Rising labor costs are forcing all restaurant operators to make tough decisions about how to manage staff and how to prepare the food they serve. But what happens when the decisions you have to make are central to the brand identity your guests associate with you? Case in point: Chop’t. The fast-casual chain is known for chopping salad in front of the customer, a practice that provides some visual intrigue while sending the message to guests that their food is freshly prepared according to their tastes. But the company announced recently that it would be making the switch to pre-chopped ingredients. (Guests can still have their salad chopped but have to request the service.) Darren Tristano of FoodserviceResults predicts that regular guests could be turned off by these changes — in the short term — but will probably forgive the changes and return to old habits eventually. Just the same, if you’re experiencing a similar need to cut back on services that are central to your brand and important to your best guests, what can you do? A well-executed loyalty program may help you bridge the gap. Chipotle, for example, recently unveiled a new digital loyalty program designed to both give guests what they want and continue to collect customer data that will help the brand feed future decisions that will keep guests engaged. Skift Table reports that the new loyalty program, which was market tested for months, awards guests with free chips and guacamole after one purchase. Each $10 purchase earns guests one point and after $125 spent, guests earn a free entrée. These enticements are encouraging more visitors to sign up for the loyalty program — and share their data in the process. From there, Chipotle can study what factors bring those guests back and make them spend more money, whether it’s discounts on certain items or special promotions. What can you do to keep your guests coming back?
A growing number of fast-casual restaurants are becoming less about having guests stay and eat and more about letting them pick up food to go or have it delivered. Eatsa, the fast casual bowl concept that pioneered the idea of automating food to go, is now focusing on helping many of these fast casuals launch virtual restaurants, which can help brands test potential concepts or service models with minimal investment. The Spoon reports that Eatsa’s new tech offering, dubbed Omnichannel Intelligent Queue Software, can calculate the exact status of an order, send customers a down-to-the-minute update, and alert delivery drivers about the exact time to pick up an order so it doesn’t wait for long. When a driver arrives, a branded pickup station directs the person to the specific order that needs to go. (Deliveroo is the first customer to put the new Eatsa tech into practice at its 10-kitchen food hall in Singapore.)
A Harvard Business School study found that by increasing customer retention rates by just 5 percent, profits will climb anywhere between 25 and 95 percent. It pays to identify your regulars and find ways to keep them coming back. Katrina Kutchinsky of KK Communications, a public relations and social media agency focused on the hospitality industry, told OpenTable she recommends restaurants focus on offering added value over any type of discount. So once you have regulars who have already joined your email list and your loyalty program and you’d like to go the extra mile to take care of them, taking after-dinner drinks or dessert off their bill may go further than offering them 10 percent off their next visit. (This also makes your specific experience harder for competitors to copy.) There are other ways to build value into the experience you offer too. Offering free samples of a new appetizer, a bookshelf of donated books or games accessible to guests waiting for food, tableside entertainment, live music offered by musicians from a local college, or small gifts for children and for special occasions like birthdays and holidays can all communicate value as well. You don’t even have to spend money to generate value: Create memorable ways to involve guests in your decision-making, like asking them to vote on a variety of dishes you’re considering adding to the menu. Or simply be present. Having your manager make a brief stop at a table to ask for feedback or help with a concern, or to invite guests to take a post-meal survey or join your loyalty program — can go far in helping you demonstrate that you care about guest preferences.
Hospitality Technology’s 2018 Restaurant Technology Study found that 45 percent of operators said they planned to increase their spending on back-of-house software — up from 25 percent the year before. The key factors driving that spending were the need to provide better service, manage rising labor costs and consolidate disconnected technology tools used within their business. Nation’s Restaurant News reports that Arby’s Restaurant Group has been rolling out technology that has been addressing those specific pain points. They installed mobile app-connected HVAC systems that can generate monthly usage reports, as well as automated cook and hold ovens, Bluetooth-connected ovens that “can sense when the roast beef is perfectly cooked,” and hardware that can make it possible for traditional kitchen equipment to send time, temperature and cooking data to the cloud. Peter Cryan, senior director of equipment innovation at Arby’s parent company, said the savings have been dramatic. The cook and hold ovens alone have saved the restaurants 67 percent in energy each year, two hours of daily labor related to checking manual processes, and $45 million in energy costs since the changes began in 2011. Cryan said the tech platform more than paid for itself in the course of a year.
