No doubt, the past year has been more difficult for restaurants than we care to think about. But the turning of foodservice on its head hasn’t been completely bad. In fact, it has opened some doors – particularly for nimble, entrepreneurial operators who have a knack for posting enticing food photos on social media and the ability to use tech to set up ordering and delivery. As the New York Times reported recently, there has been an explosion of inventive take-out food concepts on Instagram lately as foodservice operators have begun promoting small, rotating, deliverable menus on the platform – and with success. Some of these concepts are based on ideas that chefs have dreamed of trying for some time, but others are simply a temporary means of keeping money flowing in to pay employees, cover rent and essentially stay in business in some form until the pandemic winds down. Some chefs are even working out of simple home kitchens. Whether you’re in the position to try pop-up concepts like this or not, they are evidence of the newly stripped-down list of resources a restaurant truly needs to function, which are important to remember for the long term. Operating a restaurant is no longer about real estate but about being able to reach your customers where they are – and using the range of tools at your disposal to help. First, focus on making it easy and fast for customers to order from you online. Think about how you can profitably get food to customers – whether by aligning with a third-party vendor, offering a scheduled weekly drop-off of food (ready to eat right away or freeze), or even just making curbside pickup more appealing. Mix up your menu and promote the changes online – when you rotate new items through on a regular basis, you give your customers a reason to look for your updates each week and you naturally create new reasons to post those updates on your social media, website and email newsletter. Finally, take food photos that sing. You can do this on your mobile phone – just opt for warm, natural light, use a reflector or simply a light piece of paper to soften shadows, use color and contrast to make the food pop in the image, and add some simple decorative (or brand-specific) elements to elevate viewers’ perceived experience of eating your food.
Of all restaurant segments, fine-dining restaurants have arguably met with the most challenges in the past year as many of their hallmarks – from a sole focus on in-dining-room service, to higher-touch interaction with staff – became safety hazards practically overnight. But like much of the restaurant industry, there are disruptors within it who are transforming the experience of fine dining for the current times. One new concept, dubbed The Finishing Gourmet, aims to replicate the experience of fine dining in a home-based setting. Restaurant Hospitality reports that a former Four Seasons executive chef is part of the team that conceived the business, which includes the in-house delivery and upscale presentation of high-end foods that are ready (or very nearly ready) to be eaten, along with such additions as complimentary steak knives and even a chef’s torch to add the finishing touches to a crème brulée. The foods are intended to be delivered contactless and, unlike a meal kit, may require just a few minutes of cooking by a home chef (to sear a steak, for example). If your business once relied on in-dining-room service and prided itself on its human touch, how can you offer those benefits to people at home? Taking cues from catering businesses and meal-kit companies may help you identify new hybrid approaches to recreating the experience of dining in your restaurant – or delivering something close to it.
Like constant change? Probably not. Even for those who are more comfortable with change, the past year has likely forced too much of it. But what if you could adjust your mindset and your business so that you could better weather, anticipate and (perhaps) even welcome change? A September TD Bank survey of 250 restaurant operators around the U.S. aimed to take the pulse of the industry and find out what strategies have worked for restaurants that have managed to succeed in such a tumultuous year. Three key findings emerged: Off-premise sales are critical and restaurants need to be able to accommodate them (particularly via such consumer conveniences as mobile ordering and delivery). Payment methods including mobile, online and contactless are helping restaurants encourage consumer confidence. Finally, many of the traditional physical characteristics of restaurants are changing to accommodate drive-thrus and pick-up areas, shift to ghost-kitchen formats and decrease overall footprints. So how can this information help restaurants set themselves in a more powerful, less reactionary position for the future? First, scrutinize your off-premise menu and sales to ensure they are practical and profitable. Then adjust. Get comfortable trying new ideas regularly – it will not only help you see what works and what doesn’t, but it will also give you something new to promote to customers. Next, evaluate your payment methods: Do they help you limit face-to-face interactions with customers and also enable you to expedite payment and get a faster, clearer picture of your sales? Finally, take advantage of this time of disruption. Look for new partners and investors, and talk to bankers, landlords and suppliers to identify opportunities to secure more beneficial arrangements.
