The New Year is a good time to get your restaurant’s financial affairs in order. As you look to gain greater control over your food costs, the formula you use needs to flex to suit your restaurant category and priorities. Does yours? You could start by calculating the cost of every dish on your menu, but you’ll likely get a more accurate cost of a dish against the overall cost of running your business if you use a target based on your cost of goods sold (COGS). Depending on the type of restaurant you run, that COGS will vary. While food costs tend to fall between 28 and 30 percent of total food sales, they skew higher for full-service restaurants, which sell higher-margin alcohol and include a premium for table service, according to the accountancy and business advisory network Baker Tilly. Orderly suggests several ideal COGS targets based on different restaurant profiles. Full-service restaurants should aim for a COGS in the low-to-mid 30s and may find room to trim costs if they manage their bar costs closely and also monitor market prices of fresh, local produce. Bakeries, on the other end of the spectrum, should have a COGS in the low 20s or below — the same goes for pizza restaurants. The challenge in these restaurants is managing food waste and playing close attention to inventory so you’re not over-ordering or buying ingredients at premium prices. Pizza restaurants have the added challenge of watching market prices of fresh ingredients but can manage that with lower labor costs and the addition of higher-margin items to the menu. Ethnic restaurants should target a COGS in the high 20s. While they benefit from less-expensive ingredients like noodles, pasta and rice, they may need to rely on more specialized suppliers of sauces and spices — that’s where they’re more likely to see costs spike. In general, the more specialty offerings you have, such as premium cuts of meat or hard-to-find toppings or other ingredients, the higher your COGS will rise. That’s okay — it’s just important to look for ways to balance those costs with careful inventory and supplier management, menu innovation (especially at the bar) and labor cost management. (Need help? Team Four can advise you in these areas.)
Go with your gut
As medical research continues to point to digestive health as the foundation for a person’s overall health, both nutrition consultancies and food distributors have identified “gut-healthy foods” as a top food trend for 2019. Food Business News reports that probiotics are finding their way into products such as granola, oatmeal, nut butters and soups. The good news is that it’s easy for restaurants to accommodate the trend. To give your menu a probiotic boost, incorporate cultured or fermented foods like buttermilk, kefir, tempeh, sauerkraut and yogurt. For prebiotic fiber, try bananas as well as asparagus, garlic, leeks and onions.
If you have new or temporary staff on your team, it’s a good time to give a refresher course on avoiding the spread of colds and flu, as well as other germs that can cause foodborne illness. The National Restaurant Association advises operators to provide a handwashing demo to staff, focus on the nail beds and under the fingernails where bacteria is easily trapped, and mention the need for scrubbing, rinsing and complete drying of hands to avoid cross-contamination. Hand sanitizer is a good final step after handwashing but does not replace it. Make sure your food handlers know when and how to report their symptoms of illness — and ensure your managers keep staff informed of the reporting requirements of foodborne illness symptoms, with emphasis on the need to report vomiting, diarrhea, jaundice, sore throat with fever, or infected cuts or burns with pus on hands or wrists. Finally, build a culture in which your team feels comfortable reporting their illness symptoms. You can foster this environment by having regular conversations about how to report symptoms and what follow-up actions to take to prevent the spread of foodborne illness, as well as by placing posters around your facility to remind employees of their responsibility to be forthcoming about symptoms they or other staff experience.
Once holiday feasting is over, New Year’s health resolutions kick in. Do you know how to deliver the kinds of options your guests are looking for? The tactics that work for your restaurant may differ from those that succeed at the restaurant down the street. When you contemplate menu changes, focus less on fad diets than on accommodating lifestyle changes like gluten-free, dairy-free, low-carb or organic diets. Then, consider how your target market thinks. Next Restaurants reports that according to a Numerator survey, the average person who follows Weight Watchers is 65 or older, so building menu options around that plan may make sense if you serve that demographic. Forging partnerships with social media influencers and organizations committed to healthy lifestyles can help too. At a minimum, consider offering nutrition information to show you’re committed to helping guests make their own healthy decisions.
Is 2017 your time for tech?