It’s easy for a buffet to become a breeding ground for bacteria, and the foods that a guest might not question if left out for more than a couple of hours — rice, sliced fruit or cut greens, for example — could spread illness if not monitored carefully. These foods are considered Time/Temperature Control for Safety foods. Statefoodsafety.com says these foods, which are high in carbohydrates or protein, slightly acidic or neutral, or contain moisture, are especially susceptible to bacteria contamination. While there are some foods on the list that are easy to guess, like meat, seafood and
dairy, make sure your kitchen staff are well aware of the others on the list that need to be monitored carefully and replaced regularly.
…Make some changes in your kitchen. As warm weather approaches, your kitchen and staff need to be able to adapt to the heat. Even if you’re careful about keeping your food preparation area clean and avoiding cross-contamination, the simple act of sweating can cause rapid multiplication of bacteria that can contaminate food. Make sure your kitchen is well ventilated, and train kitchen workers to wash hands and change gloves frequently, and to not handle food unnecessarily.
Environmentally friendly packaging is rapidly becoming the rule rather than the exception. Case in point: Some of the largest foodservice brands in the world — including McDonald’s, Wendy’s and others — have joined forces in an effort dubbed the Next Gen Cup Challenge to identify a cup that’s easily composted or recycled. Fast Company reports that most of the hundreds of billions of paper cups that end up in landfills each year are coated with a layer of polyethylene that makes them great for holding liquids but poor for the environment. Companies from around the world have submitted designs and 12 have been selected to share a grant that will enable them to test and mass-produce their cups. Brands will begin testing contenders in September, so watch them for clues as to what products are in the pipeline.
It’s pretty simple: Your regular guests are motivated to earn points for their purchases and to get transparent communication from you about what it takes to redeem those points. It’s a lesson many major brands have learned and are now adapting to accommodate. Skift Table reports that Starbucks, Chipotle, Pizza Hut and TGI Friday’s are just a few of the brands that have implemented new points-based loyalty programs in recent months, and to positive reviews. Some of the results have been dramatic. The report said that Punchh, a digital marketing company that helps a range of restaurants with loyalty program development, helped TGI Friday’s UK generate a 66 percent increase in revenue from loyalty program members and a 51 percent increase in new unique guest visits in the first four weeks of launching a new loyalty program in July. According to Mobile Marketing, the number of users referred by the app who made a verified visit to TGI Friday’s UK skyrocketed 300 percent in that same timeframe. The new loyalty program stands out not for its bells and whistles but for its transparency. While it started in 2015 (also with Punchh) as a “scratch, match and win” game designed to generate probability-based rewards, the new program has a spending-based system of points or “stripes” to help customers see the path they need to take to earn rewards.
The foodservice delivery industry seems to be evolving by the day. If you’re adapting your operation for more efficient delivery or thinking about offering it as a new option, take note of how third-party delivery companies are changing the market. Bloomberg reports that Uber has a pilot program underway in Paris that rents commercial kitchen space to restaurants selling food via the Uber Eats app. While the company has not commented publicly about this yet, it raises questions about how such developments could change the industry, perhaps controlling the choice consumers have when searching for a certain kind of restaurant, for example, or giving third-party providers a greater say in the branding of a restaurant business. Uber isn’t alone in this either: Grubhub, Door Dash and others have been investing in ghost kitchens in recent months. Postmates is adding yet another wrinkle to delivery by launching a new app, Postmates Party, to select cities that allows consumers to pool their orders and have them picked up and delivered (for free) by one courier.