Restaurant operators are natural creatives, but who would have thought that the past year would have required so much creativity – less for planning special events and more for just figuring out how to keep business afloat? The past year has hit caterers especially hard – and required near-constant reinvention across the hospitality sector. As we emerge from the pandemic, it’s likely that restaurant operators will continue to need new operating models and diverse streams of income to fortify themselves going forward. How can you make your business as nimble and adaptable as possible for the long haul? It might involve converting or scaling down your existing real estate for new purposes. Perhaps you can convert your food truck into a door-to-door meal delivery service. Or your former events business into a smaller specialty meal-and-dessert service for virtual meetups. Have a team with big personality and ideas? Create a series of YouTube videos that feature them showing viewers how to throw a festive dinner party at home – and offer a corresponding dinner-and-wine kit available for purchase. Becoming a more nimble operation may involve simply adopting technology to help fine-tune your inventory management, minimize waste and manage labor. Returning to business as usual shouldn’t be a long-term plan for any restaurant business, so what incremental changes can your business make this year to create new revenue streams and cushion against future challenges?
“I don’t have restaurants anymore; I have websites.” That’s what Mike Friedman, chef at the Washington, D.C. Italian restaurant Red Hen, told Eater recently. Last summer, Friedman and his partners at Red Hen and two additional restaurants didn’t feel safe bringing guests back indoors to dine – even when it was allowed – and they instead reinvented their business model to fit the times. That has meant making food that practically generates its own online content. On a rotating basis, the partners launch new pop-up concepts around different regions of Italy and offer food and wine from that region for takeout and delivery. The regularly changing pop-ups create new content for their social media and email newsletter. (What guest wouldn’t want to check out how they are integrating Sicilian citrus into their menu or what red wine will be paired with their Tuscan-themed pop-up?) In the current environment when guests aren’t coming to dine inside your restaurant, can you flip the script and make your website, social media and newsletter create the kind of vibe and excitement around your food that you once thought could only be experienced onsite? The benefits of rotating pop-ups include being able to use a simple, scaled-down menu for a set period of time, having ongoing reasons to get in touch with your customers and promote what you’re doing on a regular basis, and securing a steady stream of customers. You can entice customers with new options – and convince them to order from you now, before their current favorites rotate off the menu.
The pandemic has put restaurant packaging under a magnifying glass. That will only increase this winter, with fewer (if any) dine-in guests in your restaurant. Your packaging is what ensures the experience of eating your food is as good at a distance as it is in your dining room. Is yours up to the task? The materials you’re using – as well as your to-go menu – should be adjusting to the times. If items your restaurant is known for don’t travel well – like burgers and fries – make new packaging a priority. While the pandemic has posed seemingly endless challenges for the restaurant industry, it has also sparked innovation – including the development of new packaging options (along with new uses for existing packaging, like paella being delivered in pizza boxes). Eco-friendly options are on the rise right now – and will likely again be more of a consumer demand as we emerge from the pandemic, which has caused many restaurants to return to plastic and Styrofoam packaging for the short term. If you’re making packaging changes right now, consider packaging made from biodegradable materials or easily renewable sources like bamboo, as this report from Stylus explains. As the distribution of the vaccine makes life feel safer, you may also be able to return to reusable containers that guests can return and refill. A recent McKinsey report said post-pandemic, packaging companies will need to think about three requirements going forward: sustainability, hygiene and effective direct-to-consumer design. Restaurants should have a growing number of packaging options available to help them perfect the off-premise experience.
In recent months, consumers have ordered restaurant meals via third-party delivery companies in increasing numbers: Marketwatch reports that throughout the course of the pandemic, food-delivery apps’ business has more than doubled. Restaurants have long regarded these apps warily, weighing the benefits of being able to serve convenience-loving customers against the risks of having a delivery app’s fees dissolve their profits. Those fees aren’t likely to come down anytime soon, but what if other restaurant operating expenses can? Ghost kitchens are helping to make that possible by removing expensive overhead – like décor, prime real estate and large dining rooms – and freeing up revenue for delivery expenses. To be sure, the experience of dining in a restaurant is appealing to consumers (and something they will want to return to post-pandemic), but your food is at the core of people’s desire to order from you. Stripping your business down to its key ingredients – quality food and people who enjoy it – is about having space to prepare it and a means of connecting customers to it. That means locating a professional kitchen (minus the pricey real estate), setting up a technology platform through which people can place orders smoothly, and having a partnership with a vendor who can ensure your food arrives promptly and safely. The pandemic has made ghost kitchens a key growth engine for the restaurant industry at a time when few others exist. Businesses that already have strong brand awareness and delivery customers may find that a ghost kitchen can help them turn a more stable profit. Consider a ghost kitchen an opportunity to test a new concept for minimal investment, or to shift an existing concept to a delivery-only mode for minimal investment (especially if the kitchen is shared by multiple businesses). These kitchens aren’t likely to go away after COVID-19 is behind us – consumers have had too much time to get used to their convenience – so they may be one of many lasting changes to emerge from it. There are many ways to approach them. If you want to discuss whether a ghost kitchen could be right for your operation, contact Team Four.
