and they’re both evolving. One is purchasing products closer to home (“Buy Canadian”). The other is finding creative yet legal ways to enter the U.S. market with the lowest possible duty costs. We are seeing that foreign companies are choosing to set up manufacturing facilities in Canada as a way to sell their product into the North American market by using the benefits of the newly enacted CUSMA.

What percentage of businesses would you estimate have a contingency plan in place?

Charmaine Goddeeris: Unfortunately, this number continues to be very low. The global trade landscape is more volatile now, and punitive duties can be put in place in as little as 30 days, as we have seen and continue to see. Companies need to either ensure their bottom line can weather any increases in duties or have backup suppliers waiting in the wings.

Has there been a price change for the logistics/distribution cost due to the restrictions? If there was a spike in the beginning, is there an indication that it’s coming down?

Charmaine Goddeeris: I have seen a spike in the cost of moving goods by air. A large amount of airfreight is transported in the bellies of passenger airplanes. With the decline of available flights, importers are experiencing difficulty in finding planes to move their goods. When they can, the prices are much higher than in the pre-COVID-19 world. I do not expect this upward trend in airfreight costs to change any time soon.

Are you seeing any other major issues?

Doreen Buksner: Canada relies heavily on immigrants and foreign workers to contribute (new) skills and innovation and to fill labour shortages. The government has responded quickly to address immigration issues and ensure that Canadian businesses can survive, and even thrive, during and after the pandemic. By contrast, the current restrictive approach in the U.S. is pushing many companies to house their specialized workers in Canada as an interim measure. Canadian companies are also taking the opportunity to source talented foreign workers who have been denied U.S. visas.

Charmaine Goddeeris: The major issue has been and continues to be uncertainty. There’s the uncertainty of when we will return to a new, or at least next, normal. There’s the uncertainty of new or escalating trade disputes between powerhouse countries. It has always been my advice that companies have plans in place for worst-case scenarios so that they are prepared for hiccups in supply chains or increased duty charges and are able to pivot quickly.

Any recommendations or tips for businesses to plan their distribution in the U.S.?

Charmaine Goddeeris: Companies need to fully understand the global landscape as a whole and how their business can grow within that landscape.

My advice is to start by reviewing the obvious and often overlooked things, like the information which will be reported to customs regarding your imports. An error in key pieces of information could lead to an overpayment of duty and additional costs. Remember, if you are competing with U.S. companies that manufacture or purchase goods in the U.S., they will not have duty costs and will likely be able to sell products at a lower cost which can make you, the importing distributor, not as competitive.

If you are selling to the entire North American market, consider using Canada as the distribution hub, and not the U.S. That way you only pay duties on the goods destined for the U.S. market and not all goods.

When will the restrictions be lifted?

Doreen Buksner: I do not foresee the restrictions being lifted in 2020. I predict they will reopen in spring 2021, assuming the U.S. can contain its current cases of COVID-19 and avoid a second wave in the fall or winter.

The outcome of the U.S. presidential election will also be a determining factor of how quickly the borders will be able to reopen.

Learn more

The information in this article is current as of September 8, 2020.

For more information about how the Canada-U.S. border restrictions affect your business, please contact the City of Vaughan’s Economic and Cultural Development team.

The contributors can be reached via the coordinates below:

Charmaine Goddeeris

Senior Manger – Customs and International Trade Services
BDO Markham
905-946-1066
cgoddeeris@bdo.ca
https://www.bdo.ca/en-ca/our-people/charmaine-goddeeris-1/

Doreen Buksner

Senior Manager, Immigration Services
BDO Toronto
416-369-6128
dbuksner@bdo.ca
https://www.bdo.ca/en-ca/our-people/doreen-buksner-1/

 

The information presented in this article is provided solely for the purpose of bringing ideas to the attention of the business community, as a service to the businesses of the City of Vaughan.

The City of Vaughan does not, whether directly or indirectly, endorse, sponsor or sanction the opinions expressed in this article, nor any services or products that may be offered by the contributor/s in their normal course of business.  The City of Vaughan does not intend by this article to recommend the contributor/s nor to promote them as subject matter experts over any other business persons employed or engaged in similar lines of business.

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