New research from the National Restaurant Association found that delivery, drive-thru and takeout food are on track to comprise 63 percent of restaurant sales this year – and many industry insiders see off-premise sales as the industry’s key growth engine. Recent consumer data demonstrates the potential. For example, Foodable reports that more than 80 percent of consumers younger than 35 are using on-demand food ordering apps about twice a week, and Food On Demand reports that delivery sales are 75 percent higher than in-store sales. At the same time, a declining percentage of consumers want to talk to others when visiting a restaurant, according to a recent study from Harvard Business Review. Clearly consumers still crave a restaurant experience but the best way to engage those people may no longer be via an in-person conversation. Harnessing technology to drive off-premise sales is key to tapping into the off-premise opportunity. Do you have a technology blueprint for driving off-premises sales? As of this writing, we were a few weeks away from the 5th annual Takeout, Delivery & Catering Symposium, which will gather industry leaders to forecast what’s ahead for off-premise sales, as well as how operators can use customer analytics to drive sales and engagement, and how technology can make a restaurant operation more efficient. Stay tuned for details from the event in the coming weeks.
As Beyond Meat and the Impossible Burger compete for market share and fast-casual and quick-service brands scramble to bring meat substitutes to their menus, don’t forget some other plant-based meat alternatives that may suit your menu well. In a recent Upserve survey of 9,000 restaurant operators, jackfruit had climbed 52 percent on menus in the past year. Unripe jackfruit has a taste and texture that mimic meat and can work well as a pork or chicken substitute. It is also nutrient-rich, containing calcium, iron and potassium, and because it is a natural plant-based protein, it may appeal to guests looking to consume more whole foods.
The popular guidance on offering restaurant delivery can sound a bit counterintuitive: Find a way to make delivery work, despite the economic challenges it can create, or lose relevance with consumers. A new report in the Washington Post emphasized that point, indicating that the most recent industry earnings calls demonstrated the dramatic impact (positive and negative) of digital ordering and delivery on restaurants. Domino’s, for one, indicated that despite strong sales growth, it felt pressured by the “aggressive marketing of third-party aggregators.” Delivery is also having a big effect on Chipotle, which saw digital sales skyrocket more than 100 percent from the same period last year following a delivery promotion. The demand for digital ordering and delivery is clear. But as third-party delivery companies vie for business with enticing offers, how can you make delivery work for you financially? Consider raising your prices. If recent operator experiences are any indication, the extra cost won’t deter customers who value convenience. A report in Restaurant Business said when Habit Burger launched delivery last year, it increased the cost of delivery orders by 25 percent. Initially, third-party delivery companies were against this move, fearing pushback from consumers. But that has not occurred and delivery companies have softened to the idea. As you flex your business to accommodate more delivery orders, you may be surprised at consumer flexibility on price.
If you’re currently adjusting your approach to managing labor challenges, repetitive kitchen tasks or the overall experience you provide guests, a number of tech companies are working on solutions to help. At the recent food robotics summit ArticulATE, leaders of these companies sounded off on what’s in the pipeline, and as SmartBrief reports, a key theme of discussion was finding ways for technology to blend seamlessly with human employees and guests, while freeing up employees for more creative tasks. The formula isn’t the same for every restaurant. While there is technology available that can automate burger flipping and fryer operation (Miso Robotics), baking bread (Wilkinson Baking Company, among others), serving guests (Bear Robotics) and delivering food, finding the right kind of automation for your business is about understanding what is best for developing your employees and serving guests. As the CEO of Creator, the restaurant in San Francisco that uses robots to make the perfect burger but has not automated the taking of orders, said: “Our goal is not to be the world’s most automated restaurant, our goal is not to have as few people as possible -- the goal is to have the best experience possible.”
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.)
Americans currently eat half of their weekly meals on the go, according to Statista research. If you haven’t yet taken steps to accommodate the convenience-driven consumer looking to satisfy a craving, you stand to lose market share to not only restaurant competitors but also to grocery and convenience stores offering prepared food. A QSR Magazine report suggests operators looking for a greater share of grab-and-go business ensure their menu effectively promotes the brand. While grab-and-go food is becoming ubiquitous, it can fall short when it’s too generic, with the expected mix of yogurt parfaits, fruit cups and pre-packaged sandwiches. If you have a dish or even a condiment that is a signature item, find a way to translate it to your grab-and-go menu. The report also advises operators tap into the millennial mindset when selecting and packaging grab-and go menu items. Think locally sourced, plant-based foods and “ugly” produce, along with environmentally friendly packaging that demonstrates your commitment to cutting back on waste. Consider using packaging that not only showcases your food effectively but can be returned and reused (in exchange for a discount on a future order, perhaps). Layered salads or smoothies served up in glass mason jars are just two examples. Finally, don’t forget to weave in on-trend flavors. A report from The Caterer suggests Japanese-inspired dishes like gyoza dumplings or yakisoba noodles can add interest and health to a grab-and-go menu, along with fruit-and-herb infused beverages.
