MERRY CHRISTMAS – HAPPY HOLIDAYS
Foodservice Trend and Prediction Reports
For 2023. Alternative seafood, nuanced heat, and naturally occurring sweeteners are among next year’s specialty food trends, according to the Specialty Food Association’s Trendspotter Panel. “Specialty food consumers are looking to make their meal prep easy but exciting and that is driving many of this year’s trends regarding convenience, packaging improvements, and global flavors,” said Denise Purcell, SFA’s vice president, resource development. “At the same time, they continue to care about how their food is grown and the health benefits it offers, giving rise to evolving sustainability, plant-based, and better-for-you trends.” Professionals from diverse segments of the culinary world comprise the SFA’s Trendspotter Panel. They are Patsy Ramirez-Arroyo, food and sustainability consultant; Melanie Zanoza Bartelme, Mintel; Osei Blackett, Picky Eaters Restaurant, Ariapita and Chef Picky Events + Catering; Mikel Cirkus, Firmenich; Jenn de la Vega, Put A Egg On It; Jonathan Deutsch, Drexel University; Victoria Ho, SherpaCPG; Lindsay Leopold, food stylist; Stan Sagner, We Work for Food, LLC; Kantha Shelke, Corvus Blue LLC; V. Sheree Williams, The Global Food & Drink Initiative, Cuisine Noir. The trends include:
Restaurant Sales and Traffic Growth Soften Again in November
Likely signaling tougher times ahead. Inflation began its decline in late summer, the short-term increase in gas prices has since subsided, and the impact of those economic trends can be seen in consumer spending at restaurants. However, when looking more granularly at the data, same-store sales growth was -3.4% year-over-year in November. When comparing November against the growth rate reported for both September and October, sales took a 1.8 percentage point drop. This November’s sales growth is the lowest posted by the industry since July’s +0.3%. It was not only sales growth that eroded during the month. Traffic was down too, albeit dropping by a smaller margin. Same-store traffic growth was -4.3% in November, down by 1.1 percentage points relative to the previous month and the worst outcome for the industry since July. November seems to be a good preview of what trends could lie ahead, as traffic softens, bringing moderation in sales growth as a result. Once the very high menu price increases start abating, as is expected, it will be increasingly harder to post strong positive same-store sales growth as was the case for most of 2022.
The year that was for restaurants. The restaurant industry once again proved its resilience in 2022 as it dealt with ongoing obstacles like inflation, supply chain, labor shortages and more. Over the past year, brands modified expansion strategies, leaned into new technologies and chose to invest more into their employees to keep up with trends, improve operations, win over customers and embrace company culture. It was exciting to watch guests return to restaurants this year and even more exciting to see how restaurants have adjusted operations to adapt to this new normal. “Restaurant owners will end 2022 with a sigh of relief after another tough year. While sales have in many cases rebounded, operators faced ongoing struggles from inflationary pressure on food costs, hiring and retaining staff, along with supply chain issues and availability of key items. These elements were not offset by topline sales gains so many felt the pressure on the bottom line in actual earnings. On the other hand, operators have continued to embrace strategies to push back against the ongoing struggles and reposition themselves for success. They have added technology throughout the restaurant to offset labor hours. Operating hours often exclude the least profitable dayparts or days of the week, providing better balance for the restaurant lifestyle. Increasing menu pricing has helped to offset costs and so far, has continued to attract customers since grocery prices are outpacing the increases in restaurant tickets for dining out.”
2023 Industry Predictions Are (Unsurprisingly) Tech Heavy?
Technology will continue to have to both meet customer expectations and achieve efficiencies. A lot of crystal balls come out this time of year and they often display an intriguing forecast of what’s to come in the near term. For the restaurant industry, many of the recurring images appearing in those crystal balls have to do with technology. According to Datassential’s 2023 predictions, for example, artificial intelligence will have a “huge” impact on the industry, not just by helping to develop new items but also by easing the continuing labor shortage. Chef Tom Aviv is an example of the former, having recently debuted at a restaurant in Miami that uses DALL-E (AI) technology to help create the menu.). Several restaurant brands have adopted AI technology for tasks such as automating phone orders, receiving drive-thru orders or monitoring coffee systems. Kris McDonald, vice president of development at Checkers & Rally’s, recently said her company has had such success with the technology, she expects it to eventually roll out systemwide and evolve into further applications, like inventory analysis. AI-powered self-service technology is also a 2023 prediction from Oracle Food and Beverage. Chris Adams, VP of strategy, said, “Technology like AI-powered voice will optimize phone orders and the drive-thru experience, while self-service kiosks will help take pressure off staff and offer customers additional customization options and flexibility during the visual ordering experience.”
Some Supply Chain Relief
Expected in 2023. Inflation clouded everything this year, for consumers and operators alike. On the operator side, some commodity prices were at their highest levels in decades, forcing average menu price increases up by over 8% just to maintain margins. Commodities are always volatile, but this year was a vortex. “Inflation this year has been as steep as I’ve ever seen it in my career,” said David Maloni, principal at Datum FS. That career spans over 25 years in the foodservice supply chain space, including distribution sales and forecasting. About a year ago, Maloni bought a coffee and pastry concept in Sarasota, Florida, and became an operator as well. Coincidentally, coffee and eggs were two of the most expensive markets this year, and breakfast inflation overall has ticked up above 30%. In other words, he’s craving cost-of-goods relief just like everyone else. And for the most part, his forecasts look promising. Sort of. “Generally, we should see things like chicken, eggs and maybe dairy come down a bit. There will be opportunities for lower price levels throughout most of 2023 for many commodity-based products,” Maloni said. “The expectation is to see some softening for the industry.”