At a time when Instagram is helping restaurant menu items go viral and having a well-curated social media presence is billed as a must for a growing business, it can be easy to overlook the power of email. But the numbers tell an important story: According to research from the Direct Marketing Association and Demand Metric, the return on investment for email marketing is 122 percent compared to just 28 percent for social media (other marketing channels rank similarly low). Email carries a number of benefits. When you pour your marketing dollars and ideas into your email list, you retain control of what happens next. You’re not at the mercy of changes to a social media network’s algorithm and you stand a better chance of reaching your most loyal guests directly. Your email subject line has the power to prompt the recipient’s action at the time you send it — you’re not competing with content on a person’s social media feed or having to wait until people visit their account. As The Rail suggests, you can use your data to deliver a more customized experience via email, sending messages when you know your list is most apt to open them and with a mix of images, video and text depending on what you’d like to promote. There are also ample email tools to target guests with not just birthday promotions but also deals that consider their personal preferences and ordering habits. OptinMonster suggests using your list for such tasks as nurturing your loyalty program and spelling out its benefits, winning back guests who haven’t visited in a while, or following up with people who made a Groupon deal or otherwise expressed interest in your restaurant but haven’t visited yet.
When food is prepared and waiting to be eaten by a hungry consumer, every minute can impact the quality of the meal. Now that so many operators are embracing consumer demand for delivery and are seeking to stand out in a growing crowd of off-premise dining options, the next push is to make that delivery as fast and seamless as possible. For a number of major brands, that means delivering in less than 30 minutes and striving to shave additional time off of that rate. In addition to restaurants adding pick-up shelves for delivery drivers collecting orders and opening delivery-only kitchens in locations with a critical mass of customers, Skift Table reports that some brands are introducing prepaid delivery for third-party couriers and retrofitting vehicles to become mobile kitchens that can cook a pizza on the go. (Pizza Hut, for one, is testing a robot-powered pizza kitchen that sits in the bed of a modified Toyota Tundra.) How can you shave minutes off of your delivery?
Are you among the many operators trying to figure out how to make delivery profitable? At a time when off-premise sales account for 38 percent of restaurant sales, according to Technomic, delivery has become a must for restaurants, even when the margins aren’t necessarily making the service profitable for those brands. Fortunately, new models are beginning to make the numbers work out. Recent Technomic forecasts have predicted that “subscription models that eliminate per-delivery fees in favor of a flat-rate subscription will emerge to present a clearer value proposition to customers.” The Spoon reports that a number of third-party delivery providers have come up with palatable offers for restaurants and consumers alike: DoorDash’s DashPass offers a monthly subscription of $9.99 for delivery of orders priced $15 or higher from a selection of restaurants, and Postmates has a similar offer. In the UK, Deliveroo is offering a £7.99 per month subscription for orders of any amount, and Uber Eats is reported to be testing a loyalty program that could eliminate delivery fees — if the experiment works there, it is likely to make its way across the pond eventually. Even operators who aren’t opting for subscription models are finding ways to make delivery profitable. In fact, delivery may be helping Chipotle make a comeback. Skift Table reports that delivery sales climbed 13 times in the fourth quarter of 2018 as compared to the same quarter of the previous year. Chipotle’s CFO credits a couple of factors for the success: the creation of a separate, digital food assembly line for off-premise orders, which enables the restaurant to process a greater number of orders, as well as a delivery-friendly menu (burritos and taco bowls are good travelers).
At a time when many operators are looking to scale down their restaurant footprints to accommodate service model changes and stay profitable, every square inch of food preparation space counts. At the recent NAFEM, the show hosted by the North American Association of Food Equipment Manufacturers of Chicago, the theme was about helping operators do more with less, using tools ranging from multifunctional prep stations on wheels to compact, high-efficiency ovens to electric bakers with interchangeable molds for accommodating a wide range of snack foods. Nation’s Restaurant News reports that a highlight of the show was a collaboration between the equipment company Vulcan and the quick-service seafood restaurant Captain D’s. The restaurant had challenged Vulcan to devise a more efficient fryer, and the result was a smaller fryer that can be mounted on a freezer base and allows a worker to complete a task while standing in place. In stores currently using the fryers, fry times decreased 30 percent and the stores saved $10,000 annually. Where is there an opportunity to increase the efficiency of your kitchen?