Even if you’re hesitant to adopt new technology, it affects you, whether through online reviews or the new delivery apps luring your customers to the restaurant down the street. Even if you don’t plan to invest in technology right away, Toast suggests you note where your pain points are. For example, do you have three servers lined up at your point-of-sale system? If so, is that because it’s malfunctioning or unnecessarily complicated to work with? What do your online reviews say about you? Have you responded constructively to negative ones? Are your phone lines busy on Saturday nights, when potential guests might be calling to snag a last-minute reservation? Is your employee scheduling system too time-consuming? Review the parts of your routine that make you procrastinate or struggle. From there, research which solutions are making the biggest impact on the industry and which provider is the best fit for you. If you don’t know what’s available and at what cost, you won’t be able to catch deals that could make the investment worth your while.
Turn the tables
Empty seats at slow times? You can take some steps to fill them. FSR recommends you connect with local businesses – message HR leaders on LinkedIn and develop VIP experiences you can pitch to business leaders looking to make a positive impression on clients. Connect with local Meetup groups who might be able to use your restaurant for their next quiz night or wine-tasting event. Consider joining the gig economy and charging remote workers a monthly fee in exchange for wifi, free coffee and a quiet table to work – you can often find them by contacting your local business registrar and asking for a list of newly launched small companies, or by joining co-working apps like Spacious or TwoSpace.
No farm nearby? No problem
The demand for farm-to-table food has encouraged many foodservice operations to bring the farm to the city. Restaurant Hospitality reports that technology is continuing to fundamentally change how and from where restaurants source their produce, enabling urban farms and traditional ones to work together to meet year-round demand. Hydroponic, aeroponic and aquaponic technology is making it possible for companies to grow food in small shipping containers, on rooftops, in converted steel mills and other locations – and without pesticides, weather concerns or, for some, even soil. The technology is helping producers create the ideal conditions for the growing season and then repeat it at faster intervals so a new harvest is available many times throughout the year. While price is still a barrier for many foodservice operators, a drop is likely as more urban farms enter the market and investments continue from the likes of Costco, Whole Foods and Safeway.
New hospitality apprenticeship program grooms management-level talent
A new hospitality industry apprenticeship program funded by the U.S. Department of Labor is now underway in restaurants and hotels. Nation’s Restaurant News reports that the program was designed to groom more than 400 people for management careers in the industry this year. Last month, the National Restaurant Association Educational Foundation and the American Hotel & Lodging Association signed a $1.8 million contract with the Labor Department for the program, which places workers in paid, management-level positions. So far, the restaurant and hotel partners in the program include Firehouse Subs, Golden Corral, TGI Friday’s, White Castle, DoubleTree, Embassy Suites, Hilton and Waldorf Astoria.
Favorite flavors ripe for experimentation
Foodservice operators like to be on trend – but it can be too easy to become a slave to those trends. Instead, consider adding creative, on-trend touches to ubiquitous favorites. In a report in Flavor & the Menu, culinary development experts say it’s about studying what makes a dish a consumer favorite, then adding depth and dimension to make it your own without straying too far from what people love about it. The report proposes some new spins on four flavors ripe for expansion – Alfredo, Buffalo, ranch and teriyaki. For example, reinvent Alfredo sauce in a rich, creamy dip or a drizzle over tacos. Make a Buffalo rub or vinaigrette for cauliflower, Brussels sprouts or seitan. Use teriyaki to add flavor to bowls, burgers or burritos. Create a Japanese-style ranch with wasabi, pickled ginger and avocado.
What does “healthy” mean to you?
About 64 percent of consumers say “healthfulness” is a driver in making food and beverage choices, according to the International Food Information Council’s Food and Health Survey 2016. If you don’t have a clear story to tell about the health of your menu, your guests will make it up – and you may not like the one they write. Edward Hoffman of the Food and Beverage practice at PadillaCRT suggests you define “health” and what it means for you and your guests before you develop any new, healthy menu line. Does it mean organic? Locally and sustainably sourced? Hormone free? Low in sugar? Smaller portions? Make sure any changes you make dovetail with the most beloved parts of your brand, like your signature burger or loaded nachos. Don’t alienate or confuse guests by scattering a selection of “healthy” options through the menu and hope they’ll get it. Do have a clear story to tell from that and tell it confidently so you’ll be prepared when guests ask about it.
Don’t fear the fat
Sure, imitation fats have been on the way out for some time. But now food preferences are turning in the opposite direction and the whole milk, lard and other fats that were staples in your grandmother’s kitchen are having a renaissance – even getting some press as a perfectly acceptable part of a healthy diet. Datassential reports a rise in fat-infused cocktails, with drinks including duck fat, brown butter and pork fat appearing across the country. These fats are getting more play on the dinner menu as well: The bread course at Cleveland’s Trentina features a wild fermented pane pita served with…wait for it…an edible beef suet candle.