How Small Restaurants Have Adapted
To years of turmoil. The COVID-19 years have been tough, and continue to be tough, on the restaurant business: Lockdowns, labor shortages, inflation and now, increased cases of flu and COVID-19, have all contributed to the industry’s woes. Restaurants have been trying to adapt in a number of ways. How successful have they been? We took a look at two —The Pancake Pantry in Nashville and Englewood New Jersey’s TJ’s Southern Gourmet—to see how food service businesses, especially small operators, are coping with the hard times. The Pancake Pantry has been particularly successful, its owner explained, in adapting to the new world order of the restaurant industry. Online ordering and focusing on takeout—and initially partnering with the delivery service, DoorDash, (DASH)—has even helped expand its customer base. “One of the greatest parts of the pandemic is [that] it’s allowed a bigger reach for our guests that can’t come in,” managing partner Chip Bradley told Yahoo Finance Live during its Small Business Spotlight segment (See video above). “We’ve learned a lot about how restaurants have to adapt quickly. If you did not adapt quickly at the onset of the pandemic, then you were pretty much dead in the water, so we adapted quickly.”
Biden Grilled for Claiming Restaurants Kick People Out
For being gay. President Biden is being criticized by some on social media for seeming to suggest that gay Americans being expelled from restaurants is a widespread occurrence in 2022. During an event celebrating the passage of The Respect for Marriage Act on the South Lawn of the White House Tuesday, Biden remarked, “When a person can be married in the morning and thrown out of a restaurant for being gay in the afternoon, this is still wrong.” Biden’s comments were met with questions and criticism on Twitter. People in America aren’t getting thrown out of restaurants for being gay. But in just the last couple years, they HAVE been thrown out for being Christian. And they have been thrown out for being unvaccinated,” Jesse Kelly, a conservative commentator, tweeted. Matt Walsh also cast doubt on Biden’s argument. “This scenario has not happened anywhere in the country, is not happening, and never would happen. It is entirely a figment of the leftist imagination,” he wrote. People ‘have been thrown out for being Christian,’ one conservative commentator remarked on Twitter.
79% of Diners Expect Option to Use Technology
To order from casual restaurants. Seventy-nine percent of consumers expect to use technology to order at casual restaurants, according to a HungerRush survey of 1,000 U.S. consumers. HungerRush, a restaurant tech company, also found digital visibility is a significant factor in driving new customer visits, with 85% of consumers saying it’s important to them to find reviews and other information about restaurants online. Sixty-five percent of respondents under the age of 30 reported ordering online, 62% order by phone, 51% through a restaurant’s app, and 38% through third-party apps or at the restaurant counter, per the survey. Online ordering is the most frequently used ordering technology covered by the survey, especially among younger consumers. But younger consumers (18-29 years old) are actually less likely to use some tech-heavy ordering channels compared to customers aged 30-39. Only 8% of the younger consumer set said they would use text ordering, compared to about 18% of customers in their 30s, according to the survey.
Restaurants Reconsider Direct Delivery Orders
As third-party fees persist. As we move into chilly winter nights, restaurants may find that they are receiving more and more delivery orders, as people are reluctant to face the elements. Thankfully, gone are the days of being limited to the few takeout menus in your kitchen drawer. Delivery, once dominated by staples like pizza and Chinese food, has expanded to include anything and everything, from fast casual to fine dining, and from dim sum to pho to Korean BBQ, facilitated, in part, by third-party delivery apps such as Doordash, UberEats, Grubhub and Seamless. As these third-party delivery apps have increased in popularity, however, so has a new frustration by restaurants and customers alike: exorbitant fees. Anyone who has used a third-party delivery app is no stranger to these fees. In addition to tax, and optional gratuity, it’s not uncommon to see “delivery charges,” “service charges” and all manner of “administrative fees.” As this practice becomes more prevalent,1 public scrutiny and frustration by restaurants and consumers grows. A TikTok user recently went viral after sharing his order receipt for one milk tea, showing how an order for a single $6.50 item quickly became an order totaling $22.93, in large part because of such fees.
Did You Know?
The importance of customer data organization for restaurants. Customer data organization is a key component of customer service. It’s also a powerful marketing tool that can grow your business and attract your target audience. Between those two things, it shouldn’t come as a surprise that customer data organization is crucial for restaurant success, especially now that online cookie policies are changing. When you’re in the restaurant business, it can be hard to focus on things like data collection and target marketing. However, no matter how good your food is or how pleasant your environment is, you’re not going to get people in the door without the right marketing techniques and customer service skills. If you know it’s time to brush up on both, let’s dig a little deeper into the importance of customer data organization for your restaurant, and how you can collect and organize quality data for your business.
Restaurant training trends to watch in 2023. Federal data shows that the restaurant industry lost approximately 6 million jobs in spring 2020. Since then, restaurant operators have struggled to fully staff restaurants. However, recent jobs reports show that the restaurant industry is steadily regaining the employees it lost all at once in 2020. There’s an interesting layer to this: those taking jobs in the restaurant industry aren’t exactly the same ones who left. A recent New York Times’ story examined the trend of members of Gen Z taking the jobs once occupied by millennials and Gen Xers. Many of these Gen Zers have never held a job before, let alone one in the restaurant space. Their relative inexperience, in addition to their preferred modes of learning, means that different types of training may be required.