Do you have an eye on trying a new concept, expanding locations or adjusting your service model this year? While there is no shortage of challenges to launching a new foodservice business, one area where operators have a lot of support for tapping into new opportunities is in shared kitchens. These kitchens are becoming increasingly common in the industry, and because they minimize the overhead expenses of launching a business or making significant changes to an existing one, they are making it easier to test new ideas. A Medium report indicates that these shared kitchens, typically offered via a membership fee or charged by the hour, are taking a variety of forms. Delivery-only or ghost kitchens (Kitchen United is one example) can provide not only food preparation space but also business intelligence that operators can use to build a delivery program. Culinary flex spaces might better serve operators looking to test new food concepts or launch a new idea with help from the latest tools and equipment. Incubator kitchens (Kitchentown in San Mateo, Calif. is one example) are another form of shared kitchen space giving foodservice entrepreneurs a boost right now. They’re good places for entrepreneurs to build community and find resources to fuel the expansion of an idea: It’s possible to connect with food industry consultants, access technology and manufacturing space, and potentially tap sources of growth capital. At another incubator, the Hatchery in Chicago, entrepreneurs can access a talent pipeline and find new employees to help launch an idea. Finally, food truck commissaries (Kansas City’s Food Truck Central is one) are helping operators test out food truck concepts by providing power and water, along with waste disposal services.
How well does your restaurant accommodate delivery? Amid the rise in demand for delivered food, many operators are rethinking their restaurant layouts and footprints — but what if such major changes aren’t an option? As Panera, Chipotle and others are discovering, shelving is one small move that is making a big difference in delivery efficiency, enabling drivers to quickly grab prepared orders and go. Fast Company reports that Eatsa is taking this concept a step further with its Spotlight Pickup System. It’s a small, modular, digital shelf that can connect with third-party delivery providers like Uber Eats. When an order is complete, the shelf lights up with a customer’s name and can sense when food has been placed on it or removed. It will even alert a manager if food sits on the shelf for too long. The shelves could be ideal for small spaces, since each shelf is self-contained and can be assembled in different numbers and configurations.
Something is lurking in your trash. If you’re lucky, it’s money: Many foodservice operators who have changed their approach to trash disposal have minimized waste when it comes to both food and finances. (There’s a lot of waste to reduce: According to a 2014 study by the Food Waste Reduction Alliance, more than 84 percent of unused food in American restaurants is thrown away — and while those figures have likely improved in the past few years, there’s still plenty of room for improvement.) Restaurantowner.com suggests several tips to help operators take charge of their trash. First, remove trash bins from the kitchen — even as a temporary experiment — and give each employee a clear, labeled bin to be filled with food scraps or trimmings they want to discard during food prep. Following the shift, have a manager inspect the contents of each box for usable product. If any is found, the manager can provide on-the-spot training to that employee to make sure usable product isn’t wasted in the future. Inspecting bins in the dish room can be helpful too: Make sure china, silverware and other expensive tableware aren’t getting damaged or accidentally tossed out. Finally, monitor your dumpster, which can provide easy cover for a dishonest employee. It’s a common practice in the industry for someone looking to steal a case of wine to hide it in the dumpster only to retrieve it later. Having a manager approve who takes out the trash and when, or even monitor the dumpster via video, can help protect your business from those losses. (Want to talk trash? Contact Team Four about how your operation can save on trash disposal.)
The images of menu items you share online need to sing — or at least motivate people to pay you a visit. While it can help to have a professional photographer do it, a couple of pros recently shared some food styling tips with Edible Manhattan that are easy for amateur photographers to implement. When setting up a shoot, try having an ice bath on hand to keep vegetables and herb stems looking fresh. A brush of olive oil can help food glisten. Use natural light when available and, to minimize shadows, a piece of white cardboard, or even a white cutting board or plate can serve as a makeshift reflector. While the colors in your dish are a focal point, you can accent them with table linens or glassware in similar (or complementary) colors. If there is a memorable spice or other seasoning used in the dish, accentuate it by adding seeds, sprigs or other natural elements to your photo setup.
