Keeping the kitchen warm: How catering businesses are adapting to the inflation wave

Dina Ezzat , Saturday 26 Mar 2022

It is this time of the year when Riham Raouf, owner and manager of the Nounette catering business, has to do the year’s biggest shopping. While Nounette caters year-round, it is during Ramadan that this business receives the most orders.


Inevitably, Ramadan in Egypt is a month that is dedicated to gatherings of families and friends. These gatherings are usually associated with the two key meals of the day, either before the fast (sohour) or after (iftar). Since she launched her business back in 2004, Raouf has always been busy around the month of Ramadan given the growing demand, especially during the second half of the 2000s, for full catered meals.

The edge that Nounette offered to her clients, who are mostly on relatively comfortable budgets, has been the atypical. Her roast beef bonbons, the balsamic filet mignon, green rice with pistachios, the Hawaiian chicken and the Thai style fried noodles and shrimps have been in growing demand over the years. This was even the case after the 2011 Revolution when other businesses experienced sluggish growth. This allowed Nounette to grow and the menu to expand.

It has, however, been during the past five years that this business saw a few challenges. First, was the autumn 2016 devaluation of the Egyptian pound that causes prices to skyrocket.

The devaluation made everything more expensive. This, Raouf said, caused a “big drop.” This was partially a function of the fact that some of her clients’ budgets became more strained. Also, ingredients became more expensive, raising the prices of the final products. It was also a function of the increased compensation that the staff required.

At a time when Raouf was hoping to expand the number of staff, she had to cut back. She also had to go back to the cutting board and saucepans herself to make up for the outgoing chefs and sous-chefs.

Inevitably, she said, it was an unavoidable moment of decreasing profit to secure the business’ survival. It also required, she added, a moment of culinary creativity to cut down on the use of imported items and to introduce inviting but less costly items to the menu. Improvisation was needed, but only to a degree.

Ultimately, she said, the reputation of high-end catering counts for a lot and economising cannot be taken all the way.

Once the devaluation hit was slowly absorbed, Raouf said, her recalibration was again compromised with the coronavirus pandemic. It was not just a matter of people meeting up less, it was also a matter of people spending less.

Nounette still had sufficient clients to keep the business going, but a good segment became more cautious with their spending. It was more institutions than individual clients that kept the business afloat during the pandemic.

By the beginning of this year, Raouf said, the basic cost of catering for a big dinner of around 100 people had jumped by close to 300 percent compared to where it was in the early years of her business.

As the country began recovering from the pandemic this year, Raouf was hoping for a new beginning. But there was no such luck; a new crisis hit. “The inflation is serious, really serious… prices have increased so much; I cannot forecast the way business will be like for Ramadan,” she said.

Speaking less than three weeks before the advent of the holy Muslim month, Raouf was already doing her shopping for essentials.

“Boneless chicken, pastas, even the local brands, oils; everything is so much more expensive… and I simply cannot compromise on the quality of the ingredients,” she said.

It is also too late in the season for Nounette to develop a whole new Ramadan menu that would cost less to make and sell. “We have to keep the same menus and the prices will have to be reconsidered as we get done with the shopping,” she said. However, she added, “more and more people are not ordering a full menu but just a couple or a few dishes that they would use as the key dishes of their iftar and they would add up other dishes either of their own making or of the making of the charity groups that have too been in the catering business,” she said.

So, while the average Nounette client will still be able to order her well-liked Turkish or Iranian kouftas or Moroccan chicken with pickled lemons, they would probably have to forgo the mirror salmon or the stuffed mushrooms with cheese and opt for mixed mahshis and samboussaks from a place like Al-Zahraa or Al-Alaa charity organisations that have been operating, respectively, all over Cairo and Giza since the early and late 1990s.

Originally designed to help female-headed households make ends meet, both organisations have diverse operations, of which selling fully or partially cooked dishes is central.