While third-party delivery gets a lot of press lately, 78 percent of all delivery orders are currently placed directly from restaurants — not from third-party delivery providers, according to the 2018 Takeout & Off-Premise Consumer Trend Report. That could continue as savvy consumers lean toward ordering direct in order to check on potential deals and avoid excessive delivery fees. Cake advises operators to make that process as streamlined as possible by placing an “order now” button and phone number in plain view on their websites. These web visitors are also prime candidates for your loyalty program, so make sure your invitation to join appears front and center on your site.
The multiple benefits of grab and go
Consumers want their grab-and-go foods — 80 percent of consumers say they snack at least once a day, according to Technomic’s 2018 Snacking report, up from 76 percent in 2014. What’s more, consumers continue to crave not just sweet or salty snacks but high-quality options that are healthy and fresh. This trend is on display everywhere from hotel lobbies — many of which have been transformed in recent years into mini convenience stores — to hospitals to restaurants. (In fact, in 2016 Team Four launched a program called Charging Station to provide grab-and-go concepts for college athletic programs looking to provide an expanded variety of nutritious meal and snack options to athletes. Soon after, hotels and military organizations got involved too.) The good news for restaurant operators is that the grab-and-go trend is not only good for the all-powerful millennial consumer, but it is also beneficial to the operator trying to carve out a budget for labor at a time when certain states have mandated a $15 hourly wage. Restaurants that provide quality grab-and-go options can often cut back on labor expenditures, particularly on the front end. But even on the back end, grab-and-go options can help operators make use of ingredients that are pre-sliced and pre-cubed, which can shorten preparation processes and don’t require as much highly skilled labor to prepare. If you offer grab-and-go items, offer quality ingredients such as nuts, seeds, produce and lean meats, and make sure these items are packaged well, labeled clearly and require little preparation and cleanup. And just as you would do with your restaurant menu, consider incorporating local items and ethnic ingredients. For more information about how Team Four can help you develop a grab-and-go concept, contact us at firstname.lastname@example.org.
Make it a safe Thanksgiving
If you’re serving up turkey dinners this Thanksgiving (or preparing them for take-out), remember some safety tips to prevent food handling problems or inadequate cooking, which often lead to poultry-related foodborne illness. The Centers for Disease Control and Prevention advise that you thaw your turkey in a refrigerator, in a sink of cold water changed every half hour, or in the microwave — and don’t leave it out at room temperature for more than two hours. If you stuff your turkey, add the stuffing just prior to cooking and make sure the center of the stuffing reaches 165˚F. Your turkey must also reach an internal temperature of 165˚F, so insert a food thermometer into the thickest parts of the breast, thigh and wing to make sure they have reached that threshold.
Build a loyal following
Are you putting your loyalty program to work? Research from Accenture found that 66 percent of consumers in the United States spend more money on brands to which they are loyal. Offering the right mix of benefits can generate a significant boost to sales — one extreme example is Starbucks, which has 11 million members and, as of early 2016, $1.2 billion in customer funds loaded onto its plastic and mobile Starbucks cards, Upserve reports. The brands reaping the biggest benefits from their loyalty programs are using a combination of discounts, targeted marketing and experiential rewards to motivate their guests. Upserve recently assessed some of the most forward-thinking brands in this area. The Palm’s rewards program, for example, carries a $25 fee but that is returned to guests in the form of a $25 gift card after sign-up. Members get changing rewards each month, including exclusive wines and cocktails, as well as substantial discounts on wine. Panera, a longtime innovator in this space, is another to watch, with 28 million members who can easily reorder favorite purchases via the program, receive personalized offers based on those orders, and get recipes and cooking suggestions from the brand. Panera also makes the experience of collecting food more convenient for its members — they can order online, then visit a store and pick up their food from a designated Rapid Pick-Up shelf in the store, avoiding a long wait in line. To maximize your program’s power, Accenture advises you regularly identify and eliminate aspects of it that aren’t working, encourage your members to be your advocates and try to attract new customers through existing ones. Also note that millennials can be tough to attract to these programs — mine your data to understand what range of offerings brings them back.
Prepare for the packaging revolution
The year 1894 brought the “paper pail” now ubiquitous in Chinese food takeout. The early 1960s brought us the cardboard pizza box. Now, in the face of consumer demand for eco-friendly packaging and growing demand for off-premise dining in general, we could be on the cusp of another big change in takeout food packaging. Technomic reports that in 2016, 60 percent of consumers said they would pay more for takeout meals if they were packaged in an environmentally friendly way. That number decreased to 52 percent in 2017, not because the demand for such packaging had fallen but because consumers now expect restaurants to offer it. If you currently provide single-use plastic for your takeout business, it’s time to offer alternatives and work with partners who support them — some third-party delivery partners now notify customers that they will not receive non-recyclable items like straws or packets of ketchup unless they request them. Shake Shack, for one, is now looking to bypass materials that are simply recyclable in favor of options that are biodegradable on their own.
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 email@example.com or 888-891-3103 for more information.
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