As technology infuses so many parts of the restaurant industry — and as restaurant brands expand to additional locations — operators may wonder if the connection to consumers suffers in the process, or if the brand could become watered down when consistency-driven processes take over. Sweetgreen is one example of a brand that has kept its guest connections strong through its adoption of technology and physical expansion. Nathaniel Ru, the brand’s cofounder and chief brand officer, calls it delivering “intimacy at scale.” It’s about delivering healthy, real food at scale without losing a local, personal touch. For Ru, that has meant thinking creatively about the supply chain at times. As First Round Review reports, when a winter storm wiped out the peach crop in New England a few years ago, Sweetgreen (in the midst of summer menu planning at the time) had to adjust. Its popular goat-cheese-and-peach bowl was no longer a viable option, so the dish was reinvented in a way that both accounted for supply chain challenges and bonded with consumers. Sweetgreen substituted locally grown strawberries and blueberries for the peaches, changed the name of the dish to the Patriot Bowl and sold it in the northeast, where it quickly became a guest favorite. Ru advises other operators looking to deliver intimacy at scale to keep things simple, from limiting the number of core values to numbers of locations. When you’re ready to expand to a new location, don’t use the same playbook — study the demographics, buying patterns, traffic patterns and basic vibe of each community first. Next, be modular — expect change and build any new locations to account for future adjustments to menus, décor, ambiance and other factors. Finally, collaborate with people and companies that feel like a natural fit — from chefs to musicians to farms — and can help you retain and reinforce the character of a store.
Tap your financial data
Prepare to be shocked: The restaurant industry is known for its unusually thin profit margins (Toast suggests they range from 0 to 15 percent, with most restaurants falling between 3 and 5 percent). Okay, that probably sounds pretty familiar, but as with most other areas of your operation, your data can help you uncover surprising areas of waste and make best use of the profits you do have by tracking your profit and loss, as well as your projected and actual cash flow and cost. FSR Magazine advises collecting information on such costs as your rent and utilities, wages, revenues within a set time period, cost of raw materials, number of items sold and the average cost per item, total food cost, cash flow projections and profit. Reports from your POS can provide the most detailed information here, but also look to your credit card processor to identify trends, as well as records from third-party delivery providers.
For the all-powerful millennial and Gen Z guest, it’s no longer enough for restaurants to offer a healthy menu and run an employee-friendly operation. These consumers also think about their impact on the environment and look to support businesses that try to minimize their carbon footprint. There is increasing power in using local, seasonal ingredients — as well as suppliers who share those values — and then promoting that to your guests. This goes not just for produce but for pantry staples as well, since the carbon footprint of these ingredients can be surprisingly significant. For a sense of how your menu ingredients stack up, check out the tool listed in this report from the BBC. It can help you analyze ingredients from apples to wine for their impact on the environment. For a deeper dive and a better sense of the normal environmental impact of other businesses in your industry, look to Blue Star Integrative Studio, a green business and building evaluation firm that Fast Company reports has developed its own method of tracking restaurant and supply chain emissions — then comparing the result to typical competitors in the industry. The Carbon Disclosure Project, which launched an initiative that Darden Restaurants joined, and the Climate Change Registry may offer you some helpful guidance too.
Interested in enhancing your menu with vegetables that have a long growing season, are sustainably raised without fertilizers or herbicides, offer appealing flavor and nutritional benefits, and are also on trend? Sea vegetables are rapidly rising in popularity. Nation’s Restaurant News reports that the consumption of seaweed is growing 7 percent each year in the U.S., according to James Griffin of Johnson & Wales University. Some of the world’s top restaurants have incorporated the sea vegetable, in both fresh and dried forms, into their menus in surprising ways: Consider the sea lettuce cookie amuse bouche at Chicago’s Smyth.
What’s your challenge? Whether you need help developing recipes and concepts, analyzing food costs, fine-tuning purchasing, planning a marketing campaign or managing another aspect of your business, we can provide guidance tailored to your needs. Contact Team Four at firstname.lastname@example.org or 888-891-3103 for more information.
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Food For Thought And Profit is brought to you by Team Four Foodservice/Value 4. We offer the latest foodservice trends, news, safety, and technological advances in the industry. We are an outsourced purchasing and logistics company that provides comprehensive supply chain solutions to our customers. Our executive team has many years of foodservice experience and we bring that experience to work for you. We have expertise in all areas of the foodservice sector.