According to Mervat Antar, a key volunteer at Al-Zahraa, who has been in charge of one of their six central kitchens, the profile of their customers has changed. They have been seeing newcomers who might have had higher-end options during previous years. In parallel, she added, many of their otherwise consistent clients have been reducing their orders. Some, she said, have stopped their orders entirely.

Having been in charge of this business for close to 20 years, Antar said that previously most of their clients would be working-class women who would be making consistent monthly orders of either fully or partially cooked meals, cakes and more. “Because we are essentially a charity, our prices are really reasonable with quite a narrow profit margin that helps the ladies working for us to make an income and helps us upgrade our kitchens and delivery services,” she said.

This, she argued, meant that it would always be “quite affordable” for many women with 9-to-5 jobs to get Al-Zahraa items. Some, she said would get enough items for their families and for their older parents as well. During the years between 2005 and 2010, Antar said, the business grew and diversified significantly.

“We shifted from a limited menu to a much wider menu with room for special orders. We also diversified our line of pastries and cookies. We even introduced the healthy food line,” she said.

According to Antar the “little shake up” that came with the 2011 Revolution was fast absorbed, while the subsequent wave of Syrians immigrating to Egypt allowed the kitchen she is managing to introduce “a very popular line of Syrian dishes.”

“The Syrian ladies actually trained our cooks to make these dishes and we are still putting them out despite the fact that most of the Syrian ladies who had worked with us left Egypt,” she said.

One tough blow that the business received, she said, was due to the autumn 2016 devaluation of the pound. “People had to think more about how they spent their money because everything became a lot more expensive. We could not reduce the prices significantly [by lowering wages] because this is a charity that is supposed to help women working for it to make enough income to cover for their expenses,” she said.

At the time, she said, the introduction of lower-cost items helped. More chicken and less meat-based meals became the norm. There were also fewer orders of pastries and cookies. However, Antar said it was the years of the pandemic that proved to be really challenging. The slower economy and ambiguity over the future forced people to cut down on expenses, she said. It was also, she added, about the fact that many people were working from home and finding more time to cook for themselves.

There was also the need to maintain precautions against the coronavirus, including the need to socially distance the cooks in the kitchens. “We needed to have fewer people at the same place to avoid any possible infection; this meant a slower pace of production too,” she said. There was also the need to suspend the parallel deliveries of some cooked items from the kitchens of collaborating cooks.

“For sure, we keep a close eye on these kitchens that are allowed to operate in some selected cases of women who need to attend to children or elderly, but with the COVID-19 situation we could not take the risk,” she said.

Cutting down on the working hours for employees would have decreased their monthly wages, which was not an option. Instead, it was nescessary to scale up donations they received. However, increasing donations was difficult as incomes were being strained, she said.

As the pressure from the pandemic lessened, Antar said, they are hoping that business picks up. This, she said, is not just about the income of the working women who are providing for entire households, but also for the sake of the charities, especially food donations, that are essential to the work of most charities, Al-Zahraa included.

“Unfortunately… this shocking increase in prices is bound to force a decline in the orders we get, especially since we will have to raise the prices,” Antar added.

Having already reduced the profit margin with the subsequent challenges of the devaluation and the pandemic, Antar is not in a place to reduce their profit margin any further. “The trouble is that we are not talking about a five or even 10 percent increase in the prices of some basic ingredients; we are talking about no less than 25 percent increase in the prices of all items; some prices have jumped up more than 70 per cent,” she said.

Antar is expecting an increase in the demand for dishes that are not typically on the Ramadan menu including some strictly vegetarian dishes. “I think we are going to see more and more people ordering less dishes with meat and chicken and that we will have to bake and grill more than fry to reduce the consumption of butter, eggs and bread crumbs,” she said.

For Ramadan delights, she said, there will be much less nuts for the filling. “The prices of nuts has soared by more than 80 percent; it is insane. We are going to do fillings of dates, creams or some of the less expensive dried fruits. This will be more popular, I think, simply because it is more economic,” she added.