Food safety research likely to face large budget cuts
Food safety experts believe substantial proposed budget cuts to the U.S. Department of Agriculture could make food safety a low priority for the organization, Food Safety Magazine reports. In the 2018 federal budget, potential cuts of $4.7 billion to the U.S.D.A. would drop the agency’s budget to $17.9 billion. Budget items for food safety and international food aid were categorized as discretionary spending. The U.S.D.A. controls the vast majority of food inspections nationwide. While the draft budget does not appear to cut the U.S.D.A.’s Food and Safety Inspection Service, which oversees the safety of meat, chicken and eggs produced in and imported to the United States, funding of agriculture and food safety research has been cut in the draft budget.
Drive-thru business drops off
For many consumers, the convenience of a drive-thru simply isn’t convenient enough. A Mintel analyst says because convenience now means technology, mobile apps and delivery, drive-thrus are taking a hit. While there has recently been a 2 percent uptick in snacking purchases from drive-thrus between 2 and 4 p.m., NPD Group reports, that increase hasn’t been enough to offset the drop-off in drive-thru business at lunch. The gig economy is playing a role as well – people who work from home can eat at home more cheaply, or, if they crave restaurant food, can usually summon it with a few taps to their Smartphone.
UberEats launches analytics to improve restaurant delivery
Uber Eats is releasing an analytics platform to restaurants participating in its food delivery service, TechCrunch reports. Skift says just as restaurants analyze their online reviews and point-of-sale data to improve their performance, they could use this new platform and apply similar metrics to improving delivery service. UberEats has expanded quickly in cities throughout the world to capitalize on its name recognition in an increasingly crowded market. Skift predicts the new analytics should help restaurant partners but also help UberEats assess how its service has been impacting customers to date.
Strategies to thrive in 2017
It looks like 2017 will be a low-growth year for the restaurant industry. To stay the course, Foodable recommends you raise your operation’s game in these areas: Embrace social media marketing and use it less for selling and more for engaging with your guests – consider Snapchat, Instagram Stories, Instagram Live and Facebook to bring video to your guests. Ensure you have a top-tier team, which means releasing bad hires, training well and always looking out for new talent. Make your menu a profit machine by costing out your food, analyzing your product mix report from your point-of-sale system and updating your menu pricing at regular intervals. Finally, be careful about entering the discount game – choose your offers carefully. Foodable suggests value-driven appetizers or a three-course prix-fixe menu on slow days, for example.
Produce is the new protein
If you’re looking to build a better sandwich (or provide non-salad options for health-conscious guests), many chefs are demonstrating that vegetables can be a key attraction in sandwiches – either alongside meat, fish or poultry or in place of it. Flavor & the Menu reports that at Oak + Char in Chicago, one of the most popular sandwiches is filled with stacked smoked eggplant, pepper jam, curried chickpea mash, smoked cilantro yogurt and Upland cress. Other chefs are stacking plantains and testing combinations like roasted cauliflower and peppers with Vidalia onions and shallots. At Plenty Café in Philadelphia, a housemade tasso ham baguette with spicy aioli was transformed into a mega-hit when the chef added sliced tart apples, fig jam and melted Gruyère. Experiment with produce to add crunch, meaty texture or unexpected spice to a dish.
New superfoods on the horizon
Consumers are showing signs they want nutritious foods that make them feel good about what they consume all year long. Datassential, which tracks “functional” foods that promise a healthy heart, along with boosts in energy and brainpower, has predicted three categories of superfoods we’ll see more of in 2017. Look for the next kale in algaes like spirulina and chlorella, which often appear in detox drinks (or even with alcohol for a saintly spin on cocktails). Aquafaba, the thick chickpea-soaking water, is a close substitute for egg whites and is adding frothiness to cocktails and condiments. Sprouted grains are being touted as an easier-to-digest, high-protein alternative to whole grains in pasta, bread, pizza crust, cereal and more.
