Industry News

SmartSummit: Foodservice industry experts on what it takes to succeed in these times

The pandemic has upended the foodservice industry, creating unforeseen challenges -- but also opportunities. Research from the National Restaurant Association estimates that as of last month, at least 100,000 restaurants have either closed permanently or for the long term, and that restaurants are on track to lose $240 billion this year. Now as dining rooms are beginning to reopen and restaurants have found new ways to operate, everyone is wondering now more than ever what lies ahead for foodservice.

Earlier this week, industry experts gathered at SmartBrief’s Food & Beverage SmartSummit, "Foodservice trends worth investing in: Innovations for today and tomorrow" -- sponsored by Altametrics, a Costa Mesa, Calif.-based solutions company that provides predictive back-office software for workforce management, inventory management, and reporting  to restaurants -- to discuss innovations that are here to stay. From increased drive-thrus and ghost kitchens to keeping an eye on new technologies and employee retention, the panel offered insights that centered on the need to be flexible in operations, and to meet not only consumers’ expectations, but also restaurant employees’ needs.

For both Frank Rodriguez, vice president of operations at Broomfield, Colo.-based Noodles & Company, and Joshua Phillips, general manager and partner of Washington, D.C.-based Espita Mezcaleria and Destination Unknown, Inc., the ability to be flexible and “pivot on a dime,” they both said, were key to staying afloat -- and thriving -- during these times.

“All of our success has been around pivoting and constantly looking at how to make the operations better for both the guests and ourselves,” Phillips said of all of the changes that were made at Espita, which included the opening of a ghost kitchen, Ghostburger. “It’s actually forced us to be much better managers.”

In addition to opening Ghostburger, which has been a “runway success,” bringing almost three times as much revenue as originally planned, Espita also implemented scannable QR code menus, which has not only helped diners feel safer dining in, it has allowed the restaurant to run on “significantly leaner” operations by cutting the number of staff needed by over half.

For Noodles & Company, while sales dropped dramatically at the beginning of the pandemic, the quickservice chain had already fortunately “spent a good part of the last couple of years working hard on our off-premises options for our guests,” Rodriguez said.

“We already had a strong off-premises program in place, so it was fairly seamless for us to be able to migrate into making that an even stronger option for our guests,” he said. 

Beyond increasing the number of third-party delivery companies it worked with, Noodles & Company also implemented curbside pickup. As a result, the chain saw a massive increase in digital sales, and while daypart sales decreased with people staying at and working from home, dinner orders increased and check sizes were larger since orders were for families rather than one or two office workers, Rodriguez said.

According to research from The NPD group, back in April, quickservice restaurant traffic was down 40% nationwide and full-service restaurant traffic was down by about 80%. 

“One of the reasons why QSR did so much better than FSR is that many of them were already equipped to handle off-premises dining, carryout, delivery -- it helped keep them going,” Darren Seifer, executive director, industry analyst of food consumption at The NPD Group said. “Much of their physical space was geared towards that type of traffic, but the physical experience that consumers are used to at restaurants, that’s definitely on hold for the time being.” 

In a poll taken during the event, 100% of respondents said their operation has made digital orders or management technology a bigger part of their business model amid the pandemic.

Digital traffic did in fact increase significantly, according to Seifer. In April-June of last year, digital traffic represented 6% of restaurant orders...“[f]lash to the same quarter this year and it was just under 20%,” Seifer said. “So we basically moved years’ worth of growth within just a few months.”

And looking at third-party “aggregators -- your Grubhubs, your Seamless, your Uber Eats -- they grew from about 3% of users using them to about 6%, so that basically doubled,” Seifer went on. “But the key thing about that, if you look at the prior six months before COVID-19, and the people who are now using apps, compared to that pre-period, half of them were not even using those apps.”

The case for digital is strong, and it doesn’t sound like it’s going anywhere. In fact, beyond digital ordering for off-premises dining, Phillips said he thinks operators should think about this time as an opportunity to “use technology to your advantage now to get to a point where it stays in the future.”

“Use this pandemic time as an opportunity to train your guests for what you want them to do after the pandemic,” he said. “So with the QR codes, it takes time to change their mindsets and what their expectations of service are. I don’t know how much longer we’ll be doing this for, but until this is all over, you’ve got this opportunity to train your guests. They come in and see it under these conditions and they’re way more accepting of it than they would be if I tried to do this two years ago.”

Other significant learnings and trends that will carry on into the future? 

Thinking about real estate differently, and putting a real emphasis on employee retention efforts, Rodriguez said.

Smaller spaces can now be on the radars of many restaurants, Rodriguez said. “Locations that have pickup windows, we see that as an opportunity for us.”

Rodriguez also reminded us that the pandemic is affecting everyone -- both guests and restaurants employees. Because of that, one thing that Noodles & Company has really focused on is being conscious of employees’ mindsets and mental health, trying to do as much as they can in terms of benefits, flexible scheduling and also just being patient and understanding.

“Everyone has been affected, so I think truly doing things that make you a difference in the life of someone that’s working for you, an employer of choice, is a practice that we have put a lot of emphasis into,” Rodriguez said. “We have a lot of history, a lot of tenure in a lot of our team members -- we need to be able to retain them in order to keep moving on a dime as the industry forces us to change.”

To watch the event in its entirety and hear more insights from these experts on foodservice innovations worth investing in, access the SmartSummit on demand.

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