The winter weather will mean customers will be more apt to lean on restaurant delivery – and third-party delivery apps – to get the food they crave. But as a recent New York Times article reported, “restaurants have quickly found that the apps, with their high fees and strong-arm tactics, may be a temporary lifeline, but not a savior.” That’s especially true when an app can charge fees surpassing 30 percent per order and take customer data along with them. In 2021, how can you set yourself up to encourage your customers to come to you directly when they want to order from your restaurant? If you can’t divert waitstaff to delivery duty, use a third-party provider as a courier service only (which typically involves paying a payment processing fee and delivery fee but not losing any customer data), or make it more appealing for guests to collect their orders. In every bag to be collected by a third-party vendor, include a coupon good for a pickup discount – along with an explanation about how third-party fees are impacting restaurants right now. Offer rotating specials that are only available through orders placed via your website. Finally, use your social media and website to directly urge customers to come to you. Reinforce how much they will save on fees by simply collecting an order from you or (if possible) having you deliver it to them directly. Explain the difference side by side and tell them how much money your business makes or loses depending on how an order is placed – sometimes a consumer’s decision to use an app is not a conscious one and the person just needs to be reminded of how you’re feeling the difference. Your customers have surely seen some of their favorite restaurants close in recent months – and they want to see you survive and thrive. Tell them how to place orders that can best support you right now.
At the time of this writing, the National Restaurant Association had just announced that more than 110,000 restaurants around the country – representing one in six dining establishments – had closed either long term or permanently due to the pandemic. If you’re reading this, your business has likely already developed strong survival strategies, but the winter months are likely to test them yet again as the country manages winter illness spikes and more potential lockdowns. Is your restaurant as ready as it can be? In a recent Restaurant Dive article, several attorneys from the global law firm Goodwin’s financial restructuring group offered guidance to help restaurants weather the challenges of the next few months. Specifically, they said restaurants have two critical capabilities now: their ability to identify and implement practices to enhance revenue and reduce expenses, as well as their ability to connect with stakeholders and create a mutually agreed-upon restructuring plan that maximizes the value of the business and develops a business model that is sustainable in the current environment. As part of this, restaurant operators will need to conduct a thorough analysis of their operations, including calculating all assets and liabilities, and consider potential opportunities for getting concessions from landlords and suppliers, as well as securing external sources of funding. While there are sure to be more restaurant closures ahead before this crisis is over, there will also be opportunities available. Savvy businesses that have a precise understanding of their operation, as well as contingency plans in place to provide help in various scenarios, will be in the best position to seize those opportunities.
If you’ve been in business long enough, you likely have a strong idea of what your ideal customers look like, how they order from you and what they like to see from you. But COVID-19 has changed this in a couple of ways. For one, the pandemic has persisted long enough to have created lasting – or at least long-term – shifts in consumer habits and expectations. The times when people eat, what they eat, and who (and how many) they eat it with have all changed. Further, as we power through what we hope are the final months of the pandemic, recovery from it will be uneven across consumer segments. Older guests may hesitate to dine out. Families may sustain their level of takeout ordering or perhaps dine out more often, particularly if they have spent months at home managing home learning. Instability in the economy may dissuade younger consumers from using discretionary income for restaurant meals and beverages as often as they once did. Or you may not see clear demographic-specific sales patterns overall. All told, if you leaned on hunches or impressions to sustain your business before, you will now need to mine your data and be able to make actionable decisions about it every hour and every day. This will enable you to respond to small, frequent shifts in consumer behavior with promotions and menu items that connect with them – and avoid wasting food and money within your business in the meantime.
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