|The Bahamas Investor Magazine
January 21, 2010
January 21, 2010
Feeding 7,000 guests is all in a day’s work for chefs at Atlantis Paradise Island–The Bahamas’ largest resort. But behind the scenes of the country’s food and beverage sector there is an army of suppliers, producers and merchants making sure the freshest ingredients get to the tourists’ tables.
The US Department of Agriculture (USDA) estimates that around 10-15 per cent of total tourist expenditure in The Bahamas is devoted to food and drink, making tourism a major driver of the country’s food and beverage industry. With hotels and restaurants throughout The Bahamas catering to around two million tourists a year, the sector is undeniably a substantial contributor to the national economy.
Whether it is a question of catering to tourist tastes or encouraging visitors to “go local” and sample dishes such as grouper or conch salad, sourcing supplies is an important part of the process.
Mark Percival, vice president of culinary operations at Atlantis, says that the resort prides itself on using local produce where possible.
“We use as much local produce as we can. It works for us because we pay duty on everything imported, but we also want to support the local farmers and encourage them as much as we can,” he explains. “This is not a self-sufficient island, so the farming industry would have to take a step forward. There are signs of encouragement though; people out there are trying.”
At Atlantis, which employs 730 cooks and 145 culinary managers, the culinary department not only has to deal with the daily guests but also occasionally provides for large-scale events such as the Miss Universe competition, which the resort hosted in August 2009.
“The biggest challenge with us is the sheer volume of product needed. We ordered the food in advance for Miss Universe. Planning that kind of event usually takes around three days. There are only a couple of major events though. It is more feeding on a daily basis that is the challenge,” says Percival.
Supply chain management
The same challenge faces the director of purchasing and supply chain management at the resort, Christopher Duncombe, who says that Atlantis imports just 20 per cent of its total food needs–mainly specialty goods, non-local fish and processed meats–and relies heavily on local producers. “The biggest benefit with using local suppliers is having a consistent source of product available to us when we need it and therefore I do not have to stock as much in the warehouse.”
Duncombe estimates that the Bahamian food and beverage industry derives around 80 per cent of its business from the tourism sector. He claims that the major obstacle to a more profitable industry is a local supply chain that has developed around the retail market rather than food service and fails to take into account the demands of servicing a large resort. “Most suppliers have their foundations in retail, where it is not as noticeable if a product is not available. Our problem with non-supply is that it affects our customers’ satisfaction, their experience of not only Atlantis but also The Bahamas in general,” he explains.
Duncombe also believes that The Bahamas is missing out on promoting its locally grown produce and delivering unique fare to tourists. “We as a nation need to focus more on the things that are indigenous to us. Local farmers should be producing these, and we need to sell our culture.”
Rory Shepherd, operations manager at Marley Resort and Spa, believes that there is a definite market for more local dishes. “Visitors are looking for more native, authentic cuisines–things so they can say ‘I went to The Bahamas, and I had an experience.’”
Marley’s restaurant, Simmer Down, has been in business since June 2008 and, in keeping with the Bob Marley-driven theme, specializes in mainly Jamaican and Bahamian cuisine. Although this highly specialized menu is an important part of the service to tourists, it can lead to problems with sourcing ingredients and finding suppliers.
According to Shepherd, Simmer Down, which feeds around 200 diners a week, uses local suppliers for around 70 per cent of its needs but relies on imports for the remainder. “Availability is a challenge because of our specialized menu. We need some herbs and spices that are not available in The Bahamas,” he says.
As the tourism sector begins to feel the repercussions of a marked decline in vacationers, so too will the food and beverage industry. George Myers, a pioneer in the food and beverage industry in The Bahamas and chairman and chief executive officer of Myers Group Ltd, which owns a raft of Bahamian eateries including Luciano’s of Chicago and Anthony’s Grill, says: “The Bahamas is tied directly to tourism and that makes or breaks everything that goes with it.”
According to The Bahamas Department of Statistics, the restaurant industry declined by 4.7 per cent in 2008, indicating that even this relatively secure sector has been feeling the pinch in uncertain economic times.
“Restaurants need to tighten their operational belts, ensure that they are very careful how they make any capital expenditure and look at all of their costs while we get through these difficult times,” says Myers.
The business mogul, who also owns Burger King, KFC, Quiznos and Dunkin’ Donuts franchises in The Bahamas, is optimistic about the future, however. “In 2010 things will start turning around. The tourist winter season this year will be better than 2009. We will start seeing a return to normality during the course of next year and hopefully, by 2011, will be a lot closer to the way we were.”
While the tourists may return, it is inevitable that when they do they will be watching their wallet. Percival says that, although Atlantis has not seen any dip in the performance of its restaurant businesses, he has noticed a change in buying habits. “Customers are now more conscientious, and they are looking for deals. People are not buying the high-end items. The recession has even affected wine sales. In Aura [Atlantis’s nightclub] we don’t see people buying full bottles any more. They are going for the half bottles.”
Consequently, restaurateurs are looking at new ways of enticing clients into their eateries. “We need to get smart and look more at what we are doing,” says Shepherd at Simmer Down. “We are going to be getting more creative with the menu. For example, we are going to introduce a special pasta evening. People gravitate to Simmer Down because of what we provide in our menu. Our touch is different. If we continue to keep people interested they will come. You have to set yourself above, and apart from, everyone else.”
According to The Central Bank of The Bahamas, average food and beverage costs rose 8.3 per cent between June 2008 and June 2009. This increase has put pressure on the industry’s key players to find the best deal while maintaining profit margins.
Duncombe notes: “We have to watch the market and take advantage of what it yields. Our volume at Atlantis gives us some muscle to negotiate and dictate what we want to do. Our volume can be compared to the big hotels in Vegas or New York. That gives us a huge advantage.”
Simmer Down, which has a total kitchen staff of eight comprising an executive chef, sous chefs, cooks and stewards, may not have Atlantis’s bargaining muscle but, says Shepherd, it is still able to absorb costs and maintain the quality of its product. “Everything has become more expensive. We have tried to get a balance and not pass the expense on to the customer.”
Encouraging Bahamian producers
Figures from the Department of Statistics show that the country spent $500 million on food imports in 2008. While most come from the US, the country also receives food products from Panama, Puerto Rico and the Netherlands Antilles. This reliance on imports is a natural consequence of the proximity of The Bahamas to the US, its high volume of tourists and the islands’ limited natural resources. It also makes the country particularly vulnerable to fluctuations in the global market.
Minister of Agriculture and Marine Resources Larry Cartwright comments: “As a net importer of food, The Bahamas is, more than most countries, susceptible to the effects of rising food prices and the insecurity of guaranteed supplies of food.”
To bring about a more sustainable industry, the government is encouraging local producers to step up their activities through initiatives such as land lease, a farmer’s credit programme and a crop insurance scheme.
As Myers points out, while many are in favour of such programmes, they are dependent on the participation of farmers and the islands’ natural resources.
“The question is whether or not we can make these projects financially viable,” he cautions.
While The Bahamas may never be truly self-sufficient, local suppliers still have a role to play in grabbing their share of the lucrative market–a market that those in the sector predict will pick up in line with an expected upswing in tourism. “Food prices will stabilize. Demand is coming up and I think the economy and the market will stabilize,” says Rory Shepherd at Simmer Down.
And, according to Myers, who is also chairman of the Nassau/Paradise Island Promotions Board, efforts by the government to help promote tourism in The Bahamas will also help the industry recover. “The public and private sectors are working together, and they are on the right track. It is just a matter of heading it off until the US and other economies return to some normality,” he says.