Spices and stealth food risk
Spices from around the world can give your menu the authenticity and flavor guests crave – but food safety risks are bringing the industry under increased surveillance by the FDA and CDC, Food Safety magazine reports. There are approximately one million Salmonella infections per year, which is a high estimate compared to the relatively low discovery of outbreaks, the report says. That has led experts to believe that many of the illnesses are coming from “stealth” foods used at low levels in a variety of applications, such as spices in condiments and garnishes. It’s a good time to ensure your suppliers have sufficient sanitation practices and training programs in place, as well as hygienic equipment design and repair practices.
Weigh in on healthy food labels
The FDA just extended its deadline for accepting public comments regarding the use of the term “healthy” on food labels. Food Safety News reports that the FDA wants the new definition of the term to be specific due to push back from the food industry on existing law concerning use of the term. Currently, for example, eggs cannot be labeled “healthy” because of their cholesterol and saturated fat content, even though they are recommended in the 2015-2020 Dietary Guidelines for Americans. You can submit a comment at https://www.federalregister.gov/documents/2016/12/30/2016-31734/use-of-the-term-healthy-in-the-labeling-of-human-food-products-request-for-information-and-comments#open-comment until April 26.
Protect yourself against wage and hour violations
In the past 30 years, the Department of Labor has prosecuted more than 23,000 foodservice operations for wage and hour violations, resulting in the industry having to pay $247 million in back wages and civil money penalties, Toast reports. Many affected establishments simply failed to follow complex rules. With minimum wages in flux, it’s critical to know where related violations can crop up, such as in tracking employee time over multiple restaurant locations, irregular employee scheduling, poor record keeping and violating the minimum wage. To protect yourself in a dispute, Toast recommends you move quickly and cooperate, with the goal of resolving problems without litigation (or starting litigation without delay). If you have violated the Fair Labor Standards Act knowingly or not, you will likely owe money in damages, so know your value and what you can afford. Finally, take corrective action right away with systems to prevent ongoing problems.
Restaurant outlook for 2017 favors quick-service
If you’re a quick-service restaurant, you’re among the lucky ones: NPD Group predicts the sector will experience 1 percent growth this year, full-service restaurants will see a 2 percent decline and the industry overall could see little to no traffic growth. To buck that trend, Bonnie Riggs, NPD Group’s restaurant industry analyst, suggests operators stay relevant in consumers’ minds, focus on innovative products and promotions, provide a good value and demonstrate the benefits of the experience of eating a restaurant as opposed to staying home. CNBC suggests watching these brands, which have fared better in recent months: Domino’s (revenues were up nearly 17 percent in the third quarter over the previous year), as well as McDonald’s, Starbucks and Wendy’s.
The power of your public
You know it’s important to have a compelling story behind your food and to promote it well to the public. But chefs Roy Choi and Daniel Patterson recently learned exactly how critical that can be when New York Times food critic Pete Wells awarded zero stars to the chefs’ Oakland, Calif. Restaurant LocoL, the quick-service restaurant that aims to bring wholesome, fresh, affordable foods to underserved neighborhoods. Eater reports that while Wells had earned popular support after withdrawing two stars from Thomas Keller’s famed Per Se restaurant last year, he generated serious social media backlash with his treatment of LocoL. One reader said his review was akin to booing at an elementary school musical, while others suggested he “take on soup kitchens next.”
Voice-ordered food to your door in less than an hour
Amazon continues to push the limits of food technology. The company just announced that its Prime customers can now order food via voice command from Amazon Restaurants on Alexa-enabled devices and have any meal they’ve ordered previously delivered for free in less than an hour. A customer can say, “Alexa, order sushi from Amazon Restaurants,” and the service pulls that customer’s order history from a specific restaurant or cuisine type and lists meal options available for reorder. The selected meal is then sent for delivery to the customer’s default address. The new option allows customers to reorder food from any restaurant available on the service in more than 20 cities.
Investing in tech-assisted food ordering
Among 18-to-34-year-olds, 77 percent want or expect mobile ordering at quick-service restaurants and 83 percent feel the same about fast-casual outlets. In the Middle East and Asia, a majority of consumers report being able to do just that – but the percentage falls to just 32 percent in North America. That’s according to Technomic’s 2016 Future of LSR: Fast-Food & Fast-Casual Consumer Trend Report. The U.S. lags behind Asian and Middle Eastern countries when it comes to tech-assisted ordering programs due to the expense of investing in technology in a low-margin business. But the risk may pay off: According to the data, U.S. consumers choose delivery or takeout for 51 percent of all foodservice needs – that is a bit more than in Asia and only slightly less than in the Middle East.
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