Amal Al-Sharnouby, the volunteer head of the central kitchen of Al-Ala Charity Organisaiton has been going through the same experience. She too is faced with the double task of preparing a more economical menu and coming up with alternative solutions for food subsidies that the organisaiton provides for hundreds of families whose food security is totally compromised.

For close to 20 years since the launch of the organisation, Al-Sharnouby said, the catering business of Al-Ala has been one of the most successful and profitable operations that helped dozens of women make a stable and decent income and has at the same time contributed to the food subsidies that the organisation is committed to.

During the past five to six years, she added, there have been more downs than ups, including the greater demand for food hand-outs.

“We somehow have managed one way or the other. Our Kito line of food, which caters to the more well-off segment of our clients, was very successfully designed that it sold well enough to keep decent income coming when some of our mainstream clients were cutting down on their otherwise monthly staples,” she said.

Today, like Raouf and Antar, Al-Sharnouby is counting a lot on the shopping interest of this segment to keep the kitchens warm. She too is planning to introduce more economical items to help clients find affordable alternatives for the Ramadan feasts.

She is planning planning smaller portions, more vegetarian dishes and at the same time more high-end special orders for those clients who are moving to this NGO instead of restaurants or high-end catering.

With the end of the COVID-19 restrictions, Al-Sharnouby is counting on the high-quality product she is proud to be putting out to get orders for iftars and sohours from companies who organise group gatherings.

She is planning to “put some pressure” on her suppliers who sell her the ingredients to offer better prices. “I do not go to buy two to three kilos, I buy in big quantities and I deserve a good price,” she said.

A strong believer in the complimentary approach, she might well be planning to do a wider Ramadan whole-sale scheme with other NGOs that work in the same way. “I think this is the moment where we need most to organise our work and to help one another,” she said.

Al-Sharnouby is also planning to appeal to big factories and companies to provide her NGO with “special prices” on wholesale of basic ingredients – if only for the month of Ramadan – so that she can keep the supplies chain working and also keep the charities working.

“It would be otherwise impossible to deal with a situation where the prices of all basic ingredients have seen an increase of no less than 25 percent. How can we cope? How can we provide for the needy? It would be impossible,” she lamented.

Already, during the past few years, “especially during the last two years of the pandemic”, Al-Ala had to come up with alternative Ramadan menu for the hand-outs. “It has been so tough for us to take this decision, but it was becoming a situation whereby we had to either reduce the families that receive our hand-outs or change the menu,” she said.

Vegetarian menus, including something as basic as white cheese, bread and watermelons, are never a Ramadan favourite for most families, especially those who wait for the holy month to receive the highly nourishing meals with stable animal protein. And, having been a volunteer with Al-Ala for over 20 years, Al-Sharnouby knows very well that for some families, Ramadan hand-outs are the only opportunity across the year to get a meal of meat or chicken with vegetables and rice.

“It is, however, a question of the cost of this meal versus the number of hand-outs that we need to put out,” she said. It is also, she added, a question of the donations that are not as forthcoming as they once were.

“It is understandable, if a family used to put out EGP 5000 for Ramadan and this family is faced with an increase of over 50 percent in its food bill, then this extra amount might well come out of this EGP 5000. The fact that the purchasing power of this amount has actually dropped by around 50 percent adds to the complexity of the situation,” she said.

Al-Sharnouby added that it is not just the prices of ingredients that have been on the rise, but also the prices of gas, electricity and water. “Everything has cost a lot more since the devaluation. If I want to fix a stove, it is more expensive. The prices of detergents are a lot more expensive. If I want to replace a food processor, it is so much more expensive; everything, really everything,” she said.

Today, Al-Sharnouby is as worried about the catering business as she is about the food hand-outs and the income of the women who need to make ends meet.

“Corona was a really tough challenge; and now this inflation, it is really tough,” she said.

As a last resort, she said, Al-Ala will allow trusted clients to recieve their orders and delay the payment to the end of the month when they get their pay check. “This might help us secure a decent flow of orders for Ramadan and help the families who count on our hand-outs to be secure and the ladies who work for us to be covered – if only during this exceptional month,” she added.

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